Mobility Drives Legal Tech, with Ray Zwiefelhofer, President at World Software Corporation

Bill talks with long-time friend and colleague Ray Zwiefelhofer about what’s next for document management for legal tech and how mobility and the cloud are driving technology development. According to Ray, this is simply the next evolution for DMS, which has seen the advent of scan, email, and now: hybrid operations.

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Bill Bice

CEO | nQ Zebraworks
Recognized as a legal tech industry visionary, receiving Thomson’s innovator of the year award. Founder of ProLaw Software (acquired by Thomson Reuters), West km (used by 70% of the top 1000 law firms worldwide) and Exemplify (acquired by Bloomberg Law).
Ray Zwiefelhofer

Ray Zwiefelhofer

President at World Software Corporation
Ray is a legal tech innovator and currently serves as the President of World Software Corporation, a document management software firm that has set the standard in the evolving field of document management since 1988.

Transcript

Bill Bice: Hi, this is Bill Bice. I’m here with a great friend, Ray Zwiefelhofer. Hi Ray. 

Ray: Hi Bill. How are you doing this morning? 

Bill Bice: I am great. We’re going to have so much fun talking about this because you have a, you have a long and storied history in legal tech. And, and I love talking about the future of legal tech with you. So let, let’s start with the history, you’ve done some amazing things in this market, so how, how did you get involved? What pulled you into legal? 

Ray: Wow. I won’t belabor the point here. I tend to go on and on, so feel free to, bud in here, Bill. Folks know me fairly well about that. But so yeah, in the mid-late eighties, I got recruited in and finished school and I got recruited into a tech job at Equitrac. You know, at the time a leading cost recovery vendor. That was a really hot thing in the eighties and nineties of, you know, recouping cost, you know, a dollar or fax page or $2 a fax page, you know, and so on and so forth. Right. We know the cost back then. I spent about six years there. They were just in a huge growing mode and from a tech out of the Phoenix and covering San Diego also, you know, and moving into national project management for them. Handling their large rollouts, Gibson Dunn & Crutcher, and some others where, you know, when we were barely around and we would have to translate and send client matter numbers, you know, with the access database over. 

Ray: So those were the fun days, you know, more, more simple days. I quit to start a company called Imagineer out of Phoenix, which was an outsourcing company, copy, fax, mail services. Pitney Bowes merged at the time with Ameriscribe. And some of the management left just because of the dual positions. I ran that for a few years. We closed down Wilmer, the largest firm in the Southwest at the time. And then after three years, February of 97, Bowne bought the financial printing company, bought an engineer to create Bowne Business Solutions, which was an outsourcing division. And we proceeded to buy a Desi division RR Donley and build that to about 250 million. I had the CTO role of that division at the time, a lot of fun. I mean, it was a big step up for me, you know, from a little startup company to all of a sudden, you know, a ton of people managing large, you know, kind of rollouts and different things.  

Bill Bice: That was one of the first big legal rollouts. So you were, you were there, on the front end. 

Ray: Yeah, it really the first employees as we grew the company and a lot of the work, we did a lot of investment banks too. I managed their workflow and pitch decks and stuff. So Morgan Stanley, Goldman Sachs, BWAY securities. I lived a lot actually on Wall Street in a motel walking through. It was a lot of fun, a lot of fun too, but designing workflow systems for these banks to properly, you know, take the pitch book all the way through and, you know, Bowne, you know, they would bring the stuff in and for their filings and stuff and translate them to different languages and such. So learned a lot in that process. And let’s see was there for a while. And then 2003 ish, they got consolidation of their positions and my job was going to be moved to New York. I took a package and I was in Chicago at the time and I didn’t want to move my family further east. And, you know, I either had to get a job or, you know, maybe start a company. 

Bill Bice: You had a pretty good idea at the time, right? 

