Q&A: Dave Burnton – “It's not as though you can build a tech platform and then just let it run … There are constant changes, constant updates, and constant user feedback.”

This article is an edited version of a podcast. Listen to the full interview via this link.

In short:

• Lawlux is a Melbourne firm that uses AI and large language models to provide legal information, speed up the onboarding of clients and make legal practice more efficient.
• The firm benefits from having a technology and AI specialist, Andrew Yu, as a co-founder.
• Now an employment law specialist, Lawlux is seeking to become a full-service firm in the next few years.

You believe that legal practice models must change. Why is that so important?

Law firms don’t have a right to their future – they have a duty to act in their clients’ best interests. You've got to provide competent advice, but when you talk about acting in your clients’ best interests, that extends to delivering services as efficiently and as cost-effectively as you can. I’m an employment IR lawyer. In Australia, you’ve got 2.5 million SMEs that employ 8 million Australians, with 40% of them saying their legal fees are too high. That’s just not cutting it. When we’ve got technology that allows us to provide work more efficiently and more cost-effectively, I think it's incumbent on lawyers and law firms to avail themselves of that technology. Legal practice does have to change. We've got the capacity to do it – it’s now time to step up and do a better job for Australian companies.

What can Lawlux do to make legal services pricing more affordable, and what role can Lixo Alpha – your AI paralegal – play?

We’re doing a lot in the technology space, and a lot of that doesn't involve AI. AI is the latest thing, it’s incredible and it's just going to get more powerful. But there’s a lot of technology that can help with that access to information, access to justice question that doesn't involve AI. At Lawlux, there’s two aspects to what we're doing. One is the law firm. We're just doing employment law now, but we're recruiting and we want to go full service and be national soon. Then we've got Lixo Alpha, which is run by my co-founder, Andrew Yu. He's a tech wizard. He's built all the technology. We’ve really tried internally to see Lawlux as the testing ground to find client problems, law firm problems, and then try to relieve those problems through our technology. Lixo Alpha sells its software, consults to other law firms and companies and does tech implementation. Lawlux is the law firm.

How do you make your firm more efficient using technology?

We’re not really focused on making the internals of the law firm more efficient. For that, you're probably best to look at platforms like CoCounsel or Harvey. Through Lixo Alpha, we’re trying to focus on onboarding and client engagement and really decouple that from the time that lawyers spend doing that. What that looks like from an AI perspective is that we've got our own large language model, it’s available 24/7, it’s completely free and it’s not behind a paywall or a membership wall, which from what we can see is a global first. Lixo Alpha answers legal questions. At the moment it’s narrow, covering the National Employment Standards, but it’s growing. We’re developing that content all the time and we’re really proud of it because it’s demonstrating the reasoning of a junior lawyer. It also provides case references and legislation references, which gives our target market, which is HR managers of large organisations or business owners of SMEs, the ability to have a human in the loop and verify information.

For other firms listening to your story and wondering how they can engage in AI, it sounds like having an internal tech whiz and recruiting tech-savvy talent will be the key.

Absolutely. I got some really good advice early on – and that is if you’re building something like Lawlux, you need to have a co-founder who has technical expertise. It's not as though you can build a tech platform and then just let it run. No software works like that – there are constant changes, constant updates, and constant user feedback. That’s a decision we made early on, seven years ago, and we think it's been the right decision. When you look at the complexity of the tech stack we’ve got, I couldn’t be prouder to be working with Andrew to do that. Lixo Alpha was born out of us receiving enquiries from other law firms and accounting firms; white-labelling it from us is more efficient and cost-effective than going through the process of building it yourself. There are other platforms out there, but none that incorporate the entire client journey from trying to get leads with the Q&A through to the onboarding as a client. That onboarding includes engagement agreement signing, which is automated; appointment bookings into our calendar; credit card prepayment; a conflict check. No one else integrates that entire workflow. So, yes, it's a huge amount of effort, but we think we've got a beautiful product and a product that's really going to help law firms globally.

As law firms seek productivity gains and smarter pricing models, your tech must make a difference.

Yes, there are huge productivity gains. Using our platform, we can automate an employment contract, or write the disconnect policy instantly. And it's not just the policy – it's the cover email; it’s the file note for the initial meeting; it’s an automated conflict report; it’s automating the data entry into the practice management system. We use Clio and it’s been incredibly efficient from that perspective. So the first time the lawyer touches the matter is when they receive a potential new client with all draft legal work in their inbox and a pending client in the practice management software. The efficiency gains are incredible. We then flip the script. In our research, we find that especially in the target market we're going after – which is medium-sized enterprises and up, and ideally who have used law firms before – they really value time with the lawyer. But contrary to how most law firms run their processes, it's not at the start of the process. They don't really value the time when they're giving information for the law firm to develop the legal work. They value the time at the end, once they've actually seen the draft work. Then they have questions on, well, ‘How do I actually implement this?’ Or ‘How do I give this to the employee?’ Or ‘This clause doesn't make sense to me, can we work through that?’ Quite often they traditionally don't reach out because they're worried about incurring further costs. So, we send out the draft legal work that has a human lawyer reviewing it, but they can spend 15 minutes doing that instead of a day or two. We then invest in the client meeting to discuss the legal work. There is still legal time, but we think that is a process that perfectly positions us for an AI world because as AI increases – and we're not thinking about ChatGPT 3.5 or 4.0, we're thinking about ChatGPT in the next five years – you need to be ready for that world and this approach allows us to move up the productivity ladder.

