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The growing pains of Peppermint Technology

Added on the 22nd Feb 2017 at 2:00 pm
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The departure of Peppermint Technology’s short-lived chief sales and marketing officer Kaye Sycamore in February opened a vitriolic can of worms, with many Legal IT Insider readers quick to accuse the UK-based practice management system provider of failing to deliver on its promises to the market.

Sycamore, who joined Peppermint in 2016, returns to Intapp, where she will again have a global sales role. Her departure follows the resignation of Peppermint’s director of business development David Thorpe, who joined slicedbread in July 2016. In a further loss for Peppermint, Thorpe was joined at slicedbread in January by implementation consultant Jamie Hardie.

Based on the business application development platform Microsoft Dynamics 365 (formerly Dynamics CRM), Peppermint launched in 2010 to provide a client-centric cloud-based one-stop-shop for legal case management, practice management, document management, accounting, business intelligence and reporting. By its nature unlikely to make many friends among traditional legal suppliers, Peppermint’s oft-repeated and inevitably unpopular USP is that its customers benefit from the £2bn of investment injected by Microsoft – a sum that bespoke legal providers cannot hope to compete with.

Clearly Scottish Equity Partners is drinking the Peppermint cool aid, and in December 2015 the leading venture capital firm invested over £10m to accelerate Peppermint’s growth. We can reveal that Scottish Equity invested a further, undisclosed sum in Peppermint in December 2016 to bolster support.

However, for many firms the transition to Peppermint’s platform has been plagued with difficulties – Blake Morgan is still not live over three years after signing up – while new business announcements from Peppermint have dropped off, leaving many to question, is Peppermint living up to its own press?

Live a live oh?

Of Peppermint’s 40 clients, 28 are live and 23 of those are live in the cloud. According to Arlene Adams, CEO and founder of Peppermint, the average implementation period for a case heavy firm is between 12 months and two years, although well managed 16-partner Newcastle firm Square One Law notably went live seven months after signature.

Firms that signed well beyond two years ago that have yet to go live include Blake Morgan, Wilson Solicitors and B P Collins. Others that have gone live but are understood to have suffered significant difficulties in the aftermath include Clapham & Collinge in Norwich. Cripps and Penningtons Manches both announced deals with Peppermint in July 2015, so remain within the two-year average window set out by Adams.

Taking a closer look at Blake Morgan, blame for the lengthy roll out of Peppermint undoubtedly falls on both sides. The Portsmouth headquartered firm signed up with Peppermint in November 2013 as Blake Lapthorn, merged in 2014 with Morgan Cole to create Blake Morgan, and merged again in May 2015 with Piper Smith Watton. Since signing it has undertaken a technology refresh and in June 2016 appointed Mike Wilson as its new managing partner, following the appointment of new IT head Jon Gould in May 2015.

Gould was brought in largely to deliver the Peppermint implementation and the past 12 months has seen a major push by the firm towards that goal after merger activity put the project on hold. Notably Peppermint’s founder herself Arlene Adams is the contract manager.

Since refocussing on the implementation, the main issue for Blake Morgan has been cleaning up its historical data and bringing it over into the new system. The firm has yet to begin user full acceptance testing (UAT) – although it is understood that it is finally drawing close and go live will take place 10 weeks after UAT begins.

As an early adopter, regardless of its own portion of the blame, Blake Morgan undoubtedly suffered from Peppermint’s inexperience. Adams, in a candid interview with Legal IT Insider volunteered: “We are small and learning and investing heavily in scale – we don’t have all the answers from the outset.”

For firms with different finance, CRM and document management systems (which is many of them), moving to Peppermint is more complex than swapping out one for another and firms have to rewrite all their processes into Peppermint. One IT director with experience of rolling the platform out said: “Peppermint want to take over the whole world in one fell swoop so compared with Elite or Aderant, it’s much more complicated but if you can make it work the payoff is fantastic.”

Law firms can also be slow to embrace change management around the way their people work.

Peppermint, which recently signed its first CRM-only client, has responded by breaking down the conversion process and Adams says: “Customers are asking if they can have a more modular approach,” adding “We’ve learned loads and refined that into the implementation process.

“We are learning and asking how we can give customers the end goal – for some it’s a big bang but for others the journey is more modular.”

Live but oh no

For Peppermint adopters that have gone live, the early days issues reported range from credit control that is not properly adapted for legal, a “diabolical” conveyancing workflow, and a support team that are difficult to work with. One IT head commented: “I’ve worked in legal for a long time and from my perspective there were lots of bits of Peppermint where it seemed they didn’t know law firms well.”

There are clear improvements, particularly with the major software upgrade in November 2016 that saw Peppermint’s cloud solution rebranded as Peppermint CX.

One IT head told Legal IT Insider: “The customer experience is a lot better now.”

Adams told Legal IT Insider: “In our last two releases, 75% of our product development have been customer needs driven.”

Adams readily concedes that until Peppermint had been properly road tested with a number of live clients it had gaps but says: “We’ve got our finance product for our size of the market into a really strong market leading product. In the early days, we had functionality missing but we are working with very forward thinking customers that have contributed to closing the gap.”

She adds: “We put a disproportionate amount of time into our design stage working with customers. Our clients are by nature very hungry and some of the most demanding in the market but if they are willing to work with and embrace Peppermint we end up with a really good product.”

