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War of words erupts between Aussie legal tech providers
The chief executives of InfoTrack and GlobalX have traded blows following the acquisition of the latter by a Canadian-based entity.
Jerome Doraisamy
On Friday of last week, GlobalX entered into a definitive agreement to be acquired by Canadian cloud-based software and technology solutions provider Dye & Durham for approximately $166 million. The transaction will likely close in the fourth quarter of the current fiscal year, subject to regulatory approval.
Reflecting on the two acquisitions, InfoTrack CEO John Ahern released a “critical” statement, questioning the state of the nation’s legal tech industry and noting that, “time and time again, we see Australian technology companies for sale”.
“Australian technology companies prefer to ‘sell-out’ rather than export. This ‘sell-out’ is a fundamental problem for our country as it erodes our long-term export potential and as the intellectual property ownership moves offshore, it stifles future local innovation opportunities,” he posited.
“If we want the Australian economy to thrive, we need to stop the ‘sell-outs’ and start looking to build strong, Australian technology companies that compete in this evolving market and then export rather than sell off, the resulting great innovative products and services to the rest of the world.”
Exporting, Mr Ahern submitted, will grow Australia’s economy, as well as protect the nation’s data and nurture future innovation.
Australia has great technology in abundance, InfoTrack noted in its statement, insisting that the hard-working technology work ethic, rapid digital evolution of legal tech, together with an agile economy, “has yielded the technological equivalent to an Australian gold mine”.
Mr Ahern expressed concern that a “substantial amount” of Australian legal sectors will find their data under the control of North American-based companies.
“The problem with selling out is that law firms and banks suddenly find their service and more importantly their data is now owned and operated by an offshore foreign entity,” he argued, saying that the legal profession should be “buying local”.
“It’s not uncommon for law firms to actively search for tech that keeps their data Australian-based for privacy, security and regulatory reasons. When a firm suddenly finds [that] foreign entities own their Australian tech vendor mid-contract, this is a big problem for them,” Mr Ahern concluded.
Responding to the comments, GlobalX CEO Peter Maloney told Lawyers Weekly that he takes a “different view”.
“I believe we should be listening to and celebrating the success of Australian LegalTech stories, their ability to export their technology into new markets and attract global players to Australia’s shores,” he proclaimed.
“We certainly do not want to send a message to a start-up document automation business or flourishing LegalTech pioneers or capital needy proptech businesses that, if you stick your head out of the parapet, you will get shot down by the big boys who appear to be threatened.”
Everyone needs to be careful, Mr Maloney advised, with language use, stressing the need to avoid sending a signal to the legal tech industry “that the ‘tall poppy’ syndrome is well and truly alive in Australia, whereby the industry heavy weights think they have created fear through their voice. Fortunately, the legal industry is smarter than that; and to be frank I think they would be surprised by these views”, he said.
“It sets a pretty low tone of voice when the big end of town thinks that they can use fear in their language in an effort to exert further control over the market and ultimately squash innovation. We should celebrate the culture and success of Australian LegalTech business,” he said.
Moreover, Mr Maloney continued, we must remain mindful that many Australian lawyers use internationally owned software platforms every day: “We have highly respected great global market participants in Australia like LexisNexis, Thomson Reuters, iManage and Aderant. I certainly would not want to be seen to be running those global firms into the ground, particularly when they are our integration partners.”
Ultimately, he called for the profession to “pause and reflect” moving forward.
“My firm view has always been that economies flourish when education is at the core of its existence. High participation in education leads to a high degree of new ideas and from there inventions are born and a culture of innovation thrives,” Mr Maloney surmised.
“Let’s not play ‘whack-a-mole’, but let’s celebrate the highly successful LegalTech industry we have in Australia; let us as Australians invest more; and let’s attract more overseas investment so that we can continue to build best in class, world class legal technology.”
Jerome Doraisamy
Jerome Doraisamy is the editor of Lawyers Weekly. A former lawyer, he has worked at Momentum Media as a journalist on Lawyers Weekly since February 2018, and has served as editor since March 2022. He is also the host of all five shows under The Lawyers Weekly Podcast Network, and has overseen the brand's audio medium growth from 4,000 downloads per month to over 60,000 downloads per month, making The Lawyers Weekly Show the most popular industry-specific podcast in Australia. Jerome is also the author of The Wellness Doctrines book series, an admitted solicitor in NSW, and a board director of Minds Count.
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