Are Legal Service Start-Ups Redefining What Lawyers Do?
For a glimpse into a fascinating sector of the economy known to few outside the Silicon Valley, take a look at angelList.co. The site, which links technology start-ups with investors, was first discovered here after review of an ABA Journal article by Susanna Ray on legal service start-ups.
This is an interesting story and highlights what the ABA Journal calls “a paradigm shift in how law is being practiced.” Ray reports that the rise in legal service competing with traditional law firms for parts of the legal dollar “is redefining what lawyers do … by whittling away at the inefficiencies in the industry.” Examples offered include Modria (“the world’s leading online dispute resolution experts”), LawPivot (crowd-sourced legal advice for businesses), Fixed (“easily dispute parking tickets”), Ravel (showing relationships and trends among cases in a way that improves upon WESTLAW treatment in many respects), and others.
Awareness of this is growing among investors, if not among lawyers generally. In 2012, $66 million was invested in legal start-ups. In 2013, investments totaled roughly $458 million, according to Tech Cocktail, a media company covering start-ups. Ray believes that this “suggests a trend that’s here to stay and likely to lead to good results.” Investments statistics back that up. In addition, angelList.co presently lists 509 legal start-ups having a $4.3 million average valuation.
These are compelling statistics, though consumers and providers of legal services alike would do well to remember that it’s not just the content but the delivery. In the case of law and legal services, effective delivery depends on qualities that a good local lawyer is best suited to offer: integrity, intuition, experience, and knowledge of the local terrain. In short, serving clients involves more than “efficiency.”
If you are considering becoming an investor, check out angelList’s Investing Guidelines on start-ups. Guideline Number One: “Startups are very risky investments. Expect to lose your money. And don’t invest more than you’re comfortable losing.”