Taking on Nintendo, Big Law & Building the Future of Legal Practice with Damin Murdock

Today's guest has taken on global giants like Nintendo and Court helped raise over $100 million in capital for businesses, led one of Australia's biggest online legal teams and now runs a tech powered boutique law firm with a niche in everything from blockchain to building law and even medical cannabis regulation. Damon ran Murdocheng Legal Practice before joining law parfas the chief legal officer. Now he is the founder of Leo Lois and one of the sharpest legal minds blending courtroom grit with start-up agility. So with all that said, Damon Murdoch, welcome to the show. Thanks Ryan, thanks for having me. It's great to have you here Damon. It's sort of to start off with your journey through law. You've got a fascinating career and you've worked on some very large cases. So I guess firstly you studied in Canada, Australia and Europe. How did that experience shape your legal worldview? Well I am Canadian, you'll be able to tell that by my accent. Study finance and accounting back home and then my parents picked up and moved to the Netherlands and so because they left Canada I decided I would look elsewhere and I found Bonn University in the Gold Coast and picked up and came to Australia not knowing anyone and did law degree here. And then from there I did a specialization in international trade law. I was really interested in that Rotterdam is one of the largest ports or it was one of the largest ports in the world and so I thought I would go to international law there. So I went into Erasmus University, did international contracts, international transactions and some maritime and shipping law and then after that I came back to Australia, qualified as a lawyer, started out as a litigator working in a litigation firm in Sydney and then moved up to Brisbane, worked in an intellectual property, IP firm and came back and started my own construction and litigation firm with a specialization in technology as well. And then when I started my firm that was Murdoch Hang legal practice, it was my business partner and at the time it was startup world was just starting. So it was around 2012, there weren't really that many startups, the ecosystem didn't really exist and I went to the law society with a proposal and I said this is what we would like to do, we would like to offer these startups a package. That package was basically a fixed fee package to provide them with all the documents that they need for to grant or fairly cheap and reasonable price to get off to the races essentially. And the reason we did that was because my last law firm, I remember I had a startup come to us and they said, well we were just starting up, can we hit some help? And they're like, sure, well, it's going to be $1,000 to incorporate the company and you need an employment contract, turns in conditions, contractors agreement, shareholder agreement, that'll be $12,000. And the startups looked at us that we can't do that. So when we started our own firm, we wanted to be more a startup friendly. So we had all the kind of the presidents, the templates that we could tailor up to the startups. And so we started offering this fixed fee package. I think one of the first ones in the possibly the country doing that and talked to the law society got approval to offer that kind of package. And then we saw a law path pop up and law path was advertising. It was back then it was like a lawyer aggregator, which basically would find lawyers and then people would be looking for lawyers and when they would contact law path and then law path would put them in touch with the law firm. And then law path did a deal with Lexus nexus and Lexus nexus is the world's largest legal president database that lawyers use. And so law path ended up doing a deal with Lexus nexus to commercialize those contracts for the consumer. And so then what happened was that law path then started embedding those contracts into their platform and and then they needed a lawyer to help review those contracts. So I went in a coach law path when there's only two staff. They were just starting out and I was then their guinea pig lawyer trying different products working with law path to see what works, what doesn't work. And I also realized that I wasn't going to get to the masses, but I could see that law path had the capabilities of getting a fixed be product to the masses. So our corporate retainer for startups, we kind of put to a side and we started working with law path. Yeah, fantastic. We'll definitely jump into that. And I guess the law path chapter and building a legal scale. I'd love to hear more. I guess briefly, you know, you've had some case against Nintendo in a major IP litigation, which is very cool. And did that case teach you about law strategy and client management? That one's really interesting. There's some things that I can discuss, there's some things that I can't discuss because there was a confidential terms, but that case was about what's called technological protection measures. And that was the R4 revolution mod chip effectively that goes into Nintendo DS. So you have an Nintendo DS device, you have a game console that goes in it. And that game console was not an Nintendo approved game. It was, it was called the R4 revolution. And what it what it would do is when you put it in, Nintendo DS would open up, but it would open it up and increase the functionality of it so that you weren't just playing an EA sports game. You can now have a micro SD card, micro SD card, it goes into this and you could turn this console into an ebook, into an MP3 player, into an e journal, anything. In some of the hospitals and the doctors were actually using these chips so that they turned the end of the, the tender DS into an actual medical journal while they're doing operations. And so my client was being sued for copyright infringement. And the reason for that is that there's the console and then there's the game that's been approved. And it's like, it operates like a key and lock kind of system where the console's the lock, the cards, the key, you put it in and it unlocks the device. Well, these mod chips effectively figured out how to unlock the code. And so they were sued for copyright infringement on grounds that there's no way that you would be able to get your game to work with the DS console unless you had the code embedded into it that unlocks it. Or alternatively, you figured out another way to do what's called circumventing the key and lock by pumping it full of data and breaking it effectively by unlocking it. And so it's either copyright infringement or it's what's called a circumvention device, which is to circumvent the device that's supposed to be locking it up. And then they also sued for trademark infringement because once you put in this mod chip into it, the cartridge then opened or the game console opens out and it has the little Nintendo logo that pops up. And they say, well, that logo is supposed to be on the approved games, not on the device. So you're infringing our trademark as well. So we then sued them back and we sued them back because there's certain defenses that exist under the Copyright Act and an almost all legislation and anti-composition laws. It's about trying to make sure that you have laws that protect people while at the same time that law doesn't slow down technology and efficiencies and things like that. So we use the defense, well, we use a couple defenses, but one was that they actually were locking down a device which was against the objectives of the Copyright Act, which means that we wanted to be able to, because we were able to use it for other things, then we should be permitted to use it. The second one is that back in the VHS tape cassette time, and even now, you're allowed to copy something for your own backup purposes. And so if our client ought to game from EA Sports and then loaded that game onto SD card to put into the cartridge, then there's actually nothing wrong with that because they already own a copy of that device. But that SD card could contain maybe a hundred games. So rather than carry around a hundred different games with you, you could just have one. And we were using the defense under