Pandemic has sped up digitisation of legal sector: Dinesh Sharma

Digitisation of legal and compliance functions, contends Dinesh Sharma, has historically been the last thing on the minds of companies. Having worked with corporates such Deutsche Bank, Crisil, Fidelity Information Systems, and Ingenico for over two decades, Sharma knew the pain points of legal and compliance departments.

Sharma turned first-generation entrepreneur in May 2015 when he set up the legal tech startup Volody. Back then, his top challenges included the lack of awareness about the need to digitise and acceptance about moving to the cloud. The traditional mindset of legal professionals was also a constraint. Singular focus on doing work manually, budget constraints and lack of interest in digitising processes hindered widespread adoption of technology. Covid-19, he underlines, has turned out to be an inflection point for businesses. “The pandemic has made everyone realise that one can’t run legal segment of business without technology,” he says in an interview with Forbes India. Excerpts:

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Q. The legal sector was ripe for disruption in terms of digitisation…
No one really thought that legal agreements are the core for every business and that delayed digitisation of the legal contract management can disturb the whole process. Though senior management across organisations were increasingly focussing on governance, risk and compliance (GRC), without technology there is no way you can have assurance that GRC are of the highest standard in the legal segment. Just imagine, you have thousands of legal contracts signed and no idea of the content, pricing, obligations, liability and jurisdiction you have signed for. The problem was huge.

Q. What were the initial challenges faced by Volody?
The biggest challenge was to have a product with a right market fit. I come from a corporate background of over 20 years. So I had good idea about the pain points and the gaps. Having a non-tech background and starting a tech venture was also quite challenging. It took me a bit of time to conceptualise products, hire technology teams and put the infrastructure together. We built our first product in eight months, and then went ahead with customer meetings for product demo. It took us almost 75 customer meetings to figure out that our product didn’t have a perfect fit and required changes.

Another big challenge was reluctance of the companies to accept cloud hosting. Legal and compliance functions are very important to every organisation as it holds the key information in terms of their businesses, costs and compliance standards. So SaaS on cloud was a big no. But we didn’t give up. For the first three years, our revenue hovered below Rs 1 crore every year. Last year, business picked up and we posted Rs 1.7 crore, and for March ended fiscal 2019-20, we have almost doubled to Rs 3.2 crore.

Q. And how has been the uptick post lockdown?
Interestingly, it has done extremely well. Digitisation of legal and compliance function has the become top agenda for CFOs and CIOs in a bid to stay ahead of the curve and ensure smooth running of the business. Companies have started thinking about digital solutions for contract management, compliance management and conducting board meeting. It’s a welcome change.

Q. A full transition to remote work is another important change. Can Software-as-a-service (Saas) companies make most of the tailwind?
SaaS companies have to really remain innovative to ensure that they respond to every situation. While the buzz around work from home has become loud now, hot desking was there for almost a decade. Now with social distancing becoming an essential part of life for safety reasons, it became quite imperative that all businesses look for technology solutions to remain on top and ensure business continuity. As we enable work from home, businesses definitely need digital solutions for managing legal contract management, conducting business meetings, and managing compliances. The key here is that every SaaS solution should be able to talk to other SaaS or any other technology product within the organisation and ensure there is no missing link. I can confidently say that next year will belong to SaaS companies.