Rags to riches may be a tired cliché in the world of business, but sometimes it is the only phrase that works. Rory Ross meets a man who in his lifetime has made a huge success of three businesses. And who came from nothing.
‘Graham Smith, Court Reporting Tycoon’, may not be an introduction that resonates in A-list circles, but in the forensic world of Crown Court trials and multi-million pound hearings and public inquiries, Graham Smith’s reputation as an enabler to barristers and high court judges is the equivalent of Bill Gates, Mark Zuckerberg and Steve Jobs rolled into one.
A humble court reporter tapping away at his stenograph in the 1980s, Smith spotted the potential of applying nascent computer technology to the fossilised court reporting industry, an industry that had barely changed since Charles Dickens’s days as a forensic scribe. He devised LiveNote, a computer program that helped lawyers find needles in haystacks. It gave judges and barristers the chance to access and annotate live transcripts of courtroom proceedings on a computer screen that was hooked up to the court’s stenograph machine. Within a few seconds of courtroom utterances being typed into the stenograph, they would flash up on computer screens that were set before the lawyers.
‘LiveNote eliminated the need for manual note-taking,’ says Smith. ‘Lawyers could quickly and easily refer to their notes or print out passages of text that they had marked.’ It saved them having to sift through reams of documents in order to find key passages of testimony, thereby slashing court time and costs. LiveNote marked the beginning of the smart-enabled court room and has ushered in the era of the super inquiry and the global super trial.
Within two years, LiveNote had become the de facto standard for all transcript management. It was used in United Nations war crime tribunals in The Hague, Lord Savile’s Bloody Sunday Inquiry, the Maxwell trial, the BCCI hearing, Lloyds of London, Arms to Iraq and the Guildford Four trial. In the 1990s, Smith introduced LiveNote to the United States where the legal industry is, as Smith puts it, ‘One thousand times bigger than Britain’s’. Johnny Cochrane used LiveNote when he defended OJ Simpson against the charge of murder. For five years in succession, LiveNote was the most widely used litigation software in the States. In the meantime, Smith had control of 80 per cent of the British court reporting market.
Having thus cornered the market, Smith sold LiveNote to Thomson West (now Thomson Reuters) for a rumoured $70m in 2006. He retired to the magnificent Celestine Abbey near Perugia in Umbria, once visited by St. Francis of Assisi and in whose gardens is embedded a six-hole golf course. Here Smith bred koi carp, golfed, collected Italian wine, tootled about in his Aston Martin, and spent quality downtime with his family; he and his Bolivian wife Marcella have three children: Alex, Richard, and Carla.
Then he got bored. It was time to relaunch himself back into the world of court reporting. The result? Opus 2, a new court reporting business powered by a sensational new litigation support programme, name of Magnum, which uses cloud technology to allow barristers, legal teams and judges to access all court-admissible documents and data remotely and in real time.
Psych v tech
A large, bonhomous man, Smith is an ebullient life-enhancer. To meet him in person and hear his stock of often ribald jokes, it is hard to imagine him dressed up and behaving himself correctly before a high court judge. But then he isn’t a lawyer but a business man.
‘There are two types of business,’ he says when we met in Opus 2’s gleaming computer-packed offices in Fetter Lane, a few yards from the Royal Courts of Justice. ‘At one extreme, you have commodity-type businesses like, for example, selling cauliflowers and sausages. Since supermarkets hold the economies of scale and distribution, any entrepreneur who thinks they can set up as a greengrocer is nuts. At the other extreme, you have immature industries in terms of their exploitation of technology, such as the law. Getting a high court judge to use a computer successfully is all about the art of psychology not the science of technology. Never mind geeks or IT people, only when lawyers themselves can successfully use technology hands-on will its full potential be reaped.’
Twigging that psychology trumps technology, is, Smith argues, a critical difference between entrepreneurial and corporate mind-sets. Take Smith himself. With few formal qualifications, he has relied on gut instinct, intuition, core competency and ‘not trying to be all things to all men.’ He’s no geek. As he points out, technology is not something that he is actually particularly proficient in. ‘In fact, if I spent time learning something that I am not good at, it would be at a cost to the business,’ he says. ‘LiveNote’s success was only in small part down to technology. No one was asking for LiveNote; it didn’t meet a need. But we guessed that if we could throw a live script before a lawyer so that he could scroll back and forth while making notes, then he would make fewer notes and wouldn’t have to spend that evening poring over the transcript.’
Smith points out that corporations like Arthur Andersen (now Accenture) and PricewaterhouseCoopers have tried to muscle in on the multi-million pound legal space but without success. The fate of LiveNote after Thomson bought it illustrates this point. ‘Thomson came back to market, and said “Okay, here is the next generation of LiveNote. Look at all these goodies we have added to create an all-inone product at three times the price.” But the market found new LiveNote wasn’t as good as old LiveNote. There was too much emphasis on the “what”, not enough on the “how” and the “why”. The legal world is an idiosyncratic, relationshipdependent thing. Just as law firms don’t offer a commoditisable product, so when it comes to offering specialised document management services to courts, they are not commoditisable either.
