We heard the Oleksiy Dorohan’s speech at some Legal Startup Crash Test event. He talked about a Start Business Challenge project – a step-by-step guide for business registration.
Almost two years have passed since then, and the fate has brought us together again ?
Oleksiy is the Executive Director at BRDO (Better Regulation Delivery Office), expert on strategic development and informatization in law. In addition, he is very cool being engaged in hatching reforms in Ukraine together with his team (that greatly simplifies our lives).
For example, BRDO developed 60 resolutions (adopted by the Cabinet of Ministers of Ukraine) that improve the business environment, and more than 1000 illegal and outdated acts were abolished. In addition, the BRDO Office developed and now supports a number of online products. For example, the Inspection Portal or the portal for monitoring road maintenance costs roads.brdo.com.ua.
We questioned Oleksiy about his career path: how he moved from Big Law to innovations and what challenges he faced; learned about his work on projects and the implementation of reforms; asked him about the legal market and figured out why he would like to get law firms from the Front Office to the Back Office… and something about anger and its release.
– Are you a lawyer or IT guy?
– I am a lawyer and IT guy.
– Tell a little about yourself. How did you come to hatch reforms?
– As a rule, when I tell this story, people think that I’m joking or out of my mind. I graduated in International Law from KIMO (Institute of International Relations attached to Taras Shevchenko National University of Kyiv) and went to work for Baker McKenzie immediately, even not receiving my Specialist Diploma.
There I got a huge experience and, some say, sharpened my skills. For example, I participated in billion dollar transactions, etc. I wish you could understand that when you say there that you want something else, they ask you, “Why? You are already working in Baker. What could be better? You just need to work and everything will be fine. You hit the jackpot having gotten a job here…”.
That’s where I used IT solutions on a few occasions to speed up due diligence and other routine processes. For example, once I handled the most expensive sale and purchase agreement in the Ukraine’s history including about 200 lease contracts (200 PDF files with 300 pages each). I was the unfortunate junior lawyer who had to check all these files. And this was a case when I used a certain trick: I ran all documents through special programs, compared and checked only those details that changed. In such a way, I saved tens of thousands of dollars of my billable hours.
I believed it was well done, but my colleague didn’t think so. It was a risk to them, because they never did in that way and had no guarantee that I didn’t make a mistake. Moreover, it was very important for partners to have a clear project prime cost. They were clear how many hours they would work on this project, because they always did so. And I crashed their scheme. Then there were some more attempts to use IT solutions, but I realized that innovations were not in a great demand in Big Law at that stage.
– Is that when you decided to change something?
– Yes. As time passed, I began to get depressed, because I did not see the end of my advice. It is impossible to explain ordinary people, who are not lawyers, what you are doing: some desk duties. You do not see the result and do not learn from your mistakes. And you do not know how it works when dealing with registrars, prosecutors and officials.
I missed this. I wanted to understand how the business works in reality. So I went to work at a factory.
– What? So you left Baker to work at a factory, did you? What factory?
Yes, it was Coca-Cola. Just so you understand – there was the factory in the field, communication with village councils, executive committees, district government administrations, registrars, prosecutors, police. It is a real life. It is what really happens in the country. I would like to see it. And I got there a maximum real life trash experience.
It was a wonderful experience: they demanded bribes and turned off gas. It was great. There, it was good when you saved something by using IT tricks. And I got there experience I wanted.
– And what happens next?
– Then I was invited to the Vasyl Kisil & Partners Law Firm. However, before taking this job, I warned my colleagues that I would like to devote 20% of my time to my projects – innovations in law. They agreed. But you are an asset for your law firm. Accordingly, your every billable hour is cool, it’s the company’s income and profit. And 20% were also the hours that I used for my projects. That is, the firm is interested to make you working with a client rather than investing time in some strange things, which success is in doubt.
So eventually, I decided to devote my full-time attention to developing innovations in law. However, we had failed to agree. So I almost finished my job as a lawyer.
– Where did you go?
– Then life has brought me into contact with Oleksiy Honcharuk, who is the former BRDO head. He needed lawyers for an office that would be engaged in the deregulation reform. He invited me to join his team. At first, I worked as a lawyer, however, I understood that this work was related to reforms and I had a future. In the first couple of months of work at BRDO, we developed a methodology, and I developed the first version of legislative review based on Google tables and forms. And now, with the team, we have already developed several portals and services that more than a million Ukrainians use every year.
– How many people are the team?
– Now we have about 12 people in the technical team and 40 other experts and analysts.
– In other words, the state, actually, gives you free rein to implement all these things, doesn’t it?
– We are funded by donors. This is the European Union, Canada, the United States, the United Kingdom, the Netherlands and others. They provide funding for reforms, and, accordingly, our work. We implement our initiatives together with the Government.
– How do you like to work with the Government now, compared to when you worked as an inhouse lawyer?
– I would divide it into two stages: the first one is the accumulation of anger, and the second one is its release.
– Is everything so bad in the legal service market?
– I’m not saying that this is anger at the legal service market. This is anger at how the state works. The restless nights, clarifications, officials, calls, letters, jurisprudence, the Tax Code, the Soviet Union’s Labor Law instruction – all these things do not make any mentally competent person feels positive emotions in the process of work. If you figure it out, it’s hardly pleasant. Accordingly, I got angry.
– Do you simplify the documentary routine? How useful are your services for people?