Ray: Yeah. We worked with Rico at Bowne. You know, we put their copiers into law firms that we managed, you know, so copier vendors loved us and always were telling us what’s new and what’s coming and stuff. And, and, you know, the copiers were starting to get a computer inside of them. And actually, you know, instead of just making a copy, they were doing more things, early days of faxing just buried around and scanning. And then the screens were getting bigger too. They’re starting to be touch screens. So yeah, the idea was, wow, you know, Equitrac was still and Copy track, both were still big players in the market. Like, wow, what if, what if we could take and these terminals and have no terminals and, you know, put that inside the copier. The first ALA we did actually, we had nothing, but we had a sign, you know, and a little slideshow that says, get rid of your terminals. 

Ray: And we were even so bold as to get a trash can in the corner of the booth, a big middle one, you know, and have an arrow and say, put your terminals here. That’s maybe a little bit bold, but, you know, we’re trying to get the point across and I don’t think we got any leads from that show, but it was good to get out. And, and, you know, you know, the history from there, it’s a lot of work, took him some money and then sold to Ricoh sometime later. And… 

Bill Bice: This needs to be clear, we’re talking about the birth of nQ here, this… 

Ray: Birth of nQ yes. 

Bill Bice: This was the core idea of embedded technology and moving, moving from terminals to software running in the devices, which was… 

Ray: Yes. And, you know, the funny part is maybe not so funny for the first year or so. We had the idea of the software down, but we couldn’t get the meek development kit at the time from Cannon. They weren’t quite ready yet. eCopy had it, eCopy was a very big player and scanning was, you know, coming around pretty important then. So we had to kind of wait for them and act like, you know, we had a million clients that were waiting for, for, for this. And we had a great relationship with Ricoh. So we were in there, but we had to wait about a year before we actually Ricohs was done the development package from them. We sourced a tablet out of Asia, a little flat screen touchscreen tablet, so that we could put our software on. 

Ray: It was software, a play, and it was some, some good days back then, you know, didn’t realize tablets heated up and they slid off of the Velcro mounted at the law firm. Got a call one day and all five other tablets, small firm, was on the floor. So we had some fun back then learning, you know, little things counting. You know, I have also a design chip background. So designing the counting to flashes off the copiers, the different milliseconds between the flashes. So Equitrac was all proprietary and in copy track. So couldn’t just make software. We, you know, kind of quickly discovered and thought, well, we also have to do, have a hardware device to track that. Phone calls and other things was quite the challenge, but, but it was a lot of fun. It was, you know, so challenging. And I guess I don’t really think back of all the work and stress I had, I think back and say what a fun time. 

Ray: And, and now, you know, everything’s embedded. And I can’t mention the exact licenses of the patents. I don’t think about the detail, but, you know, currently in nuanced copy track, Equitrac a lot of the larger companies that is public, licenses our patents, the four patents that we secured. So, you know, every can have a patent, but then actually licensing it and have people use it. That’s kind of a, the next step of that. So it’s kind of rewarding and a lot of fun. And, and after the sale, I decided take a little time off, you know that Bill with, with Pro Law right. You kind of sell you stick around a while and kind move on to something else. And then the owners of World Software here, where I’m at now, the makers of Worldox looking at retiring, and they did not want to sell. They wanted to keep it private, you know, very nice family, and asked me to take a look at it and come and see what I could do and ended up being hiring me. 

Bill Bice: So when, when, when was that? When, when did you move over to Worldox? 

Ray: Yeah, so I started consulting with them December of 2008. So, you know, right after, after the, in year or so after the nQ sale. And it’s, I was back in New York. So I thought, well, you know, I’ll, I’ll help them out here. Maybe they want to sell it. I don’t know. I’ll help them a little bit. And, but, you know, I’m never going to move to New York area. And lo and behold, 13 years later here I am in beautiful New Jersey. And it’s a phenomenal company. I, they, they built such a platform here with a great software platform, very focused, very focused on document management. We, we don’t do everything. And then they built a channel, a very low price, you know, fair cost and good value, and then a reseller network that sells, supports, and implements the software. So, you know, we’re a manufacturer of a product and we do help in and help and support of course. But it’s been, it’s been real fun, fun project here. Definitely. 

