Terra Firma: My Experience at a New Type of Legal Startup

WHAT IS TERRA FIRMA?

Like many law students running through the fall interview process of second year, I had little idea of what I wanted to do in the summer before my third and final year of law school. I was very fortunate that a family friend of mine had heard of my predicament and reached out with an offer to come work at his firm.

I knew that the firm’s primary focus was residential real estate law. I also knew that this firm, Spagnuolo and Company, is one of the largest residential real estate and conveyancing firms in terms of pure volume in British Columbia. However, what I did not know was that I wouldn’t really be working for the firm; not directly, anyway. This job offer was a summer position at a new company that the principal of the firm was starting to create a new system to essentially automate a portion of his work.

This company was called Terra Firma, and it was designed to systematize and expedite a chunk of the firm’s business. More specifically, it was a new way of providing title reviews for property. Essentially, during the process of preparing documents for the transfer of residential property, clients will get in touch with a firm like Spagnuolo and Company to have a lawyer review the real estate title of the property in question, and explain to the client several pieces of information contained on the title.

One of these pieces of information is related to non-financial charges (as opposed to financial charges, like mortgages): that is, many properties contain easements, covenants, statutory rights of way, etc. These charges could ultimately have an effect on your ability to use the property as you see fit, so having a lawyer look over these charges is a good idea. The majority of time these charges don’t have any real noticeable effect. Usually they merely grant a right to, for example, allow Shaw to enter the property to check on cable lines or grant a right to the neighbouring property for their roof to hang over a portion of your property.

Traditionally, in reviewing the title, the lawyer would often first have to look up the real estate title, order copies of the actual charges listed on title, and then spend time reviewing those documents and explaining it to the client. All these steps of the process cost money, and this cost was ultimately passed over to the client. Terra Firma, however, was a fix for this process.

Essentially, Terra Firma is a “Netflix-style” subscription service, whereby clients (usually realtors) would pay a monthly fee and have access to a library of not only the PDF’s of these non-financial charges, but an accompanying one-page title review on the Spagnuolo and Company letterhead. The business idea would theoretically save realtors a sizeable portion of money they would otherwise spend in ordering individual charges and having a lawyer review them every single time.

Where I came into the picture was the actual reviewing of the titles. Under the supervision of a lawyer, myself and another TRU law student would receive PDF versions of these non-financial charges that were ordered by several other employees, read them, and write a short one-page review. Then we would package the non-financial charge and the review in one document and add it to a library, which would eventually become available to paying clients.

By the time I left to begin my third year, Terra Firma had not yet completed this library, so clients could not yet sign onto the website and receive their charge and review instantaneously. However, the company was well on its way and already had a sizeable client base. Clients currently pay a monthly fee, but at this point place and order and receive the finished product within 3 days.

THE FUTURE OF LAWYERING

 

So what does this have to do with the future of lawyering? Well, from my experience, there were several parts of this experience that highlighted some changes ahead in the legal profession, including:

1. Automation and Systems: Residential real estate has been discussed by several lawyers I’ve met as a portion of the legal practice most susceptible to automation. Terra Firma is potentially one of those systems, as it in a sense automates a large portion of the business the firm was previously doing. Title review is not an overly complicated job, which meant that law students and other employees were able to review the titles and send them to a lawyer for a quick check over for quality control. The beauty was that once the title review was finished, it was added to a library and could be accessed any number of times it was on title, which in the case of strata properties or apartment buildings, was actually quite often.

2. Use of Outsourcing: One of the most interesting things I found about Terra Firma was the use of a legal company in India to review documents. We would package 100 or so individual charges, and send them to India for review. The law students would then review the documents sent from India, make changes where they were needed, and send them off to a lawyer for a final check before being added to the database. This meant that, due to the time difference between Canada and India, that the database (and currently, individual orders) was constantly being updated. The use of outsourcing for mundane and repetitive tasks has already been mentioned in books such as “The 4-Hour Work Week”, and it was interesting to see its effectiveness in the legal context.

3. Client-Centric Business Focus: The days of charging clients exorbitant amounts of money for things they didn’t really understand is over, especially for the layman trying to buy a house. Terra Firma’s monthly fee structure is one way of attracting clients who would rather not pay for each charge and then have a lawyer read it and tell them what it says. But Terra Firma was client-focused in other ways as well. The one page reviews were almost completely devoid of any legal jargon. They were ultra-simplistic, and took into account that a client doesn’t really care what a 90 page document from 1942 says, all they care about is whether there is anything in it that affects them in their day-to-day life. Even if they would like to see more information about the charge, part of the product they receive contains a PDF version of the charge itself. Ultimately, the mandate at Terra Firma was to provide a very accessible product for the client at a price that seemed reasonable.

4. Remote Offices: While we did have a small office space to work out of, once we had the system figured out every part of Terra Firma was accessible from outside the office. We kept track of individual orders on a Google Doc style spreadsheet we all had access to, we had portals into the office servers set up on our personal laptops, and title or charge ordering services all have online access as well. Even Dye and Durham, a legal courier service for older documents that had not been scanned and needed physical copies ordered, had an online ordering service. There were days where I was sick, or couldn’t make it in due to prior commitments, but I could always make up the orders needed by picking up my laptop and working on them from home.

WHAT DOES IT MEAN FOR THE LEGAL PROFESSION?

 

The reception from other lawyers when I told them this was mixed. On the one hand, many thought it was a very interesting project with a lot of potential. Some, on the other hand, weren’t buying it and thought it wasn’t the best idea. In fact, one lawyer got visibly upset when he discussed the loss of work it would mean for other lawyers.

In any event, it was an incredibly interesting experience and it was refreshing to see some innovation in a profession that is famed for its “last across the line” reputation. While it may lead to less work for some lawyers, the reality is that clients logically would be more attracted to receiving the same product with a more accessible interface and for a lower price.

At the very least, it will be interesting to see where such systems will take us in other areas of law.