‘A Disruptive Innovation Is A Technologically Simple Innovation In The Form Of A Product, Service, Or Business Model That Takes Root In A Tier Of The Market That Is Unattractive To The Established Leaders In An Industry.’ (Clayton Christensen, Disruptive Innovation.)
Startups and the legal industry is ripe for disruptive innovation. At the moment legal practitioners, AKA solicitors or barristers, are engaged in practicing a broad range of areas of law.
However, because law has one of the lowest levels of technology investment, in comparison to many industries, the cost of legal work is often unaffordable for new businesses and lower income individuals.
Expensive fees are just one major reason why businesses avoid lawyers as indicated in this article by Scott Walker. So there is no doubt that this is an area that needs addressing, and for startups and the legal industry, we’re seeing some big changes happening.
Some top-tier law firms are even averse to new technologies that could make their work faster and more efficient, because they bill by the hour. However, we’re beginning to now see how startups and the legal industry are in for a disruptive awakening.
Why Disruption Is Needed For Startups And The Legal Industry
Freelancers: Startups And The Legal Industry
Over the last 40 years, the freelance workforce has increased to 4.6 million, a high for that time frame. The traditional legal industry is under threat from this new breed of lawyer. And startups and the legal industry have played a big role in creating this shift.
Technology has allowed solicitors to work remotely, within or outside a virtual law firm, allowing for legal talent to work independently. This growing legal decentralisation has made the industry more competitive, and thus in the future, more receptive to tech innovation. The changes technology is set to bring on the legal landscape has been well covered in this article by Blair Janis.
This where startups and the legal industry are going to be inextricably linked moving forward.
The Millennial Mindset: Startups And The Legal Industry
Millennials who are entering the workforce want a work-life balance and flexibility in work, according to an Ernst & Young study. The new generation of lawyers will lead the integration of technology into their firms to spend more time on themselves.
Maybe it’s a perk for them and their firms. Only time will tell but what we do know is that startups and the legal industry will be prime opportunities for millennials seeking a different kind of work/life balance in line with their own priorities.
Clients Demanding Innovation: Startups And The Legal Industry
As technology continues to become integrated into the legal landscape, clients will want more transparency. Once artificial intelligence (AI) and machine learning become part of the legal vocabulary, in terms of streamlining repetitive form-based legal tasks, clients will come to expect it from every single legal provider.
[tweet_dis_img][/tweet_dis_img] There is no downplaying how important startups and the legal industry are for this area.
Recent Trends: Startups And The Legal Industry
In 2016, legal technology changed the legal landscape in two ways:
Time management and billing and E-Discovery (using technology to search for supporting evidence in cases, if the volume of data is impossible for a human to handle). The legal tech businesses that follow have been divided into technological areas that hold the most promise for successfully transforming the legal industry.
This demonstrates how startups and the legal industry are changing the legal landscape in a big way.
E – Discovery
This sector of legaltech refers to any tech process that allows for efficient analysis of data used as evidence in cases. The startups that follow are primarily building digital tools to enhance that process.
kCura and its Relativity e-discovery ecosystem:
Creator: Andrew Sieja.
Investment Raised: $125 million.
Profile: Sieja quickly saw the need for an easy-to-use document review application to help corporations, law firms, and government departments solve the problems associated with reviewing large amounts of data.
Recently developing a partnership with Microsoft, kCura has developed a cloud-based product which comprehensively searches, analyses, and acts on electronic evidence. kCura states that it is used by 200 international law firms and 73 Fortune 100 companies.
kCura has won numerous awards including CIO Review’s – 20 Most Promising Legal Technology Solutions and Best End-to-End e-Discovery Provider.
Creator: Andy Wilson, Sheng Yeng.
Investment Raised: $14 million.
Profile: The leading provider of legal intelligence solutions, it provides a cloud-based platform to the US government, Fortune 500 and AM Law 200. Users utilise the technology to effectively respond to large data challenges associated with due diligence, internal investigations, subpoena response, and claims processing.
