4.02.2021: Sydney: With the Australian Financial Review’s StreetTalk article revealing that Canadian- based Dye & Durham is looking to acquire Australian legal tech business GlobalX just weeks after announcing the acquisition of SAI Global’s Australian Property division, are we seeing the ugly side of Australian Legal Tech?
John Ahern, CEO of leading Australian legal-tech provider InfoTrack, has today released a critical statement questioning the state of the Australian legal tech industry and companies ‘selling out’ instead of investing in home-grown innovation.
“Make no mistake – time and time again we see Australian technology companies for sale,” said Ahern.
In 2019, the Australian technology sector recorded approximately $5 billion in exports growing by just 0.9% from 2017. As our relationship with China and the rest of the world is changing, Australians need to consider the effect on our economy as the vast majority of our exports come from exporting goods to China and natural resources to the rest of the world. While the Australian Technology sector is widely considered to be capable of offsetting some loss in exports over time, we are a long way from achieving this.
There are of course some exceptions, stand-out performances from the likes of Atlassian and Canva come immediately to mind.
“Australian technology companies prefer to “sell-out” rather than export. This “sell-out” is a fundamental problem for our country as it erodes our long-term export potential and as the intellectual property ownership moves offshore, it stifles future local innovation opportunities.”
When publicly listed companies acquire, they look for synergies. These synergies invariably mean jobs losses, movement of operational control offshore and countless other negative impacts on the economy.
“If we want the Australian economy to thrive, we need to stop the “sell-outs” and start looking to build strong, Australian technology companies that compete in this evolving market and then export rather than sell off, the resulting great innovative products and services to the rest of the world.”
“Exporting will grow our economy, protect our data and nurture future innovation.”
Overseas entities are on the hunt for great technology and Australia has it in abundance. A more agile economy, the hard-working Australian technology work ethic and the rapid digital evolution of the Legal Industry over the last 5 years has yielded the technological equivalent to an Australian gold mine.
Foreign companies are looking to buy an Australian client base, their data and the platforms which support them. Dye & Durham acquired SAI Global’s property division in January 2021 for CA$87M. If the acquisition of GlobalX is to go ahead, a substantial amount of the Australian legal sectors will find their data under the control of this North American based company.
“The problem with selling out,” Ahern explained, “is that law firms and banks suddenly find their service and more importantly their data is now owned and operated by an offshore foreign entity.”
Ahern is calling on others to join the discussion about “buying local”. This should not just apply to Arnott’s biscuits, Speedo, and RM Williams, it should apply to Australian Technology, especially in the Legal Technology sector.
“It’s not uncommon for law firms to actively search for tech that keeps their data Australian-based for privacy, security and regulatory reasons. When a firm suddenly find foreign entities own their Australian tech vendor mid-contract, this is a big problem for them.”
