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Closing the Deal

Two recent Western Law grads create a successful digital start-up to tackle a paper headache

by Drew Hasselback | October 17, 2016

Zaman and Cassie
Sahil Zaman, JD'12 and Gordon Cassie, JD'12

Strange things happen to anyone who spends 40 consecutive days working until 4 a.m. on legal transactions. For Sahil Zaman, fresh out of Western Law in 2012, a string of 40 stress-filled all-nighters fired up his entrepreneurial spirit. There has to be another way to do deals, he thought. Why not use technology to make this job easier?

He took his question to Gordon Cassie, a friend since their first-year small group at Western Law. Cassie, a self-described “hobbyist” computer programmer, recognized they could indeed tackle the issue with technology. The result is Closing Folders Inc., a now successful computer start-up that Zaman and Cassie launched in 2013.

Closing Folders uses the cloud to centralize where all deal documents can be accessed at any time by any lawyers working on a transaction. Because it’s digital, the system does away with the need for paper. Even signatures can be scanned and applied electronically.

And at its heart, the key to Closing Folders is that it’s designed by lawyers, for lawyers. That means it offers solutions to the specific, real-world nightmares that Zaman and Cassie encountered in their days doing deals on Bay Street.

“We create signing packages,” Zaman says. “That’s a time intensive, very manual process that can produce a lot of errors. Closing Folders does that automatically for you.”

Those who have worked on a big M&A transaction will recognize the significance of the company name. On closing day, the parties and their lawyers gather in a boardroom. Dozens of file folders line the edges of the boardroom table. Each folder contains documents that finalize a specific aspect of the transaction. The parties circle the table and sign documents by hand. It can be a wonderful moment following a long, arduous transaction. But for those who have been through a big deal, the sight of all those folders lined up along the table underscores the complexity of a closing.

It can take hundreds of hours to draft all those documents and it can take dozens more hours to get the right documents in the right folders and assemble them into those neat little rows. And since the documents go through multiple revisions and emerge from a variety of sources, it’s incredibly easy to lose the final version of the document that needs to make the table.

Closing Folders keeps track of it all. The documents are stored in the cloud, which all lawyers working on the deal can simultaneously access in real time. The system keeps all relevant documents packaged together. It also automates a lot of the mundane, mechanical tasks that are based more on elbow grease than legal judgment, such as eyeballing two documents to identify modifications and mark them with black lines.

“When we visit some of our most active users, they have Closing Folders active on their desktops and they’re consulting it all day,” Cassie says. “So we’re excited about making this as fundamental to the practice of business law as Microsoft Word.” Zaman and Cassie are applying their own Bay Street experience to the Closing Folders mission.

Zaman articled with Baker & McKenzie in Toronto. Cassie articled at boutique corporate law shop Wildeboer Dellelce, and stayed on a further year as an associate. They quit day-to-day practice in 2013 to launch the company.

To bring Closing Folders together, they set up shop in Ryerson University’s Digital Media Zone (DMZ), an incubator for business ideas located in a small office tower adjacent to Yonge and Dundas Square in Toronto.

Chris Bentley, who practised law in London, then later served as Attorney General for the Government of Ontario, Closing the Deal Two recent Western Law grads create a successful digital start-up to tackle a paper headache now works as a director of Ryerson’s Law Practice program. Bentley was present when the two Western grads made their pitch to move into the DMZ. He was impressed.

“They were well on their way by that stage,” Bentley says. “It was apparent that they had thought this through, knew some of the technical and professional challenges and had strategies to meet them.”

Closing Folders has since moved to its own office, a rented space in the back corner of a Toronto communications firm. There are just five employees, but the company is growing fast. Revenue comes from lawyers and firms who pay an “all you can eat” monthly charge to access the service. If a firm isn’t a Closing Folders customer, but is working on a deal with another firm that is, temporary access can be arranged. Zaman says it works well.

“Building a functioning business has been exhilarating,” Zaman says. “We have employees. We have clients. We’re cash-flow positive. Our growth rate is about 20 per cent, month on month, so it’s compounding fast.”

At least three of Canada’s 10 biggest law firms are now clients. The company has also had success in signing up some in-house legal departments, too. Ottawa-based Shopify Inc. used Closing Folders for its highly successful 2015 initial public offering.

When we visit some of our most active users, they have Closing Folders active on their desktops and they’re consulting it all day. So we’re excited about making this as fundamental to the practice of business law as Microsoft Word. - Gordon Cassie

In a testimonial on the Closing Folders website, Erin Zipes, assistant general counsel with Shopify, says the software helped smooth out the IPO. “A boardroom full of paper documents was just not our style,” she says. “We were also very happy with the closing books process – it was painless and we had them right away.”

Zaman and Cassie credit Western Law with a lot more than just bringing them together in that first-year small group. When they started making cold calls to market the product in 2013, Cassie says their Western law degrees opened a lot of doors. “The alumni are always interested in what we’re doing,” he says. “I think they had a good experience at school and they really want to help other students who went there.”

Current Western Law students are about to see how it all works for themselves. Closing Folders is donating software licences to Western Law so students in business law transaction courses, such as Mergers and Acquisitions and Art of the Deal, can get a hands-on feel.

“Western Law’s students will gain phenomenal experience using this software for closing business law transactions that will set them up well for their future careers. This is further support for our leading business law program,” says Iain Scott, Dean of Western Law.

And maybe, just maybe, it means future young deal lawyers will be able to sleep a little bit easier.

This article appeared in the Western Law 2016 Alumni Magazine.
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