– It is important to understand that we do not provide “services for services”. We develop services that solve the problems existing in the business. And we solve them in many ways. In three years of activity, we have prepared 60 resolutions of the Cabinet of Ministers. These are initiatives saving hundreds of millions of dollars annually. This is construction, energy, agriculture, etc.
In addition, we have noticed that there’s little use in changing the rules, because the business won’t feel them quickly. We need to do useful services. For example, entrepreneurs have a problem with information on how to register their business properly. We, in turn, write analytical papers and green books describing this procedure. At some point, we came up with an idea: why not use this knowledge base to create a service for entrepreneurs that will explain to them how to register this business. So we developed our first service for entrepreneurs – the Start Business Challenge.
– Tell us more about the project.
– This is a step-by-step personalized guide to register more than one hundred types of business. This service operates on a decision tree basis. We all took tests, for example, which Harry Potter character you are. You answer some questions and get the result.
Here’s the same: you answer questions that help you understand what exactly you need to do to open your business. Such questions are simple and clear. At the end, a person receives a step-by-step instruction in Ukrainian on where to go, how much to pay, how much to wait, can download necessary application forms and so on. After these steps, entrepreneurs, as I like to say, get a super power. They may not be afraid of inspections.
– What is the difference between the online house of justice and your service?
– These are very different services. The Ministry of Justice’s project is an electronic state service for registering an individual entrepreneur. And we developed the State Information Service providing information about it. This is part of several services available on regulation.gov.ua.
We received several awards. This is the Open Data Social Impact Award 2017 and 2018 (that is, we received this award for two consecutive years) for the greatest social impact in using open data. These service also got the Social Project Award. Now the European Commission has selected this project in Top-50 services that help entrepreneurs in Europe. We are still waiting to know what position in this Top-50 we have. I hope it will be some leading position.
– What project developed by the team would you make particular mention of?
– It’s hard to answer. All projects are cool and important. For example, the Inspection Portal. It is visited by a large number of people. This is a state portal containing all planned inspections, except the tax ones. Also, you can check your company in these plans. Moreover, it publishes information about inspection results.
Generally speaking, we implement seismic changes. It is not enough to have good rules. It is necessary to let people know about them. It is not enough to have clear rules – it’s is necessary to have a reason to comply with these rules making sure that that’s not about inspectors who always demand a bribe and remain blind to everything. If one of these elements is not present, nothing works.
– What about plans for further work?
– Yes, there is so much work to do regarding the business regulation in Ukraine. Accordingly, we not only amend the texts of laws, resolutions and orders, but also develop legal tech solutions. The Inspection portal is one of those solutions. And we have a few more.
Again, we work as a non-profit organization, and this is our main difference. Start Business Challenge could exist as a commercial project selling services to people. But this is a public resource funded by donors.
– Did you think about getting back to the legal service business?
– I’m not interested in the legal service business. I’m interested in business models and digital solutions replacing services. Because no one needs a legal advice as itself. It does not solve any problem, and nobody is ready to pay for it. People are looking for solutions to real problems. And they pay for them. And people do not care whether there are lawyers or some algorithms.
For example, when I buy a cookie, I do not think about bakers because I do not need their services. I need the result of their work. The same is about the lawyer services. In the mass segment, nobody needs lawyer services, because people need to find a solution to their legal problems.
If I work again in the law firm segment, I will work to push them out of the market getting from the Front Office to the Back Office. I would like to make them half data analysts making an intellectual product, which is currently produced by piece, mass-produced.
– So, you think that the legal service market’s future lies with this, don’t you?
– It lies with the mass segment of the legal service market. Certainly. This market is now very local, expensive, technologically backward and very small. At the same time, it has a huge potential.
– There are still old-timers who can not be convinced that automation of manual processes is needed, aren’t there?
– This is not a mass segment. Regardless of whether they got it or not. This is a matter of time. Automation does not come to all life areas at the same time. I believe that the 5 most mass legal needs of Ukrainians, which are very poorly satisfied now, will be satisfied with online solutions in 2 years.
– What needs do you mean?
– It’s all services related to inspections and contract management. That is, it is an electronic signature, contractor monitoring and payment tracking.
The next one is a method of delivering legal advice. I believe that anyone will be able to receive the legal aid through an online chat or skype in two years. You will not need to go and look for these centers. This will make this system much more effective.
In addition, there are road accidents and parking. Everyone is talking about DoNotPayBot that appeals against parking fines in the UK. There is no reason why we can’t digitize this complex of relations in Ukraine. Even now, a third-party insurance can be bought through a smartphone.
Ukraine is between the East and West visions of IT start-ups. It seems to me that our country requires heavy startups that go into real life. Easy-to-do clear startups will not change anything. They do not change the business process.
– How do you think what is the situation with job vacancies in the legal service market? Everyone talks about a surplus in staff.
– There are a lot of job vacancies, but there are no people. I talked with a recruiter of four law firms. You can go after these poor lawyers, taking their job, but employers pay peanuts. The legal service market is low-paid now.
– How can a lawyer be in demand? What will be your advice to young lawyers?
– If we take my story, I had a deep understanding of my area of expertise and anger. In addition, there was IT as a hobby. That is, I combine two competencies.
As for the recipes, I do not have any. Let me just say: listen to podcasts, read newspapers, magazines and blogs. There are the necessary processes. And come to us to learn a new skill.