Bill Bice: And so you’ve really, you’ve really switched to a different area within legal tech, within document management. And so I want, I want to talk about where, where that’s going. What’s coming next? 

Ray: Okay. Wow. So it’s kind of, you know, it’s obvious when you say this, but then again, maybe not everybody thinks it’s obvious, you know, the legal market, as you know, is a niche market, right? So what, what happens elsewhere in the world maybe translates, or you can follow, but we all kind of marched our own tune as, as attorneys do. And, and we love them because of that. And us that have been the market for 30-35 years, you know, it’s just standard for us. So I think even DMS. So the innovations dozen years ago, you know… Email. Our systems were designed to save documents, Word, Excel, and back in the day, Lotus 1-2-3, and WordPerfect and documents in the system. All of a sudden, while we talked about scans, all of a sudden you have scans coming in. 

Ray: So you had to do things, you know, and making sure that you supported viewing the scans and full text searching the scans and different things. And that was a whole, and still is a whole market to OCR and non-OCR documents to make the text searchable and viewable like that. And then email came along. So email came along and all of a sudden people are saving far more email, you know, something like two to one or three to one than they are documents. And they certainly probably don’t save every email in there, but the important ones. So now we have a, you know, massive databases and different things to search on. And then as you know, I don’t know, maybe three to five years ago, five years ago, Cloud was, you know, we knew about some cloud competitors, you know, you know who they are and, you know, it was there, but most of our clients, you know, they’re on-site on-premise and maybe they have a cloud back up pretty happy with what they have. 

Ray: And then the last three years, a lot more pressure for both, I would say both mobility and Cloud, and maybe they go hand in hand, but there are ways to do one without the other. And it’s the mobility aspect. And we, you know, we still a primary product and top sales is still the on-premise product. We, we have a Cloud version of it, and we have a lot of attorney generals and others that they or not going to Cloud in their minds, right. The attorneys say, well, we have, you know, we have very sensitive family cases in here and stuff, and it’s not going Cloud, but, but I won’t say that I’m not bullish on the Cloud. Meaning I don’t think the Cloud’s going to take off. It is taken off. And I, from here, I don’t think we’re going to ever abandon what we have. I mean, it’s a big market for us. We have almost 7,000 customers and move totally to the Cloud and say, here’s our, our new strategy. Instead, we’ve chosen a hybrid model. 

Bill Bice: You built a bridge to the cloud, right? You, you can run on-premise… 

Ray: Absolutely. 

Bill Bice: Access via the cloud, or you can go fully to the cloud. You can go sort of anywhere in the spectrum that you want to be. 

Ray: Kind of a midrange. We have the enterprise product, which is on-site. We provide the infrastructure where they can access it from remote offices and from home and get to Worldox in the data set. And then, of course, we’re moving in the Cloud. They just simply just download a tool, a Sass tool, we call it that allows full interaction through terminal server type of environment. So we are currently working and Worldox. So GX4, Worldox GX4 is current product generation 14. If anybody wants to know what that means, that 14th main version. So, Nick’s version will be Worldox 15, dropping the access because I kind of feel that 15 sounds better. And basically, that is, we haven’t totally announced yet. Some know, but we’ve, we’re the entire architecture of Worldox has been pulled out. Then, the guts of it, the talk communicates with the database, and it is now all communicating through our web stack. 

Ray: So over the last couple of years, we’ve rebuilt and redefined our web stack so that originally, so firms could use our web brow to get into Worldox on a light use on a, Hey I’m, I’m on travel, etcetera. Now, of course, of course, that has become full-time. It’s not light anymore. It’s like, you know, I’m home, I’m here. I’m in the motel. And it’s always been, we had some users doing that. So pandemic was a big switch, but, you know, we didn’t lose any firms. Like we maybe lose the churn that we normally do every year. A few firms cancel maintenance, etcetera, but we helped them transition to remote. And, you know, they really never missed a beat, a phrase that one attorney came back and thanked me for our great software. So the next version, the concept here, it’s about three quarters done. 