What about security around data and technology?

Date security and trust is critical. From day one, we’ve built this with encryption and firewalls. We made the decision early on to use servers based in Australia. We made the decision early on to use models on our own servers. Data does not leave Lawlux or our servers in Sydney. So far, we've had no challenges or glitches, but I think every company has to keep data security front and centre.

How did you get involved in the law and how did you end up running Lawlux?

I don’t have a good answer for why I wanted to do law. I just did. I remembered saying very confidently in Year 8 that that’s what I wanted to do. I did a Bachelor of Laws and Arts at Monash University, and I was lucky enough to secure a grad job at Mills Oakley in Melbourne. From there I moved over to Hall & Wilcox – they’ve got an exceptionally strong IR employment team and I was lucky enough to work across Melbourne, Sydney and Brisbane on some really interesting matters for some great clients. It's hard working in big law firms, but I think if you can run the course it is an environment where you learn an incredible amount. You work with awesome people, and it's only since leaving Hall & Wilcox that I realise how efficiently and incredibly well run those organisations are to allow lawyers to really focus on legal work, deliver it and continually improve their knowledge and skills.

What made you go it alone?

I had a nagging sense that the legal profession would be disrupted. It was around 2017 and chatbots were becoming a big thing. Now everyone has them on their websites, but they were the new technology back then. I did a course on how to program IBM Watson and how to build chatbots. I also did a Python coding course. I was terrible at both. I'm a lawyer, not a developer. I could see how incredibly powerful they were, but I knew I wasn’t the guy to do it. At the time I was working long hours at Hall & Wilcox and it really became around, well, ‘How do I find someone to help me on this journey?’ In 2019, I went to Hall & Wilcox and said, ‘Look, this is something that I'm interested in. Are you comfortable if I explore it on the side?’ And this is one of the reasons why I've got such fond memories of Hall & Wilcox. They said, ‘Absolutely. This is exactly what we want to encourage our lawyers to do.’ So, they gave me their blessing and I went out and worked with Symplicit, a design agency, and with them we went about trying to find a target market and product market fit. So, that's how the design of Lawlux came to be and I’m so glad I did that.

On other matters, you’ve worked with large firms, and we are keen to understand the leadership traits that you think are going to be crucial for law firms, large and small, as the profession evolves.

I'll preface this by saying that I don't know if I'm the authority on leadership, but I do have a lot of experience in big law firms. There are a few things that I'm really big on at Lawlux now, and this was big in us setting our goals, setting our values, and choosing who we work and partner with. So it's crucial to have values that reflect how you already act. There's no benefit in just imposing values on an organisation that are inconsistent. There's no quicker way to destroy morale. It’s important to lead by example in a way that reflects your values as well. In terms of work, you've got to understand the perspective of others to get the best out of your work and the best out of others. So, whether that's working with clients and understanding where they're coming from and framing the legal advice or developing your strategy, or if it's understanding the perspectives of my co-founder, Andrew, our investors and our advisory board. Overlaying all of that is understanding your ‘why’. It’s important to understand why you're doing something, what gets you excited, what gets you up in the morning, but then also understand what destroys your motivation, too.

What sort of culture are you trying to create in your firm?

The way I see culture is just how people act. It's how they act consistently. If people act in a consistently Machiavellian manner, you've got yourself a bad culture. If they act in a manner that is empathetic, that retains high standards, that’s focused on replacing yourself, that's focused on trust and honesty, then you've got yourself a good culture. The way you can assess culture is really to talk about what the employees say about the environment when management isn’t there. I've seen poor cultures in clients. I've also seen weak cultures where individuals aren't held accountable to upholding values. Again, nothing destroys morale quicker than having a bad or weak culture. So, one of my favourite things with building Lawlux is thinking with Andrew and our investors around what type of culture we want, what our approach to funding will be, whether we are going to be bootstrapped, which means growing more slowly, but out of our profits, or whether we try to attract VC funding, for example. And it’s all derived from how we already treat each other. Where we landed is that we want to be a premium law firm. We've got to deliver work and technology that is reliable, fit for purpose, accurate, but also in an environment that is more empathetic. Ideally, it’s an environment that when clients work with us and when people join us, it feels different.

Where do you want to be in five years?

We want to be a full-service, premium law firm. We're not chasing the bottom of the market. We want to recruit individuals from large law firms who have got incredible experience and skills. We want to be known as a terrific place to work, and we really want to transform how Australia's legal profession operates with benchmark technology – technology that we can build ourselves, we can share with other law firms, and which allows lawyers to do what they do best, which is interpret, advise, build relationships, exercise their judgment and develop strategy.

Is there anything else we need to know about you or Lawlux?

One thing I'd leave you with is that it's unlikely that lawyers will be replaced by AI, but I think it's almost certain that they'll be replaced by lawyers who know how to use AI or legal technology. There’s going to be an inflection point. The legal profession has held out for an incredibly long period of time, but I suspect over the next two to five years there's going to be a sudden, permanent moment where the traditional way of practising law will just comprehensively change. When we’ve seen new clients use our system, it's kind of them saying, ‘Why hasn’t it always been like this?’ As a law firm leader, you need to be ready for that change, and you owe it to your employees as well and your partners to be ready. So we’re excited for a world in which AI changes everything. I hope other law firms can adopt that kind of growth mindset and get themselves ready to improve access to justice, reduce the information asymmetry between law firms and clients, and do a better job for Australian companies.

www.lawlux.com.au