the Copyright Act for that. And then there's also another defense, which is what's called time shifting, which is like your Fox tail, or you can stop and pause and store a record. If you own it, you're allowed to do that. And then we were looking at other things, which is market segregation. Like there were certain games in Japan that were only in Japanese, but you could get that game and translate it so that came out in English. So that was one area of our defense. And then we counter-sured for what's called third line forcing and third line forcing is when you buy a product and they make you buy a product from somebody else. So the most famous cases in Europe, there was, I think it was a Philips coffee machine. but you had to buy, I think it was this press O capsules. And so you weren't allowed to use any other capsules in this Philip Cobbim machine and the European Union trip them and said, you're not allowed to sell a device and force people to buy from somebody else. There's a war counter claim is what's called their line forcing, which was saying, you are selling an attendor console or you're only allowed us to use the games that you approve, which in to get approval to make a game for an attendor, you had to have about a million dollars in the bank account and you had to have all these other measures that were very, very hard to succeed. So we counted certain up to that. And then we ended up going to court and we negotiated a settlement. Yeah, fantastic. And I guess what you're saying is that that product kind of enhances something. So while there's laws there, if you're trying to improve or enhance something, then there may be exemptions, right? That's right. Yeah, fantastic. Like moving on to law path and I guess the law path chapter, you know, you obviously had some of those big cases onto your belt and then with the Murdoch and Legal practice, you've discussed a little bit about. So I guess the gap that you saw in the market and some form of, I guess, innovative product you could bring, what were your biggest wins and learnings from leading the law path legal team in the early days? Well, we saw a lot of products that weren't working and so I guess it was really hit and miss at the very beginning. So what we were doing, we would sell a contract for $99 and then you pay $99 for a lawyer review. And it might be terms of conditions for a website. And then the clients would come back with cut and pace from 13 different websites with Uber terms and PayPal terms and then we look at a document, it's like a hundred pages of cut and paste from various different things. And we've promised to review that for $100. So those that failed in that product and we got rid of that. But the biggest one was going back to the basics and saying, all right, well, what do people need? Well, people need templates. They need documents to get off the ground and start but they don't have the funds to go to a law firm. So that's number one. Number two is, well, what if we were to offer a subscription that if you bought a subscription, you get all these documents from Law Path, but then on top of that, you could get a review from any lawyer or you could ask any questions from a lawyer to help you fill out these documents. And that's really the big change to Law Path is that they then created what's called the Legal Advice Plan which was pay for the Legal Advice Plan, get unlimited phone calls with lawyers on any question. And for up to 30 minutes. So what happened was then people would fill out a form via Law Path or a template that they got and they get stuck on a question or they don't know the answer, they can pick up a call as a lawyer or they would draft a clause and say, is this clause that injured? And that's what really changed everything because then from there, we decided to incorporate a law firm within Law Path and so it wasn't just about technology, it became a will-sass product where it was software plus the service. And the service was having lawyers. And so I started off doing the pilot just around COVID time or just before COVID and then in 2020, I got over some of my lawyers from my Law firm and we brought them in and incorporated Law Path Legal. And now we have about 17 lawyers, I think. And that's just been a real hit. And then once we've been, had lawyers involved, talked into the clients, we realized that, well, people also need accountants. And so now we brought in the accounting plan as well where you can talk to lawyers, you can talk to accountants, you have your documents. And then you get all the Law Path products so you got virtual offices and incorporating your companies and all graphs and asset compliance if you need to change shares and things like that. So it's now a full package suite that also comes with a lot of other add-on products like you can get discount on Sure and so you can go to GoDad and you can get all the different partnership deals as well like zero and N-Y-B. So that's how Law Path Legal and that's how Law Path itself is developed over time. - Yeah, most definitely, I mean, it's aimed to kind of democratize legal to make it accessible. And I think Law Path was a major player in that space to unlock it. Now, I guess when you look at like the legal services industry, you've got the subscription model, you've got fixed free offering, billable hours. What do you think the traditional legal industry gets wrong about access and pricing? - Well, when most people think about law firm, they probably think about bill hours or they think about the actual how difficult it is to reach out into a law firm. People are kind of oftentimes intimidated and adopt a lawyer because they, it's an area that they had just have no idea about. And they also believe that the minute they start talking to that lawyer, they're gonna be charged. And so I think that's the fundamental issue with a law firm is that it's not transparent about whether you get a free consultation, whether what the process is or approaching a lawyer and how to get access to a lawyer and what a lawyer will do for you. Generally speaking, no lawyer's really gonna just start charging you before they talk to you. Generally speaking, pretty much every law firm has has a free consultation. So if you're just trying to make your phone call to find a lawyer, you can normally just call up the law firm. You'll get it on the phone to a lawyer. You can explain what is that you need or what's required and lawyers are very, very highly regulated. So we have the disclose or costs. We have to give a cost agreement. I think the cost disclosure, we've got to explain what the scope of services are, what the range of fees are gonna be or the estimated fees. So that's the process. As you contact a law firm, you talk to them about it, they give you a quote for the services, you then accept it. But that's a long process and not all law firms are very good at responding to emails or phone calls very quickly because they're busy generally. And that's where law path has really made it really easy to streamline to same day service because most of the services are fixed fee. Most of the quotes for jobs are turned around in about four hours or less. If they're under $3,000, you don't need to have a cost agreement or disclosure statement. You just need to know what the out of the rates are and if it's a fixed service, then you kind of streamline that whole process. So what might take a traditional law firm two to three days to get engaged? In this case, you can engage with a law path lawyer within 30 minutes potentially. - Yeah, fantastic. It opens the floor, I guess for the templates, the AI, and then as you said, fast turn around times and just like understanding what you're getting right and kind of paying for a project versus an hourly rate. Now, I guess you've done over 100 webinars. I posted some of you in legal Q&A. So I think you'd probably be a big believer in public legal education, including the justice gown, but what's your kind of take around the education element and the industry? - It's hard because people don't like to read generally. So you have tons and tons of articles and a lot of times people just want the answer very quickly. And I think what TikTok and Insta and Facebook are doing and YouTube