Ray: So I don’t want to say the exact date, but it’s coming around the corner and it will entirely have the rich features of Worldox. Our clients love Worldox because of the feature set. It is, you know, Windows best program and you can do anything. It’s fast. It’s, it’s right there. And of course, with local data, you know, it’s, of course, it’s fast, right? Searches, the web browser, for example, you do a search for 10,000 documents, return set on a web browser you’re going to paginate. I mean, you don’t bring those 10,000 back and have them very immediately with all the fields to do what you want with it. So it was pretty rare if you can do that, even Facebook, LinkedIn, you know, you’ll see the loading and the, on the autoload. So with Worldox, of course, our developers, they bring back those 10,000 records, literally, because it’s right there. 

Ray: So the experience of sorting the columns and quick finding, filtering will always be much better. So this new kind of be a hybrid. You download the Worldox client, but all the guts will literally speak through a web server. And the joy of that is full, we hope, and so far it’s proving out a full Worldox client, sorry Bill, a full Worldox client that speaks to data anywhere. I mean, firms are inherently moving to Azure or maybe Amazon S3. I would say legal firms though, being honest, it’s Azure because of Office 365, the security around, it’s amazing security. So little too much on that, but that’s kind of where we’re going with that. We’re trying… 

Bill Bice: Well, but it’s really interesting the background behind that because you’re leveraging web infrastructure, even for firms that choose to stay with a Windows client on Premise you’re, building in internet-based infrastructure regardless of how you choose to run it. And, and so that says a lot about where, where everything is going. 

Ray: Yeah. Yep, yep. It’s, it’s a must. We, we have to have it, you know, and to have it, I think, you know, say, you know, honestly, I hate to say this out publicly, but we’ve passed on very large clients. You know, we’re a small to mid-player. We do have larger clients as you know, but there are some that have approached us and gave us RFP 1000-1500 users spread over a hundred offices. You know, it’s just not how our model works really well right now. With the new product I’m anticipating data is anywhere and your data center put it in Azure, with Azure too I see more, more firms going to 365 than three to five years ago, of course. Now when we pull out polls, you know, they’re pretty much there going there and you get so much for free. 

Ray: You know, this is a costlier platform when you buy it, obviously, but so much comes with it from, you know, the information protection, the AIP, for example, Missouri information protection. I mean, a guy mentioned to me, good friend, Michael Kraft over at Kraft Kennedy. He said, Ray, you know, this is kind of cool. You know, let me show you all this stuff, what my programmers are doing and my techs are doing. And, and what if, what if Worldox was wrapped their documents with Azure information protection? So you literally could have protection on a document level, not a deep, you know, not a matter level, etcetera, on a document level, those documents from there can be pushed out and shared with you, Bill. And I could say, you get to read it for five days read-only, only you, oh, guess what it expires in seven days, pull the document back. 

Ray: Just amazing things, which forget ethical walls, I mean, ethical walls would kind of be driving that, of course, but man, that does change the game because instead of, you know, saying this whole matter and there are 10,000 files, it has these rights, you know, we’re seeing these documents, you know, truly they’re protected by, by Azure AIP, which is, you know, I guess that’s redundant AIP, which is really there. 

Ray: So I see security just really going crazier in that direction. We have firms that when we talk about ethical walls and proper setup, they, you have the opt-in op-opt out model and there are different ways to do this. So when you set up a matter, typically firms will just say, Hey, here’s, Joe’s Construction. Everybody can access that matter. That’s the easiest, right? And, and we’ll restrict stuff as we get stuff in there. The proper way to do it really is to say, wow, attorney A and secretary paralegal set for these four people only work on this, let me give rights only to those people. And you have to ask for them, right. And you know, well, what that causes is a gazillion ethical walls around every matter and huge maintenance. So it’s just not being done well, it should be done. You know, how things are. So I think as we move more into AIP and Azure and stuff, we can start, you know, you apply labels and label would be for specific things. So that’s kind of exciting. 

