Neil Watson* While lawyers are notoriously risk-averse, a number of legal entrepreneurs and non-lawyer entrepreneurs like Mark Cuban are changing the face of the law.
Cuban announced this week that he would make an undisclosed investment in an ‘access to justice’ company called Paladin, partnering with legal giant Dentons, the world’s largest law firm by head count.
The variety of legal innovations being developed continues to grow at a staggering extent, be it handling parking tickets or providing sophisticated legal help. The techlaw or legal tech companies are close to raising $1 billion in investment in 2018, compared to the 2017 figure of just $233 million.
The development of AI in particular has seen a 65 per cent in the previous year in the United States, with legal AI investment in 2018 In particular reaching $355 million.
The new tech-driven legal enterprise Mark Cuban has invested into is designed to locate pro bono projects on auto-pilot, following a recent report that found that 86 percent of civil legal problems among low-income Americans fail to achieve adequate legal redress.
Paladin was founded by two young women lawyers, Felicity Conrad and Kristen Sonday (pictured above), one being a former Skadden Arps Associate and the other a former Justice Department lawyer working to extradite fugitives from Mexico.
New York-based Padadin is an SaaS legal tech business that not only permits lawyers to sign up pro bono opportunities, but also tracks their work and stories, permitting legal departments to see a return on investment for the legal time donated to the cause
The development of ‘legal tech’ companies has been lead by many legal entrepeneurs who are using artificial intelligence to deliver faster and more efficient legal services.
High Profile Legal Tech Investors
A number of major investments from high profile investors has raised the profile of legaltech investments, with some major startups occurring not only in Silicon Valley, but in the UK, Australia and other jurisdictions where the barriers to legal services are being broken down by new technology and capital.
Endorsement from high-profile investors is causing waves in an industry that has previously shunned the limelight, and innovation. This attitude has helped propagate inefficient and costly ways of working. Suddenly, lawyers are watching legal tech companies raise investment like the leading startups of Silicon Valley.
Co-founder of the livestreaming Twitch service Justin Kan has recently invested in Atrium, which uses lawyers, engineers and others to provide legal requirements to startup companies in an efficient way. As Atrium says: to make deals “price predictable”.
The idea was to break barriers and get legal deals done faster, as he told Forbes: “This was a problem I’d seen in my own experiences, where all these parts around legal were like a blocker to what I wanted to do, and the legal bills felt like Russian roulette. It’s almost like a tax you have as a business owner. That’s why I wanted to attack this problem.”
Billionaire Mike Lynch, described as Britain’s Bill Gates by The Sunday Times, sold his big data company, Autonomy, to HP for $11.7 billion (£8.7 billion) and is focused on new tech investments, including Luminance, a legal startup designed to help law firms with their due diligence for M&A work.
He described AI as being like seeing a steam engine for the first time and the beginning of a new age in the development of the law.
UK Dragons Den star and investor James Caan invested in UK solicitors Knights who have developed under the British “Tesco law” reforms with this year’s £100m stock market float this year.
Although he has now sold the stake in the firm, it was a profitable venture which saw the law firm grow its turnover from £8m to £40m and has joined the growing group of UK law firms that have gone public under the so-called Tesco reforms. Caan is believed to remain interested in law tech businesses, along with other high profile UK investors.
Possibly the highest profile law tech investors is Kobe Bryant, the retired NBA player has made a number of strategic tech investments, including in LegalZoom.
LegalZoom.com Inc. announced in June that it had completed a $500 million financing round from Bryant’s fund and two others, its second since the firm’s founding in 2001 which has valued the company at around $2 billion.
Kobe Bryant has a $100 million venture vehicle for investing in technology, media and data companies, including a group of companies like LegalZoom which he has invested in along with longtime investor and entrepreneur Jeff Stibel.
The continued development of legal tech investments is clearly picking up the pace and both celebrity and other investors of lesser-known status will continue the trend towards increasing legal tech’s continued growth.
Neil Watson is a technology and legal services writer & LawFuel contributor.