Although designed with lawyers in mind, Logikcull has been applied to various other industries. For instance, a HR business could use it to sift through the thousands of documents typically involved in internal investigations.
Online Legal Services
This sector of legaltech refers to any technology that provides a range of online legal services to consumers and businesses. Startups and the legal industry are seeing some big players emerging in the online legal services field.
Creator: Alexandra Isenegger.
Investment Raised: Undisclosed.
Profile: Linkilaw is a legal marketplace that provides businesses and individuals with fixed quotes from pre-vetted lawyers. It utilises technology to make the law accessible, transparent, and streamlined, reducing costs and waiting time in the process.
Creator: Daniel Van Binsbergen.
Investment Raised: $1.7 million.
Profile: Lexoo is a marketplace where individuals are able to compare and hire talented and forward-thinking solicitors, all pre-screened and vetted by Lexoo.
If you are looking for a UK lawyer for your business, you can use Lexoo to get multiple quotes from specialised lawyers, all hand-picked by Lexoo management. It does the vetting for you so you will only receive quotes from lawyers that are right for your job.
Creator: Andy Wilson, Sheng Yeng.
Investment Raised: $300 million.
Profile: LegalZoom is the USA’s most-recognised name in law. It is the leading provider of online legal document services and legal plans to families and small businesses. LegalZoom offers high quality, affordable legal services, marrying cutting-edge technology with access to experienced attorneys.
The high quality documents have been accepted in all 50 states, and 94% of customers say they would refer LegalZoom to their family and friends.
Legal Intellectual Property Management Software
This sector of legal tech refers to any technology businesses that have built software to simplify the search, disclosure, and application process associated with intellectual property (IP). The biggest movers for startups and the legal industry in this this area are featured below.
Creator: Peter Ackerman, Shawn Pilkington.
Investment Raised: $3.9 million.
Profile: Decipher is an ecosystem of tools meant for accelerating innovation, protecting your business’s IP, and leveraging your intellectual assets. Decipher software automates workflow, improves collaboration capabilities, disclosure review processes, streamlines the creation of a business’s IP inventory, allows you to manage any type of IP asset remotely, as well as estimated costs for applying and obtaining IP.
Creator: Mikael Kolehmainen, Matti Kokkola, Anna Ronkainen.
Investment Raised: $3.5 million.
Profile: Offering a machine-learning, intelligent, web-based trademark management platform which is used by enterprise businesses, law firms, and branding agencies for an instant trademark search and results.
This sector of the legaltech industry provides businesses with real-time billing, time and contract management tools to the legal industry. The biggest movers for startups and the legal industry for this sector are featured below.
Creator: Jack Newton, Rian Gauvreau.
Investment Raised: $27 Million.
Profile: Developed by Themis Solutions, Clio provides practice management software for small-and-mid-sized law firms. It provides a suite to help with the day-to-day management, and because it is web-based, it allows for remote firm management.
Creator: Ariene Adams.
Investment Raised: $15 million.
Profile: Peppermint Technology’s platform is built on Microsoft Dynamics CRM 2011 and includes applications, collaboration, content and transactions. This has allowed Peppermint Technology to provide a hyper-personalised, instant, and consistent experience for clients across all channels that can be accessed remotely.
By embracing new technology, this business has allowed for the transformation of the traditional client experience a customer has when being dealt with by a law firm.
Creator: Ori Tamuz, David Bitton
Investment Raised: Not Disclosed.
Profile: Both founders spent time in typical law firms and found that there were several problems with billing, getting clients to pay, tracking billable hours, responding to complaints, and even the amount of time lawyers spent at their respective firms.
In response, they developed a management software and continually ask lawyers what Practice Panther should be doing to update and improve their software.
This sector of startups and the legal industry uses technology that allows third parties to provide financial resources to enable costly litigation or arbitration cases to move forward. The financier is rewarded a portion of the potential settlement after the case closes.
Creator: Jay Greenberg, Max Volsky.
Investment Raised: Undisclosed amount.
Profile: LexShares is a crowdfunding platform that enables individuals to invest in litigation. The platform connects accredited investors with plaintiffs in commercial lawsuits in order to make an equity investment in a specific case.