Bill Bice: What we’re talking about is the building blocks, for better collaboration, right? That’s the end result we get to. And there’s kind of a full circle here because you were talking about workflows at the beginning of your career. That’s what this really is, that’s what you and I talk about all the time are workflows. That is the core thing that’s driving what you do at Worldox, but we do it at nQ Zebraworks, it’s why we do so much work together. It’s all, it’s all about workflows now. And collaboration is the, is the key workflow that, every law firm needs and wants now. 

Ray: It is, it is. I look at that subject and Microsoft. So we, our competitors are, you know, I mean, okay, maybe they’re much heavier funded. And, and you know, we at World Software, we’re privately funded. We, we are for profit. We like to keep out debt, which has really helped us do good in bad times. And we haven’t taken in hundreds of millions to do all kinds of stuff. So they have sharing solutions. They’ve come out years ago with this. 

Ray: Well, you know, what we waited till the time is right. And we have a full Microsoft teams integration, you know, which is awesome. Microsoft built it, it’s free for the firms and we’re leveraging it so that collaboration can now take place, you know, within the team’s environment. So it is important. And, you know, we’ve talked about this, as you said, the collaboration and integration between products, you know, people ask me, what’s the difference between, you know, maybe Alfresco and you guys there, there are all kinds of Documentum, you know, there’s all kinds of corporate programs, legal programs, specifically, we’re a smaller market, not maybe so interesting to some of these corporations, but we integrate with hundreds of other programs so that when you push one button, the other vendor pops up their interface, and that’s really important… the workflow for attorneys. 

Bill Bice: Yeah, you really can’t be successful in legal with, without just a tremendous amount of investment in integration. And it’s interesting because legal, legal technology has opened up in the last few years. Right. We’re seeing a lot more, venture capital investment, a lot more private equity, but in the end, it’s the companies that stay focused on the market and deliver that integration that continues to understand how attorneys work, that is, that’s where I see the most success. 

Ray: Yeah. Agreed. 

Bill Bice: It’s amazing how much money you can spend not building the right stuff. 

Ray: I, yeah, I think so too. And I think, I think too, so see, pandemic, we all have our views on that and have a general idea of what’s happened. But firms, what I’ve heard from a lot of our small firms is they’re not necessarily looking for new products, per se, but they’re looking at, at products specifically, either existing or improved products they have, or new products that can increase their workflow and make them more productive. You know, instead of, you know, we need document management, or we need case management, you know, it is more now we have this problem, and they have within reason done this, but now it’s much more focused on that. And perhaps they’re getting their numbers back up after the pandemic. I’m not sure what, but we love that because we feel that firms only use about 20% of what’s in our product. 

Ray: I’ll do a webinar and a feature we’ve had for five years and the firms will be, wow, we need that. You know, well, turn it on. We’re very flexible in letting the IT director minimize what’s on the cool bar and they probably have some of these features. So yeah, I mean education, and you’ve been doing some I see, but we’ve been doing a lot of webinars, you know, we’ve switched from virtual, from trade shows, you know, virtual just kind of is not there yet, in my opinion. So lack of trade shows, I don’t think they’re coming back to a full capacity. And I ask myself, why do I want to spend that much on a trade show in the future to webinars, educational webinars. 

Ray: So, you know, we have our partners on, we have our resellers on and a panel talking about how to, how to set up document types, a simple thing, but you know, very complex for firms when they’re trying to fight over which doc types they want in the system. So I don’t know. I think selling through education, you know, I think is really something that we, all of us vendors need to focus on, not, not to get sale, but how can we help the firm and educate them and they’ll buy your product. You know, if you, if you give them the right solution, you can sell them through that. I’ve found in the past. 

Bill Bice: Yeah. Agree, agree completely. Well, Ray, it has been, it has been a lot of fun catching up with you and getting some, some history and some insight into, into where you’re going. Thanks. 

Ray: Yeah, Bill, thanks so much and be good. 

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