‘This is the problem when the corporate mindset tries to enter the legal space. The corporate says, “If I create a product with all the bells and whistles, then Game, Set and Match to me.” But all you end up with is an expensive proprietary suite of technology with closed doors all around it which tries to achieve lock-in. Most of the smart firms want something leaner and meaner. For the entrepreneur, the important skill is getting things to market, and getting the market to tell you what it wants. It’s not the “what” but the “why and the “how”.’
Getting to market fast is vital. This, according to Smith, is why entrepreneurs minimise their internal infrastructure. They get to market with one or two products that make sense, and then – and this is the really important bit – get the market to tell them what to do. ‘Corporates, on the other hand, take the opposite approach,’ says Smith. ‘Corporates are ivory tower merchants. They spend their time in meeting rooms, instead of with clients. LiveNote only employed fifteen staff but ended up with the most widely used software in the legal world. The difference between the entrepreneur and the corporate is the difference between a racing yacht and an oil tanker. Steve Jobs sailed an oil tanker like it was a racing yacht. Bill Gates conceived Microsoft in his garage. Zuckerberg came up with Facebook in his room at Harvard. That is how these things are done and how they should be done. It’s far more human than creating a monolithic corporate structure.’
Smith then turns to enthusing about Magnum, his revolutionary new document management system. It’s LiveNote on steroids. Where LiveNote rode the personal computer tech wave, Magnum exploits internet technology to globalise data transfer within the legal sector. Magnum can handle a greater variety of documentation than LiveNote while providing a secure, cloud-based interface for accessing, annotating, tagging and managing transcripts, documents and web pages, and then helping litigators develop their cases after they have sorted and reviewed documents. The cloud function allows teams of lawyers to access the data remotely and collaborate on it, so they can follow a trial in real time from anywhere in the world. ‘Rather than spend millions on developing a monolithic structure, our strategy and technology emulates life itself, which is how things should be done,’ says Smith. ‘We let it evolve. We can chop and change depending on what the market tells us.’
Magnum has made remarkably swift headway. The recent $5 billion litigation between Roman Abramovich and Boris Beresovsky used Magnum. Addleshaw Goddard, who represented Berezovsky, noted on its website that, ‘It was clear from the outset that it was going to be unmanageable and inefficient for the parties [to proceed without technology].’ It added that the way witness statements, expert reports, skeleton arguments and daily transcripts were hyperlinked to the underlying disclosed documents saved ‘hours of flicking through files to find the correct page.’
Abramovich vs. Beresovsky cost £1 million a day, but that’s cheap thanks to Magnum. Removing the need to produce hard copies of all the documentation at £26,000 a set saved ‘3 to 4 million pieces of paper - equivalent to several trees – and endless Post-it notes, pink marker pens and couriers lugging documents around,’ says Smith. ‘Now, just about every trial will use www.businessfirstmagazine.co.uk Magnum. And we’ve only been going for 12 months.’
Lord Savile is a big fan of Magnum. ‘I have no doubt that [Magnum] will be of very considerable benefit to litigators, judges and arbitrators in any case of size,’ he says. ‘To my mind, the most important feature is the fact that the program is cloudbased thus enabling all concerned to have ready access to properly organised and hyperlinked transcripts and documents.’ ‘
Opus 2 will turn over £6 million this year,’ says Smith. ‘Our US business is doubling every year. Magnum is about attracting the best technologists, operations people and financial people. It is a non-political, noncorporate environment. We are capable of doing so much more than many companies because of our culture of very smart people who feel they have a voice.’
Slough, no despond
Smith has travelled far and fast. ‘You can see the playing fields of Eton from the hospital where I was born in Slough,’ he laughs. ‘The only snag was the M4 that ran in between. I come from the wrong side of the tracks. My parents separated when I was 4. Until 6, I went to the local comprehensive in Maidenhead. When father ran off, we were on skid row. I failed the 11-plus, so left school with one GCSE in English and no idea what to do.’
Smith enrolled in a business college in Guildford and took a course in stenography. He soon became a court reporter. ‘I got to 160 words per minute, and could write shorthand within 6 months,’ he says. At 23, he had launched his own court reporting business. By 26, he employed more than 100 staff across the UK, and was appointed to more than 60 courts in eight cities. ‘When it became possible to hook up the stenograph to a personal computer,’ he says, ‘that is when I came up with the idea for LiveNote.’
‘I have always been driven by an instinctive feel for things,’ says Smith. ‘Before you can trust your instincts, you need to turn them on. Be open and learn, not only the tangibles but also the intangibles. Remember, it’s not the “what” but the “how” and “why” that matter.’