gives you the opportunity to do a quick search and watch a 30 second video and you just get the answer right away. Obviously, Chad GPT is pretty incredible as well and it gives you a good gesture, good understanding of what direction you should be going in with a quick answer. So I think the long article, if you look at a traditional law firm, you'll see long two, three page articles, it really dig deep into the area of law. But I think what people really want to know is just straights the conclusion, what's the answer? And that's why a lot of these videos are really good for giving access to that information and guidance on where to go. And 'cause law is all about where to go. Understanding the system, where do you find the information, how do you apply the information? Just because you know this, well, now what do I need to do to change my contract to reflect that? And so if you start piecing this all together, if someone says, well, automatic renewal clauses might be deemed an unfair contract term under the Australian Consumer Law and you have an automatic renewal clause, well, what do you need to do now, right? So you can actually probably go from there saying, I have an automatic renewal clause, how do I make that legal? I know now that under Australian Consumer Law might not be enforceable. So you can then ask, "Chach GPT, what do I need to do to make that enforceable?" And then you can start looking into what the steps are to make it more enforceable, and then you're probably best bet is to talk to a lawyer. But it gives you very quick access to what the issue is. what looks like to be the avenue to resolve it and assistance in trying to get that resolved. Now, there's one thing about doing business generally and access to law, which is if you have someone like law path where you can get on a call, have a quick call, and get some advice and guidance from a law firm, that's great for reviewing contracts, doing transactions, things like that. And then there's another side of it, which is enforcing it. And a lot of times people say, well, I have a trademark and this person is infringing it. And the lawyers say, okay, well, we'll send a season to cis letter and we'll tell them to stop infringing. And so you send them letters saying stop infringing and they say no good stuff. Well, there's nothing the lawyer can do now. The only way that you can actually stop them now is to go to court. And the same thing with someone saying, oh, they breached the contract they haven't paid me. Well, a lawyer can send a letter saying we demand that you make payment. But if they don't respond, the only next step is going to court. And even though it looks like a breach of contract and all that, everything says breach of contract, it's not actually a breach of contract until a judge says it's a breach of contract. And that's what's very difficult is they actually get the enforceability of the law and access isn't quite there. To justice, if you were to call it justice because to get to justice, you have to go to court. And to go to court is very costly and expensive. And if you're the one that hasn't been paid, it might you might put you in a financial difficulty. And for you to get out of that financial difficulties to get money from the person that owes you money. And the only way to get the money that that person owes you is to pay a lawyer to get that money. And so that's where it becomes very difficult because at the end of the day, the enforcement of the laws is a long process. It can be a long process and it's a costly process. Yeah, definitely. That's a great point. I mean, would you say on that point for small businesses and SMEs start up listening that the best thing they can do is have watertight contracts and kind of have procedures and steps in place such as, you know, having good contracts, setting notices, credit bureau reporting, all of that to avoid getting in that circumstance. Yeah, those are probably the best things you can do. So I always say number one is there's no rule that you have to wait 30 days to get paid. Everybody puts 30 day terms. But if you're doing a service, you finish your one month, you issue your 30 day, your invoice, you do services for another month. And then you issue your next notice or your next invoice. You've now done two months of service and you don't know whether they're even going to pay for their first month. So shortening your invoice periods like 714 days is a lot better so that you don't move into the next month of service. Doing an asset search, seeing on the company see how old they are, how long they've been around for you can use credit bureau checking their credit. They could just be open up, close down, open up, close down, they might just be doing that. So ideally you want to look into who the directors are, how long they've been running this business for, who their clients are, whether they're established or not. And then also your contract terms, if it's so fundamentally obvious that they breached a clause because it's being well drafted, then in those circumstances, they're not going to want to go to court because if you do take them to court, they won't have any legitimate defense. And they'll end up being liable for the money that they owe you plus your legal costs plus their legal costs that they because they lot when they lose the case. So that's what a good drafted contract does is it helps you enforce the contract and the other side probably won't want to defend proceedings knowing that they probably have a hopeless defense and the amount that they owe could be doubled now because now they're paying their lawyers and if they lose your lawyers as well. Yeah, absolutely. It's important, I guess, I really like how you speak on the enforcement side because everyone can talk about all there's a breach and there's things going on but until you actually, as you said, find a determination that there is a breach and then go about enforcing the breach, you're no better off really. Let's go into the topic of AI. I mean, there's a lot of hype in the legal industry. I mean, law pass being an early player since the end of 2022 and they've got law path AI, which is great and combines many elements. I guess you've used automation to launch your firm with an AI avatar. So I guess for Leo lawyers, your new project, what kind of role does AI play in the day today? We use it a lot. So we have a legal AI and everybody talks about using AI in law and hallucinate. So everybody knows about that New York lawyer that drafted legal submissions submitted it into court and then everybody went to try to find the cases and they didn't exist. And I think it was Chattu B.T. had hallucinated, it made up case names and it made up croaks from real judges. And so that lawyer caught in trouble by having to, I think he might have got fined and he had apologized all the judges for quoting them that for quotes that didn't really exist. And, and then a couple of lawyers in Australia have just got busted for something similar again, very recently. And so that's what first of all, the problem with AI is is that people aren't using it properly. It's a good starting point. It's a good so if you want to find the leading authority on this K or on this area of law, you can always just jump in and ask Chattu B.T. if they know the answer. But the problem is is that if you're not double triple checking everything that it says, you are going to run the risk of getting in a lot of trouble because if you're in your position on something that doesn't actually exist, then your entire legal positions flawed. Now, we have some legal AI that we use that has got rid of these hallucogens as much as possible. And the reason that the way it does that is it searches actual reported judgments. And when it prepares an AI report for us based on a particular question, it will then tell you in one line, this is what it is. And then it has the authority there and you can push that button and it takes you to the paragraph of the case. So it goes and takes you out out of the AI to case space, which is the government website. And then it gives you the paragraph from that case. So then you can double check it and make sure that that's accurate. And then even if you do use this legal