The company is also investing heavily in its cloud infrastructure and since awarding Pulsant (described by Adams as the “Rolls Royce” of private cloud) a multi-year contract to host the Peppermint shared cloud platform (now rebranded as CX cloud platform) at the start of 2016, performance is said by one client to have been much more stable.

Adams quite fairly observes: “We are on our second-generation cloud when most providers haven’t got to the first generation. The fact is we exceeded 99.9% cloud uptime in 2016, which is a reflection of all the investment we’ve made in Pulsant.”

New business?

As with any small business, the financial well-being of Peppermint is going to play heavily on the minds of its clients and one IT head said: “It’s a constant concern of ours how they are doing.”

Adams says Peppermint has stopped shouting about every new win but that new business is good – wins in the public domain in the last two months include high profile ABS Invicta Law, while Peppermint has signed two more firms (the names have been given to Insider on the condition they remain unpublished) – a top 200 law firm of around 200 users and a further UK firm of 100 seats.

In total in the past year Adams says 14 new firms have signed up – a figure echoed independently by outgoing Sycamore.

Peppermint is seeing significant interest from customers of Thomson Reuters Elite Envision, which has built in document management capability, and Adams said: “Looking at the market ahead, there are a lot of end-of-life products, which is why we are on a fast growth trajectory.

Peppermint is currently loss making but Adams says will make a profit “in the next 12 months.” She adds: “We invest ahead of the curve. Scottish Equity is a growth equity investor and our priority is not about turning profit but growth. We don’t want to make huge losses but our objective is to break even. We are a small, fast tech company and our shareholders are not in it for an immediate return.”

Scottish Equity’s initial cash injection in December 2015 did not all get pumped in to the business but went towards paying out co-founder and majority shareholder Peter O’Hara, who remains an investor but not a director.

In terms of the further injection of cash by Scottish Equity in December 2016, Adams says it was part of Peppermint’s growth plan and its roadmap, dependant on the company meeting key objectives and criteria.

Adams adds: “If Scottish Equity were concerned they wouldn’t have invested further. They do huge amounts of due diligence at the time of any investment, including when they put in more investment, and they are very clear that they got it right.”

Peppermint is notably using that extra investment to bolster its support structure and has been heavily investing in its partner network (an announcement is to come in this area). Adams says: “We’re reaching critical mass not only of our own staff but our partners in the market.”

She adds: “By the nature of cloud, our revenue is largely annuity and we are building a nice strong revenue model underpinning a healthy business, which is why we can continue to invest.”

Happy customers

Peppermint is no longer a fledgling and is at the stage where it needs to shout about its success stories from the rafters.

Innovative Sussex and Kent law firm asb law is one of those success stories and, according to Nick Lakhani, finance director at asb law, Peppermint has good project governance, engagement from all parts of the business and senior management buy-in. Ease of use thanks to staff familiarity with the Microsoft environment is not to be underestimated, and Lakhani adds: “Using the strong foundation of Microsoft Dynamics, the platform brings together in one place all the applications, transactions, collaboration and content tools required to operate a high performing, client-centric law firm.”

Having had an initially bumpy ride in rolling out Peppermint, South East and Midlands legal services provider Brethertons has been used as a case study for Peppermint, which is at the heart of Brethertons extensive transformation plan.

The top 200 law firm in 2015 hired non-lawyer partner Sally Jones as deputy CEO and chief operating officer to lead that transformation programme. If you haven’t read Peppermint’s Brethertons case study, we recommend you do. It’s a candid look at how the firm, led by Sally, overhauled its management structure, created new operating processes, designed a new staff career roadmap and turned around the Peppermint implementation so that the firm is now reaping the benefits of its single platform, client-centric architecture. The case study can be accessed here: www.pepperminttechnology.co.uk/case-studies/ brethertons-solicitors

Time to grow up – The legal market, as those who have had the pleasure of having been immersed in it for many years know only too well, is as incestuous and change-averse as they come.

Adams is quite right to point out that Peppermint, the newcomer, the potential threat, is under the microscope in a way that its competitors are not. LexisOne, based on the Microsoft Dynamics AX platform, has had limited visibility in terms of its successes but to an extent has the luxury of legal giant LexisNexis as a parent.

“Peppermint is the only really new innovator in this core business application space in 25 years and for the market it’s time we start celebrating innovation rather than trying to kill it or will be left with old technology,” Adams said.

From a client perspective, Peppermint, which is nearly seven years old, needs to turn its steep learning curve into stable, sustainable results.

One suspects that some of that will come from a better understanding of how to communicate with law firms and explain what is required in terms they understand, so that there are no surprises on either side. Lawyers are not good at delivering IT projects and must bring in the right people and set realistic goals and expectations. It is notable that Square One used IT consultant Heidi Simpson, managing director of Purlow Consulting and a former Peppermint regional sales manager, who was given carte blanche to plan and navigate a full migration.

From a market branding perspective, Peppermint could do worse than to build bridges with its competitors, who typically have a healthy respect for one another having rubbed shoulders at far too many post-conference drinks. Portraying itself as David versus Goliath is unlikely to silence the detractors – just sayin’.

Beyond that, Peppermint needs to be conscious of avoiding spin and share hard facts surrounding its successes. In short, it’s time to grow up.

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