Legaltech New York Startups Showcase a Diverse Crowd with Some Common Themes

February 16, 2016 - David Curle

Legaltech New York is one of the world’s largest events devoted to legal technology, but it has traditionally been dominated by the eDiscovery vendors and practitioners. In an attempt to widen the conference’s focus, conference organizer ALM has partnered with CodeX, Stanford University’s Center for Legal Informatics, to help enliven the event with some of the new technologies and new business models that are represented among the legal tech startups that are in the CodeX orbit. For the second year in a row, Legaltech conference organizer ALM invited CodeX center to host a pavilion of newer legal tech startups on the exhibit floor at the big Legaltech conference in New York.

The CodeX invitees also participated in two rounds of a “shark tank”-like set of quick presentations followed by question from a panel of judges and experts. Due to the friendliness and collegiality on display, this was quickly re-dubbed the “dolphin tank,” and the event proceeded without too much naked competition or aggression.

The judges, who offered feedback on both the presentations and on the underlying businesses, were:

I think it’s fair to say that these two shark tank rounds, spread out over two sessions on the last day of Legaltech, were a good antidote to the typically dry conference sessions that tend to focus on eDiscovery and the nuts and bolts of IT implementation in law firms and in-house legal departments.

To be fair, the regular conference sessions do the heavy lifting – lots of practitioners try to find and share the best practices around integration of technology in their work. But those sessions are grounded in the way law is practiced in real life today; the startups are free to wander off from the established legal industry and are coming up with all kinds of new stuff, much of which is novel and exciting to many of the traditional practitioners in attendance.

That said, however, it’s also fair to say that the leaders of the 10 companies represented here had widely different styles and levels of skill in presenting their businesses in short five minute presentations. A few made their businesses sound more exciting than they really are; a few accomplished the opposite, not really eliciting the excitement that perhaps they should.

So what are these companies up to? I think it’s useful to group them together in a few clusters, although some were just a cluster of one. The companies represented a pretty diverse group in terms of who they serve, what technologies they are applying, and the extent to which they are coming up with new products and services entirely versus attempting to replace existing parts of the industry.

Legal Marketplaces and Delivery Platforms

This is a crowded space, as entrepreneurs look at online markets in other parts of our consumer and business world – think Yelp, Uber, Airbnb, etc. Richard Granat has an overview of some of the many players in his article The Uberization of Legal Services from his eLawyering Blog.

It’s also fair to say that this is a very diverse space, with some platforms targeting consumers, others lawyers; some focusing on low-cost answers to quick legal questions and others providing a platform for longer, more involved legal representation. The three on display here represent some of that diversity:

Of these three models, Hire an Esquire has the advantage of going after a large existing quantity of legal spending. Legal.io’s end client targets have no money; the market here is the cash-strapped government and nonprofit services that serve the poor. Frag-Einen-Anwalt.de is going after the pocketbooks of ordinary consumers, but with traditional lawyers and their traditional lawyer expectations of income. Expect to see a lot of development in legal marketplaces of all kinds, but this is one space where you can also expect to see a lot of churn.

Contract Management and Analytics

Another area that is red-hot these days is technologies related to drafting, analyzing, automating or analyzing contracts. Contracts data is a perfect storm: agreements are unstructured data yet with a sort of structure or internal logic that can be analyzed; they are everywhere, in both B2B and B2C environments; they can be high-stakes, containing as they do both risks and protections for parties. It’s no wonder that there are many tech companies working on various aspects of contracts.

Here again, there is a lot of diversity of these companies, but they are all dealing with the same data: contracts. These four are only the tip of the iceberg of the extensive work that is going on in this space today by dozens of companies. At the very least, these presentations reaffirmed the sense that contracts practice and management is going to be radically transformed by technology in the next few years.

IP Search and Analytics

Legal Research

Alternative Dispute Resolution

None of these startups is entirely unique, and none of them, certainly, is guaranteed success. But they are all working on some of the key problems in legal services that technology can help to address. Some operate on the fringes of legal practice today, building business in latent markets that are not well served at all by the existing legal infrastructure or service providers. Others on the other hand, represent alternatives or improvements to existing practices or workflows that are now carried out by today’s lawyers, often with low-tech solutions. Together, these and the many other legal tech startups out there are functioning as the legal services industry’s R&D department, testing new approaches and business models for delivering legal services.

This post was written by David Curle, director, Market Intelligence with Thomson Reuters.