AI, it's great. Well, you still have the double check and make sure it is there. The other thing is that AI is not always up to date. So you also have to look up to see if there's other recent cases or cases referred to that. Is there anything that's this overturned that judgment, things like that. So from a legal research perspective, it's really good. Something that might have taken me six hours, probably is reduced down to two. So in terms when it comes to legal research, because you can find cases much faster and you can get to the area law, look quicker. For like I'm one of those people that's gutty law, which when I study law, I read every textbook, I read every everything. And I can remember a lot of it. So if someone comes to me, I can tell you instantly that's from my tort subject or that's from my contract subject. I can know exactly the area law and probably applies to it. But for people who didn't do that, this is really great. So people who can't recall the law or don't have generalist experience or have come from a very specific area of law. AI is a great opportunity because it gets you into the area of law that you need a lot faster. And for instance, I've just briefed a barrister. He's from the United States. He's just moved over here because his wife's I'm over here and crossing jurisdiction. It's very hard. But for him, he can, I told him he's got to get this AI because he can just ask it. You know, in America, this is the legislation that we have in California. What's the equivalent in Australia? And in this section, we have this area of all in Italian seconds, right? So should you cross jurisdictional work? It's great. The other thing that we use it for is just general business. So when it comes to assisting with draft of script videos or or any kind of content for articles that you can help it draft a lot quicker. So you can do bullet points and let it expand the data for you. I also, you can also use it for cases. So you can upload your bank statements and get it to do an analysis of how much funds has this person put into the account. How much funds does that person put into the account? in the account so you can kind of get a good idea of what a forensic accountant will come back with without even hiring a forensic accountant so you get a good gauge of the data helps summarize the background facts as well. Obviously you got to make sure that whatever you're using is not going to be disclosed. As a lawyer we have a very, very tight regulatory rules on privilege and privacy and breach of confidentiality so you got to be careful with that but it's it's a good product to help summarize documents and things like that as well. Yeah absolutely so I'm curious what role does AI play for lawyers today in saying 2030? I think you've kind of hinted on some themes like you can simplify things it's great for legal research doing a bit of background work you have to double check it. How do you see it impacting the legal industry and how should lawyers be thinking about AI and in their careers in the next five to 10 years? I think it just makes us much more efficient and it actually brings down the costs for a client so back in the day you might spend five thousand dollars on a comprehensive letter of advice but a lawyer can't charge that much because if they're using AI they're not allowed to charge so what that means is that it results in the cost coming down for you but it also means that the lawyer can produce a lot more during that time and that's that's what effectively means is that you're doing your lawyers are going to be much more efficient. Your senior lawyers are able to spend more time just teaching and reviewing and and and improving the systems and processes and I think that's what AI is going to be there for is just making lawyers more efficient and cost-effective over time. Yeah definitely and I guess in next say we're looking beyond 10 years can AI ever come close to replacing a lawyer or is that always the human touch? I wouldn't say no I think AI will get to a point where they can probably do a lot of what a lawyer does and that's why I've kind of started deviating to litigation and the reason is is that I think AI isn't going to be able to be doing the in court work in front of a judge. It will be able to help the contract review the contracts and negotiate the contracts. Drack correspondence give case analysis but when it actually comes to court that's very very strategic that is you need someone that has a lot of experience in running that kind of case you need to know what their defenses are what their likely defenses are be able to pre-empt those defenses you got to strategize about what evidence you're going to put in wait for them to put on their defensive evidence and then you smash them with your reply so a lot of times with law you kind of you don't trick them but you you leave certain things out hoping that they're going to fall into your trap and then you make them look like a liar right so you that's what the strategy of mitigations all about and what kind of claim do you bring do you bring it all well if you bring it all then you've got to prove it all so I have a client right now it's like well there's a breach here here here here there's 15 different breaches or which one are you actually going to choose are you going to go for all of them and if you are you going to have a 15 day hearing so you got to be able to choose what you want to actually claim looking at what the costs to prove it are and and and having that strategy how you present your case how you structure it like your strategy is moving forward how you're going to win against the other side what law works for you what law works against you where's church you be teased just basically giving you the best solution here here's all here's all the here's all the breaches here's your claim to sue for everything and that's not always the right thing to be doing yeah absolutely I think as the weakness I've seen when I've like used GBT is that it only kind of gives you what you tell it and sometimes the best solution is not something that you actually know or the right avenue to go down so while chat GBT might say one thing ultimately chat GBT what necessarily only give you the right approach based on what you're saying whereas it can't take that overall as you said strategic view and then there's also the emotional intelligence aspect of it and kind of playing the opponent run yeah and I'll give you an example if you have a commercial lease for instance right and if a landlord terminates your lease because you didn't pay your rent on time in that case if you put that into chat GBT it would be saying okay challenge the termination of the lease did they give you proper notice was the notice confusing did they mislead or deceive you and they would just deal with determination whether it was right or wrong and how to get around determination right but there's another whole area of law that Chaturkiti Kradizamy know and it's called the equitable remedy of non-forfeiture which if basically says you go to the Supreme Court and say yes court I'm very sorry I didn't pay my rent on time and yes the lease was properly terminated but I have the money I want to stay in my property I can prove that I can pay my rent moving forward this was really just a slip up and the judge can say okay I'll give you the declaration and equitable remedy of non-forfeiture meaning that you can stay in your lease just pay the money that's it right so it's not because nothing to do with the contract and she actually do and never probably even suggest that as a remedy and most people have never heard of that remedy but it's in section 129 of the Crabayancing Act in New South Wales yeah I love that well let's move on to I guess you know a capital court rooms in commercial savvy so you advised on a hundred to two hundred million dollars in capital raises what do you think is the one thing that founders forget in these moments a lot of times they're very eager for the money and they don't properly necessarily strategize so a few things number one is choosing the right person to take the money from there's a lot of times people willing to give you money because they see a lot of interest in your product