Creator: Joshua Schwadron, Dylan Beynon.
Investment Raised: $5.25million.
Profile: Mighty connects plaintiffs awaiting a fair legal settlement with the financing they need to continue living their lives. Mighty is a new kind of platform that empowers plaintiffs to get a better deal from the justice system.
Plaintiffs get financing today for a portion of their future settlement, so they can pay for rent, medical bills, and other essential living expenses.
This section includes a variety of online research companies catered to the legal industry. Big movers for startups and the legal industry in this area are featured below.
Creator: Daniel Lewis, Nick Reed.
Investment Raised: $9.2 million.
Profile: Ravel Law is focused on making legal research easier, faster, and more intuitive. The company’s goal is to be a first stop for case research, giving users tools to quickly identify the most relevant and important cases, understand how they should be interpreted, and collaborate with peers.
Creator: Itai Gurari, Adam Hahn, Blake Masters.
Investment Raised: $7.8 million.
Profile: Judicata has proclaimed that it is mapping the ‘legal genome’. What does this even mean? Well…it is using algorithms to turn unstructured court judgements and opinions into data that can be easily analysed.
Creator: Lluís Faus, Angel Faus.
Investment Raised: $5.16 million.
Profile: vLex is a legal research platform that offers legal content and solutions. Its clients include: ProQuest, Gale Cengage Learning, the United Nations Publications, the World Bank Publications, the Commonwealth Secretariat, Oxford University Press, and more than 940 independent publishers worldwide.
To begin with, vLex offered free legal information but today has more than 80 million pages of content from more than 130 countries with accords from more than 1,000 publishing houses.
Artificial Intelligence Software
Artificial Intelligence legal tech – Companies here use AI to summarise legal documents, legal arguments/ cases, automation, and compliance. This is one of the most exciting changes we’re seeing for startups and the legal industry.
Creator: Kevin Miller, Elliot Williams, Lars Mahler.
Investment Raised: $2.75 million.
Profile: LegalSifter helps users to better understand legal documents by helping them summarise, sort, and search legal information quickly and efficiently. Legal Sifter have accomplished this by building easy-to-understand and affordable AI products to aid their customers in managing their legal work, obligations and opportunities. They use machine learning to turn unstructured terms, conditions, and words into structured data and insights.
Creator: Toby Unwin, Guy Kurlundski.
Investment Raised: $ 5 million.
Profile: Utilising AI, Premonition has been able to build a network of lawyers. In comparison to just being told a lawyer is good, Premonition has ranked lawyers based on objective criteria i.e. which lawyers win before certain judges.
Creator: Andrew Arruda.
Investment Raised: Undisclosed.
Profile: Ross aims to ‘supercharge lawyers with artificial intelligence.’ In short through using AI they want to help lawyers streamline their legal research, delivering greater value to their clients to therefore save time that is often unbilled.
Creator: Dan Rubins, Megan Satterfield-Smith.
Investment Raised: Undisclosed.
Profile: Legal Robot uses AI to make legal documents less painful for everyone and improve Access to Justice. Consumers can use the iOS or the Android app to understand legal language. Businesses can expedite their sales and procurement pipelines, leaving lawyers to accomplish more complex work.
Creator: Cian O’Sullivan, Bogdan Ivanov, Iulius Curt
Investment Raised: Undisclosed.
Profile: Beagle utilises AI to review contracts and highlight key information. By providing immediate understanding, it allows for work to be completed effectively. Beagle also incorporates collaboration tools to allow both internal and external stakeholders to negotiate in real time.
Final Words: On Startups And The Legal Industry
The future is looking exciting and bright for startups and the legal industry. And the startups we’ve covered in the blog post are at the forefront of these changes to the global legal landscape.
Are you interested in startups and the legal industry? Are you looking to create a startup that could shake up the legal landscape?
We think that startups and the legal industry are exciting. But, if you want to create a startup in the legal sphere you need to give yourself a solid legal foundation. You can find out how by booking a free Startup Legal Session.
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