Here is how Quinn Murphy, a construction attorney at Sandberg Phoenix & von Gontard, summarized the birth of the online tool LienBuilder: “We went out and spent a ton of money so we could get paid less.”
It started with complaints. Murphy kept hearing contractors and subcontractors lament that they weren’t getting paid — a standard gripe in construction. But Murphy also noted their impatience with the legal mechanism for court-enforced payment: a mechanic’s lien.
That process, the construction companies concluded, was tedious, technical, and risky. A lawyer’s expertise often was necessary to prevail, but it was also pricey and not worth paying for if a crucial lien deadline already was blown. So companies were either trying to file the paperwork themselves or simply eating all losses under a certain threshold.
Murphy and his colleagues wondered if software and artificial intelligence could ease the dysfunction. They looked at the options on the market. The only solutions they saw deployed either all humans or all software, and neither was ideal. They decided to create an A.I.-human hybrid: LienBuilder.
The basic idea was to automate all tasks that didn’t require an attorney’s expertise or required it only once for all possible cases. Consider a construction company’s crucial first step: determining whether it’s too late to file a lien. Rather than have an attorney determine this on a case-by-case basis (while racking up billable hours), Murphy and his colleagues researched the lien laws in all 50 states and came up with algorithms so that a construction company could scan documents and enter data into LienBuilder and figure out very quickly — before spending a lot of time and money — whether a lien still could be pursued.
One reason companies are willing to do this, Murphy observed, is that LienBuilder charges a fixed fee, so it renders the process less of a gamble.
“The value of predictability is what drives this,” Murphy said, adding that the next version could offer a way for construction companies to even automate their decision on whether to submit a matter through LienBuilder by linking the tool to the company’s accounting software.
The current version has created other efficiencies, Murphy said. If you file a lien and still haven’t been paid, your next remedy is to ask the court to order a seizure of property and a foreclosure sale to ensure payment. LienBuilder can take a customer’s information that already has been entered and produce such a petition, which is then reviewed by an attorney before being filed with the court.
After tinkering with a beta version of LienBuilder, Sandberg Phoenix rolled it out about four months ago. The firm, he said, is already doing “multiple dozens” of liens so far and has 10 attorneys taking cases through the tool.
What would stop another firm from creating a similar, competing tool? Murphy mentioned two things. First, the up-front investment on the tech was formidable.
“Frankly, it was shocking,” Murphy said. The other barrier to entry, he said, was a risk-averse culture at many big firms. He considered Sandberg Phoenix to have a more disruptive mindset.
“The goal of this project was not to get more lien work,” Murphy said. “The goal of this project was to take over all the lien work in the entire market.”