or your service but not necessarily you so once they take your money they will force you out and that's where you need to share all this agreement that gives you some protections but the reality is is when it's you versus big VC you're gonna ultimately most likely lose that fight the other thing is taking more money than you actually need so you might put a valuation on your business now you take more money than you need and that money is just sitting in the bank account your results and you getting diluted down a lot in your share holding when you could have potentially took half that amount use that money to grow it and then raise again at a much higher valuation and being diluted by half of what you actually were so those are the the biggest things I see in terms of of that and not understanding that dilution of share holding and not understanding that if you have 51% shares in your business it means that you have a right to appoint and remove directors because you need 51% on the corporations act to pass a resolution for the appointment and when we're over director if you get diluted down you fall below that amount which means that someone can get the shareholder's together to remove your unless you ever share all this agreement with what's called founders rights and founders rights says as long as I have 10% shares in the business I always have a right to appoint a director and there's no right for a shareholder to remove me unless uninccapacitated and then there's other protections that you can put in like major business decisions can't be made without the founders approval or a quorum for a shareholder's meter and director meeting can't happen without the founder or if the shareholders approve the sale of the entire business they must get the founders approval before going ahead with it so these are kind of measures to protect the founder but once you ask for those measures and oftentimes the investor will also ask for the same thing so these are some of the hiccups that we see when it comes to capra raising yeah absolutely what are some of the legal red flags and compliance risk that come up in startup capital raises and prepful IPOs it's normally what you haven't done is the issue so that's what we call pre pre capital raise base so for instance you might have a bunch of employees that you promised options or shares too but you never really worked it out you might have hired contractors to draft some of your code or create some of the intellectual property but you never had a proper contract in place. So if you if you have a employee and they create intellectual property for your business, generally speaking, the company owns it. If you hire a contractor that creates intellectual property for your business, the contractor owns it. There's no law that says that you the business owns it. At best, the business that paid for those services of the contractor has a license. But when it comes time for a capital raise, the investors are going to go through and they're going to start looking at first of all, if it's a tech business, do you own the tech? Have you been using open source technology? If you've been using open source code, what were the actual license of that? If you have contractors, where's your assignment or a deed of assignment in terms of IP or where's the contract that says you own the IP? And then it's getting into your asset registry where it's, okay, you issued a million shares, but you've issued a million shares at a dollar each and only put in a hundred dollars into the business. That's not okay. That means that the shareholders owe a million dollars to the company. The company went into liquidation. The liquidator can come after you for not putting up your one million dollars. So it's looking at the corporate structure as well. And so basically the capital raising phase is you start with the pre capital raising phase, which is looking at all the past transactions, mostly in relation to shares, what you've developed, your R&D grants, whatever it might be, going through and just verifying it all, making sure all the contracts are in place, you can put contracts in place afterwards. So it's okay. That's what a deed is. So a contract is an offer acceptance meeting the minds and an intention to be bound to an agreement. And there's something called consideration, which is you're giving up something for something else. So you're going to work for me, give up your time for cash. That's consideration. But if you, let's say for instance, are going to lend me money against my house like a mortgage or loan, if you were to give me the money and then after you gave me the money, you say, oh, by the way, can we get a loan agreement? That agreement might not be legally binding because at the time of you giving me the cash, there was no strings attached. It was, I now have the cash. But if you now want to sign an agreement imposing new terms like interest on that cash or security against my home, there's no reason why I should be agreeing to that agreement. There's no consideration for that. I've, because I've already got the consideration. I've already got the cash for here. So we say that past consideration is not good consideration. But you can get around that by doing a deed. And a deed does it removes the element of consideration. So that's what we call like an IP assignment deed. It's like, oh, I'm so sorry, contractor. I don't have anything in place with you, but you've done all this. Can you sign this document? And that document says everything that you've developed for us in the past future and present is all home buyers. And that's okay because you don't need consideration. It's a little technical, but that's what we do is we put all these documents in place that weren't there when they should have been. Yeah, fantastic. That's cool. And I guess going back to that topic of enforcement, I mean, you're someone who has a lot of courtroom experience. How should business owners or even individuals know when it's sensible to say litigate or when they should just simply walk away and take it less. That was hard because there are tribunals and courts that an individual can run themselves where the rules of evidence, which is the main aspect that makes a lot of things difficult, don't exist. They don't apply. So if you were in New South Wales, you can go to the small claims court in the local court, which is for claims under 10,000. And generally speaking, you can't really have lawyers. And if you do have lawyers, you can't recover any legal costs. And if you're going to have a lawyer running a small claim without recovering legal costs, the person with the lawyer is the one that's going to lose because they're going to spend $10,000 defending as $10,000 or $10,000 and trying to claim $10,000. So if it's a claim that's under 10, that's pretty good for you to be able to do it on your own. The other thing is you have the federal circuit court, which is for small claims when it comes to employment entitlements. And that's also under $20,000, but they're really lawyers. And then you have an NCAT, VKAT, QKAT, which are the tribunals. So in VKAT, that's pretty much any civil claim under 40,000 without, or 30,000 without lawyers. So there are ways to do it on your own without having to worry about being standing up in front of a judge. And these tribunals and local court matters, they're not intimidating. The judges and members there are there to help guide you through the process. And they know that you're not a lawyer. And they know that you don't necessarily know what you're doing. And they're there to give you guidance and instructions on on how to process your claim to try to recover the money that you're trying to recover. But then the question is, as well, when do you hire a lawyer and when do you not? And there's no hard and fast rule because I might see a case that's only $10,000. And generally, I don't touch anything like that. But if it's so blatantly obvious that there's absolutely no defense, I might just do it for free just because I feel bad for the person. And it's only going to take me an hour to get the documents ready to recover that money. So you never know, it's probably always worth while talking to a lawyer and they will tell you, this