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Justin Kan Raises $10M for New Legal Startup

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Re: Justin Kan Raises $10M for New Legal Startup

#51

Post by pnmahoney »

rayiner wrote: post #46
pnmahoney wrote: post #43

Earlier quoted context omitted.

I can vouch for the fact that legal technology as a category does not address the needs of lawyers. And which is obvious to most practicing attorneys. As an example: > "spend less time [billing] on research" is not, and never will be, an effective value proposition; and which would be obvious to anyone in anything but the most niche putt-putt fields of practice. Rayiner is of course authority enough on this subject q…

> "spend less time [billing] on research" is not, and never will be, an effective value proposition; and which would be obvious to anyone in anything but the most niche putt-putt fields of practice. I'll note that for many cases these days, there is an incentive to enhance efficiency. Alternative fee arrangements, e.g. fixed monthly fee irrespective of hours, are getting more and more common, particularly with regard…

Really?? The move away from standard billing had always felt like it would "always be in the future"; but I take that back if that's now A Thing in lit heavy on case research. Still assuming that ^ research is better facilitated by pagerank+semantic centrality, as opposed to the boolean features that the attorneys who do the most motion drafting work are already most well-versed in. The most valuable usage I'd heard of this type of product (the adoption of which I'd had reasons to keep asking extensively around about) was from my pal in international arbitration whose colleague wanted to do a search across courts in one screen. So maybe that was it. ¯\_(ツ)_/¯

Re: Justin Kan Raises $10M for New Legal Startup

#52

Post by goeric »

As a startup founder who dealt with numerous legal things on the ops side, there's clearly room for a lot of improvement. While Clerky seems to focus on the startup's side of the problem, it seems like Justin is tackling the firm's side of the problem (that allows company's like Clerky to take their business). This is really interesting to me and I would definitely bet on anything Justin leads. Really excited to see where this goes.

Re: Justin Kan Raises $10M for New Legal Startup

#53

Post by programmarchy »

SmellTheGlove wrote: post #5

This is a good idea. I hope it gets traction (I'd love to work on this problem as well). As for why some of this isn't done yet: The legal profession is old school. If you want to know where your work is, you can ask for a status memo, and you'll get billed for the time it takes to write it. Or the phone call. Either way. In industries where the product is the billable hour, you'll find things get done the way they'v…

Isn't this just evidence that the old school is ripe for disruption?

If a startup like Atrium can streamline legal workflows, then new school firms don't need to bill for writing that status memo.

That should lower prices and attract more customers. Seems like a win/win.

Re: Justin Kan Raises $10M for New Legal Startup

#54

Post by PatentTroll »

dragonwriter wrote: post #47
pnmahoney wrote: post #43

Earlier quoted context omitted.

I can vouch for the fact that legal technology as a category does not address the needs of lawyers. And which is obvious to most practicing attorneys. As an example: > "spend less time [billing] on research" is not, and never will be, an effective value proposition; and which would be obvious to anyone in anything but the most niche putt-putt fields of practice. Rayiner is of course authority enough on this subject q…

> > "spend less time [billing] on research" > is not, and never will be, an effective value proposition It will be if it means you provide better value for the cost, attracting more and more valuable business. Or, if you can just deliver the same results at the same cost, with fewer associates and paralegals. Sure, the firm won't make more money, but everyone still in it will. And firms don't have interests, individu…

The legal services industry is not a free market. There, I said it. First, the value (i.e. "provide better value") is opaque. That's why the legal industry relies so much on the proxy of prestige, because it's really hard to know if you are getting good representation, and then it's even harder to know if the cost is "fair" or whatever. The pricing structure is obfuscated and hidden, comparison shopping is hindered by ethical conflicts, and the billing practices (the dreaded billable hour) are asinine. The industry relies much more on personal relationships and perceived prestige than "value for the cost." And the demand in many areas of law is inelastic, and supply is...well, it's complicated by the whole obsession with 'prestige' and student loan debt.

Basically, no, the normal rules DO NOT APPLY to the legal market. And being 'cheaper' is usually not a good thing for a lawyer when dealing with big corporate clients. Less expense translates to lower perceived prestige, something this industry is obsessed with.

