Esquire Financial Holdings, holding company for professional and legal services-facing Esquire Bank, this week announced a $2.5 million investment and nearly 5 percent ownership interest in law firm management software Litify. The two companies have executed a marketing and exclusive development agreement to develop automation tools and financial applications for law firms, including a real-time asset-based lending application for commercial law firms.

Esquire Bank CEO and president Andrew Sagliocca explained that Esquire Bank's work with law firms means they have to read a firm's current and existing caseload the way other banks might look at accounts receivable to set financing rates. Small firms tend to keep case information in Microsoft Excel, while slightly larger firms may use database program Access or an internal system to manage cases. “It's a cumbersome process. It's static by nature and it may not be as accurate and complete as you want it to be,” he said.

Litify founder Reuven Moskowitz, who also serves as COO of plaintiff's firm Morgan & Morgan, launched Litify as a way to link Morgan & Morgan's intake and matter operations up to Salesforce, a popular customer relationship management (CRM) platform. Moskowitz and firm co-founder John Morgan launched the system as a stand-alone product in 2016.

Moskowitz and Sagliocca began exploring opportunities for collaborate for the last couple years. Sagliocca said partnering with Litify can give the bank opportunities for technology development that the bank would be unlikely to develop well in-house. “The bank coupling its finance production with technology I would not want to develop, nor could I develop at the bank, seems to be a very smart move,” he said. Banks, Sagliocca added, are “not good at developing technology.”

While law firms are increasingly partnering with technology groups to sell products to financial services groups, the converse is not often true. Moskowitz noted that Esquire Bank and Litify can make their strategy work because of their shared focus on the legal space. “We're both specialized. We're both really focused on this industry together,” he said.

Moskowitz explained that Litify's broad-based approach to legal technology is intentional. “There are a lot of apps out there really focused on single functions—a function to handle intake, a function to handle docs,” he explained. “Because they're disparate, it doesn't allow firms a significant view of what's going on.”

Litify intends to operate as a complete system as a way to bolster transparency to firm leaders. Sagliocca is hoping specifically that the partnership can give firm leaders a better sense of their financial investments.

“The ability for the partners to not just understand their cases but the value in their cases, and what they're investing in those cases in the upfront cost, and understand the efficiency and effectiveness of their firm and their staff and where their value lies, I think is critical,” Sagliocca said.