is worth pursuing or it's not or it's worth starting or proceeding, but you should settle as quickly. Yeah, that makes sense absolutely. And yeah, those forums and avenues are a good for like disputes as well as their ombudsman type routes. So I guess the last point on this is how do you balance legal risk with commercial strategy when the stakes are high? Insurance. Insurance is always a big one. It does depend, I guess it's a fairly broad question. But if you are, if you are going to sign a big contract, let's say, for instance, and this is like a make a break for your business, you've got to really look into that strategy. I've had a lot of startups who have started a company. They've got this massive opportunity and nine times out of 10, my startups will turn it down. And the reason why they turn it down is say, they say, okay, well, if we take this contract, it's not exactly what we're planning. But if we do do it, we're going to make $3 million. But that's just that one contract and that's that one customer and that's the one project and they can't focus on anything else. And it's a five year contract of a stuck in it. It takes you completely away from what your actual business plan was. So if that contract goes perishing the whole business classes. So you normally wouldn't want to be first taking on a contract that's going to be representing a percent of your revenue because that's way too high risk. If you're just a one contract business, then you might not be a business tomorrow. Once that contract's terminated, where it goes perishing and you have nothing to fall back on. Number two is it's just being well diversified. In this, that sense is having several clients that you can fall back on with revenue coming in. If you are going to take a big, big project, you need to make sure that you have your brand and butter on the side. They're going to keep you running in case that one goes perishing. And don't bite more than you can chew. And I see that all the time in the construction industry. You see these homeowners or home builders. They've never had a problem the past. They just run these projects. They've been very successful and they're approaching 60 and they decided to take on this big project with elevators and car stackers and big excavation and works. And that's always the downfall. It's always the downfall and oftentimes destroys their retirement because it's not the game that they're used to and they don't know these big developers. They don't know the games of these developers play with small builders. And so if you're entering to these big contracts, unless you have specialists behind you who know that industry, who know that kind of value, you really need to be careful. So have the expertise behind you. Have the people that you can count on to get assistance who know that client or knew that area work, have insurance, professional and demanding insurance, product liability insurance, workers' compensation insurance. and have more than just that one product. Have make sure you have your bread and butter. It's still there in case that goes wrong. >> Yeah, they're great tips. So thank you for sharing. Now, I guess that we move on to the future of law. I mean, the trends, the tech of the transformation. What do you see as the biggest disruption, say in the next five years, is it pricing, AI, access, education? >> It's probably what law path is doing. It's the access. So a small law firm that's going to open up today that primarily drafts contracts is probably won't be successful in five years. You cannot survive as a lawyer as a contract drafting law firm. Because that's where, I can already see a difference, where people are coming to me and they're saying, this is what I need drafted. This is what AI's told me. These are the clauses that I'm looking at. They're already half-draft in the contracts themselves already. So in five years time, you can just say, draft me this contract. And I know you can do that now, but it's not very good. But I think in five years time, it will be very good. And so that's one area of law that lawyers have to realize. The second one is convincing, buying cell of homes. Compancing lawyers, a lot of it is a process driven, anything that's process driven, you can consider will probably be gone in five years time with AI. So, buy cell businesses, buy cell homes, that's a step-by-step check, confirm, check, confirm, check, confirm during that 17 times. Lending mortgage documentation, things like that. So, as AI develops, it will do it better than the human, because it won't have human errors. It won't be identified in hiccups. And so, those area of laws, I think, are going to be gone. Same with migration agents, migration lawyers. So, I think property lawyers, migration agents, any kind of transactional lawyers, if they're not adopting AI, then they will lose to AI, because AI will either take over that job, or the law firms that are using it are going to be doing the work a lot cheaper, a lot faster, more efficient. And if you're still stuck in the back doing how it was, then you're just not going to be profitable. And the one that was going to come to you, because you charge your double to do the same thing less efficiently. Yeah, absolutely, that makes sense. I mean, if you can redesign and say the education for the legal industry and say, "Loy is coming up," what would that look like? And how would you kind of train the next batch of lawyers coming through? I think law school is essential. Law school in learning the law is essential, because it teaches you every area of law that pretty much exists, and how it applies to facts. And so, I can't see any way of getting around having to read everything and understand all the law. Because if you don't understand it, then you're going to miss out on being able to pick up uncertain areas that you're going to overlook otherwise. But law could, I think, adapt to if you just want to be a copyright lawyer, then there could be room for having very different streams of being lawyer. So, like, if you're in house council, generalist, then you need to know everything. But if you're just a copyright lawyer, then all in that's all you really need to know, then you just need to know contract copyright trademark. And if that was the case, then you can expand your learning to a lot different things, like technical aspects of copyright, like actual coding, and how to identify the copying and the things like that. But I think the main thing is I just turned to Bond University, where I did my lottery. I think it was an ancient 79 or something, the Austrian, or the American Bar Association came out with a report that said that something like 70% of law students are useless when they graduate, of no value to a law firm at all. And so Bond University created his law school in I think 1986, and I believe they hired Cornell University to help build a curriculum for their law school. And because there was a private school, they could do whatever they wanted, really, in that curriculum. So they created it that every single subject had a module, and when you graduate, you get a skill certificate as well. So, the very first object was legal research. It was an actual core subject of how to proper the research law. Then it was one class had one-on-one negotiation. The next course had two-on-two negotiation. The next one had three-on-three negotiation. The next one had court-mute court. The next one had reading cases and drafting kin summaries, and then presentations and papers. And so after you do 24 subjects of all that, you've effectively got the skills of a lawyer. So when I graduated law, I was pretty confident. I was a little bit older because I already done a bachelor's as well. But I also have that those skills in place, versus someone that goes to a traditional law firm that just writes a 70% exam or an exam, so a 70% that's multiple choice. It's just a totally different way of learning. So I think what laws going to implement is similar to what I study, which is the Australian research aspect, they will start teaching how to use AI, how to use AI combined with legal AI, combined with this, combined with that, how to stream my NIS, how to possible code or create your own GPDs, how to improve the efficiencies, and how to do case analysis using the technology, how to create court books using this technology, things like that. So I think it will be much, much more technologically advanced over the coming years. And you can just see it now. I use the print, I think 170,000 pages of documents a year, and now I probably print 1,000. Everything's digital now. And I just got my third screen now. So I use always work on one screen and print everything and read everything and crossing out with a red pen and then we do it and we do it. Then I moved to the COVID times, got rid of the printers, went to two screens, now gone to three screens and it's just eventually all pie off six screens. I'm sure. But yeah, the technology's changed all the time. And another thing, I don't know why I'm plugging body university so much, but the founder of Law Path, Nick Abraham, who's a partner at Norton Rose, he teaches AI at a Vaughan University to the Law School. And he's created as far as I'm aware, the first AI university course for lawyers at Avaughan University. Yes, very cool. I like to hear that. That's the practical element right. Because I guess a lot of people say that a lawyer who's just a fresh graduate, as you said, they don't have much value to give in terms of client experience. And I think yourself, you've been through a lot of cases and you've had a lot of, different experiences, different jurisdictions and all of that. And then for you to come back to Law Path and to provide that value is it's priceless for these clients. I mean, do you think is a part of it where as a lawyer who comes out right now who doesn't have that practical experience, they should just be kind of looking through kind of gaining work experience and then ultimately going to work, say, with being corporate and then coming back with more experience and richness? I think a lawyer generally, you need a lot of years under your belt to know what you don't. And that's the main thing that I find is that when I'm up against a junior lawyer, it's kind of calling them up and saying, "Hey, you should have a look at this because you're not doing, you're doing your client a disservice here." And then this is what you actually don't know. It's the practical side of things. It's the how the industry actually operates. So a junior lawyer who's starting out should get some just really good core experience under a core, like a good partner as a starting foundation point. It's the foundation years that are the most important. What I give you an example is that when I started out as a lawyer, every time I gave a piece of work to my partner, he would just cross across across across across across and give it back to me. And I just, I could not understand. And I would take his changes, I would make the changes, I would save it next to my desk. So next time I had to draft a similar letter, I would use the exact same wording that I used in the letter that he approved. And then the stuff that he had originally drafted across to out again, I could not figure out how I was ever going to win this game because everything was just getting across our cross, our cross our cross our cross our. And I can remember getting my first piece of work that just got approved. And that took about 18 months because it's just the way that lawyers write. It's the strategy written. You can't learn that anywhere other than under a senior lawyer teaching here. That's number one. The second one is under the next partner that I worked under. I would draft an eight page letter and I would spend 20 hours working on that. And he would give it back to me and just say, "There's a mistake." Now that's eight page letter that I've already read each time. And now I have to start again, read it all over again to try to find that one mistake. And I go through and go through and go through and go through and maybe I find something and he wouldn't tell me where that mistake was. I thought it was very, very evil at the time. And I don't do it to my staff, but I should, but I don't. Or what it taught me was that everything that you deliver has to be absolutely perfect. In the legal industry people are paying a lot of money. Every punctuation, every spelling, every format, everything has to be perfect. And you don't learn that unless you have someone treating you that way. 'Cause if you just get everything approved and you just send it out, you're gonna make mistakes. There's gonna be errors. And this is another good example is that one of my partners said, "We're a little lawful. The judge has never heard of us. We're up against Mint or Allison. The minute the judge walks into that court case, he's gonna say, "I've never heard of you, but I know Mint or Zai, I know their quality, I know they're good and I know their partners and their friends are mine and we go golfing together." There's an automatic bottle bias whether it's intended to be or not. And that's why as a smaller law firm, like Leo Lawyers or whatever, we have to be bigger and better than Ninters on paper. So when you pinch your paper, you printed extra white, extra GSM thicker. You get the white binders, you get the, the everything looking absolutely perfect. When you get a printed, it's lined up in perfection. There's not a single typo, there's not a single anything. So that when the judge does get the binder, and he starts looking at it, or she starts looking at it, as well, all these are quality lawyers 'cause everything looks perfect. So it kind of evens out the bias. And they say, "Well, maybe they're X tops here." Right? So that's why your years as a junior lawyer are really important, especially if you're doing an litigation, that you learn these fundamentals 'cause they're gonna end up helping you through our your whole career to make your really good, solid experience. Lawyer who's invincible when it comes to any kind of case that you feel that you can be put up against anybody and anything, and you're able to take them off. And that's why Leo Lawyers were small law firms, but we're up against all the biggest law firms every day. And we don't have any concerns about it 'cause I've gone it for the last 20 years, or 17 years. - Yeah, fantastic. You answered the next question just on what separates Leo Lawyers, and obviously having, I guess, being smaller, you're able to be more precise, but more attention to detail, and there's more time and care factor for the clients as well. - Yeah, and also think of it this way. I'm using a Mitchell Ellison, maybe I'll use someone like Thompson Gear or FreeHills, right? If you have a million dollar case, for FreeHills, that's one of their smallest cases. Or for Leo Lawyers, that's one of our bigger cases. We're gonna put everything into that. We're gonna put our whole team into it. We're gonna research it, and research it, and research it, and put more time, and you're gonna have a 17 year experience partner working on it full time, versus FreeHills well, chopped it to their junior associate. And they're gonna make mistakes because the partner's not putting effort into it. Not putting their time into it. So you actually, we're gonna get charged, probably one third of what FreeHills would charge, or even one fourth of what FreeHills would charge, but you actually have much more experience in time of going into that fall to win, as we will put everything we can into it to win. No, and that's the difference about of who you choose in terms of, in terms of the litigation who you're looking at. You go top tier, they're not gonna, and I had that, I had my old law firm, we had a top tier accounting firm, and we actually, they spoke a great game to get us on, but once we were on with the accountant, they didn't really care about us, you know? So, yeah, you normally want to, if you're a billion dollar company, go with the top tiers, but if you're a small, medium-sized business, getting a small law firm with lots of experience, the specializing in a certain area will probably be better than going to a top tier that's charging $1,100 an hour. - Yeah, absolutely fascinating. I really love the chat, Damon. Let's just end the interview with a few rapid fire questions. What's the most overrated clause in commercial contracts? - Overrated clause, you know, commercial contract. And now this is a very rapid. I would probably say the under, can I tell you, the most underrated clause is, is what we call the four corners causes. These are the essential clauses, which is the governing law, the place venue, the severance clause, the assignment clause. The most clause that gets overlooked the most is the assignment clause. If you have a business and you want to sell your business and your client contracts, you want to sell all the contracts or sell the assets of your business to another, you don't have an assignment clause, you can't assign that contract. You can't assign it over to the new buyer. So that is an essential clause that gets overlooked all the time. It's really important. - Yeah, that's really cool. One thing every founder should do legally in their first three months. They should, if they have a shareholder, they should immediately get a shareholder's agreement. Absolutely essential. If they're a shareholder's agreement, you're just walking into problems. And ideally start paying yourself as an employee, not just taking cash here and there. Your best bet is to, within three months, try to put you on as a salaried employee. - Fantastic. Worst legal myth you've had the correct. The biggest legal myth is. - Probably that lawyers are really expensive and have not much value. A lot of people say, "Oh, I've operated for 20 years, "I've never needed a lawyer. "Why would I need one now?" And the problem is is that you don't know you need one until you do need one, or you should have had one of what you could have actually accomplished when you didn't or when you, once you got the lawyer. So like I have one of my clients now, they'd be my client for 10 years, but 10 years before that, they had never had a lawyer and now they hire being eight times, 10 times years, not that often, but they just were blown away that they didn't know that that's what a lawyer does. (sighs) Hope you remove an employee that's not helping your business, just basic things like that. And we're not always that expensive. A lot of times there's fixed fee services or you even get a quote for a fixed fee. And if that's not a value, then at least you know that that's how much it costs next time. - Just on the side now, I think one of the lawyers here at Lowbuff, Mark often says, "He loves working on the master services agreement "because while it's a legal document, "it's actually a price list, it's a strategy, "it's a whole list of what your business can offer." - Yeah, master service agreements are interesting. The actual agreement itself is normally above 30 pages and the specifications at the back are like 100. So that's like the service level and everything else. - Yeah, hottest list and you've learned as a business owner. - Not putting in the proper processes and systems in place at the very beginning. So it's just so important to watch your financials. So as a law firm, for instance, monitor how much yours staff are building, what they're working on, how much money are they using or how much time are they putting into unbill work? So I get it all the time where someone says, "I wanna sue this employee because I just found out "they've done absolutely nothing for the last six months "and they've just completely taken us for a ride." And I said, "Well, quite frankly, that's on you "because you've let them do it and you didn't stop "put a stock to it, which means you're not, "your fingers are on the pulse, "you don't know what the heck's going on in your business, "that's your problem." So you should have time sheets in place, you should be monitoring what they're doing, You should be assigning. and the work to do. You should be checking to see whether they're keeping their targets, KPIs, OKRs, whatever it is. And if you don't have those, then you're going to have a lot of debtors. You're going to have a lot of unpaid creditors. You're going to have unmotivated employees who are very productive or efficient. Your business just is not going to be very good, and no one's going to be interested in buying it or having an exit. So you need to make sure that you have all your processes, systems in place and policies so that everything's running as efficiently as possible. And you can drive your staff up to a level until you need your next employee. So you don't just start hiring people. If you're monitoring what everybody's doing, you can see what efficiency level you're at. So then decide when it's time to hire the next person. Courtroom moment, you'll never forget. Well, two of them, one, one was just the very first day I showed up. I can remember standing in there were about 50 lawyers behind me. And I could feel my pant leg shaking. I was so nervous. And then another time I remember I was in one of the courts and I watched another another lawyer screaming at the judge and the judge yelling at him saying that's contempt and I'm going to put you in contempt. But the best story was that I was running a case where my clients owned a big piece of land and their son had built a house on that land. And then their son was claiming 50% ownership of the land when they tried to sell. The problem was that he also had three other siblings. So there were four kids in the parents and he was trying to claim half ownership. So we took them to the Supreme Court to remove a caveat and then we took them to the Supreme Court to kick them off the property. And our barrister cross-examine him very hard. And he ended up going into psychological or he went into a medical treatment facility that night and that's what could happen in cross-examination is that you can get really, really attacked by a barrister potentially. And that was watching it happen over hours of cross-examination and seeing the witness slowly falling apart. And then the questions start becoming a little bit delusional or the the answers become a little bit delusional. It was something that I always remember. Well, would surprise people about you as a loyal? A law firm is just like any other business. I think we love business. So a lawyer is just part of a business. And what we actually do people think lawyers are normally just doing dispute-related work and and fighting and things. But we do a lot of strategy. I've seen thousands of startups. I advise a lot of startups on what they're doing where the new market might be, how to possibly pivot whether they've thought of this as a different strategy or tactic. Looking at changing the shape of what their service agreements are, making it easier to sign up clients, things like that. So we do a lot of business strategy, not just law. And that's mostly because we see all industries and we know how, so if you hire a specialist in your field, they're normally specials in that field. But a lot of times if you hire a lawyer, we've seen every field. And a lot of times we can express that different experiences and how they can cross-gorelate or where there's something that's totally different outside the blue that might work for your business. Absolutely. Favorite legal tech tour right now? A habeas AI. William from Sydney has developed it and has really getting a lot of traction now. Fantastic. And his last one, one sentence to sum up your legal philosophy. If you treat people well, they'll always come back and we treat everybody as if they're your mitarits. We explain the law, explain how it works. We don't just use legal aids. Everybody, I would never want to hire someone on an hour of your rate. That's the last thing I would want. I'd hate kidding graphic designers. So I understand it. And as a lawyer, we empathize with what, what you have to do to go through the hire lawyers. So our philosophy is just treat you like your like Harris. That's how we generally operate. Yeah, I love that. All of the things are so much Damon. It was great to hear about your experiences. And this has been a real masterclass in modern legal practice. Just lastly, a plug for Leo lawyers. If people want to reach you and get in contact, how can they reach out to you? We've got, I got my own AI avatars. So we've got a YouTube channel, which is Leo Lois. It's LeoLoyers.com.au, Facebook, Leo Lois and Insta, Leo Lois as well. Amazing. Thank you so much for your time, Damon. Thank you.