And to your last suggestion, here's the problem. There leverage in the law firm model is billing more hours by more associates and staff. The way that a partner makes more money is to have more people working under him, classic pyramid structure. If you eliminate the associates, the partner makes less money. Now, you might say, why not then charge more for the partners time? Because it's way easier to charge 3x associates at a going rate than a single partner at a 2x rate. Because clients see that big scary hourly number at balk, say that some other law firm doesn't charge that much, and why are you worth that much an hour. It doesn't work, even if the same amount of work gets done at the same price. And, the only measure of "amount of work" that lawyers have is billable hours! So a client would see a higher rate for less work. They don't take kindly to it.

I'm not defending any of the above, I hope you realize. I am frustrated with the industry because there are soooo many gains to be had here. It's absolutely silly how backwards and inefficient most law firms are.

Re: Justin Kan Raises $10M for New Legal Startup

#55

Post by pnmahoney »

dragonwriter wrote: post #47
pnmahoney wrote: post #43

Earlier quoted context omitted.

I can vouch for the fact that legal technology as a category does not address the needs of lawyers. And which is obvious to most practicing attorneys. As an example: > "spend less time [billing] on research" is not, and never will be, an effective value proposition; and which would be obvious to anyone in anything but the most niche putt-putt fields of practice. Rayiner is of course authority enough on this subject q…

> > "spend less time [billing] on research" > is not, and never will be, an effective value proposition It will be if it means you provide better value for the cost, attracting more and more valuable business. Or, if you can just deliver the same results at the same cost, with fewer associates and paralegals. Sure, the firm won't make more money, but everyone still in it will. And firms don't have interests, individu…

Ah just saw this! So

You might be assuming something about what counts as valuable business from the perspective of the firm or practitioner (or partner) -- consider that 'we have an army of associates poring over every detail with a fine-toothed comb' was instituted by those very same people in pursuit of value, defined however -- but my assumptions from 3 years ago may have since been obsoleted as well.

Btw, a clarification about the nature of the research that's being purported to be being cut down on: it's not the type which is like "hey paralegal, go on lexis and get me all the cases in this motion" Which, yes, makes sense: it frees up more and higher-value hours for more time spent on the memo, etc. It's rather purported to automate the time otherwise spent finding, say, available expertise, seemingly contrary decisions, analogous circumstances, distinguishing principles articulated (or ideally by asking the first of ^, you can locate the second, match the third, and cite the fourth) etc.

And all of which, yea the more it were to occur, would deliver more value for all involved.

Re: Justin Kan Raises $10M for New Legal Startup

#56

Post by PatentTroll »

gnicholas wrote: post #34
dsfyu404ed wrote: post #30

Earlier quoted context omitted.

This article is written for a particular audience. The people selling it to law firms are going to pitch efficiency.

Yes, but the audience it's written for generally cares about questions like "what is the pain point you are solving for your customer?" That is one of the first questions a funder asks — and given how many funders they have lined up, presumably there is an answer. As for pitching law firms on efficiency, that's actually an uphill battle in many ways. Lawyers bill by the hour, which means that there is not a natural d…

And lawyers are still ethically expected (by many state bars) to measure and log hours worked, even under fixed fees. Same with contingency fees. So let's say that a client is paying a fixed fee for work, then discovers that it's now taking half the time to do the same work. They're going to demand a lowering of their fixed fee in proportion. So even under alternative fees, there's still an incentive to keep high "hours" on the bill

Re: Justin Kan Raises $10M for New Legal Startup

#57

Post by PatentTroll »

yannyu wrote: post #3

There actually is a lot of legal-industry-specific technology out there that most people have never heard of. It works well enough for what most lawyers and firms want, but it seems to have hit a local maxima for one major reason: nearly all the software and tools are written around Microsoft Word and the Office suite. Anyone wanting to disrupt the legal industry (in the US) is going to have to deal with MS Word in o…

I'm actually working on this! Would love to hear your thougts

Re: Justin Kan Raises $10M for New Legal Startup

#58

Post by PatentTroll »

programmarchy wrote: post #53
SmellTheGlove wrote: post #5

This is a good idea. I hope it gets traction (I'd love to work on this problem as well). As for why some of this isn't done yet: The legal profession is old school. If you want to know where your work is, you can ask for a status memo, and you'll get billed for the time it takes to write it. Or the phone call. Either way. In industries where the product is the billable hour, you'll find things get done the way they'v…

Isn't this just evidence that the old school is ripe for disruption? If a startup like Atrium can streamline legal workflows, then new school firms don't need to bill for writing that status memo. That should lower prices and attract more customers. Seems like a win/win.

Lowering prices on mid-top tier legal work won't attract more customers, demand is largely inelastic. And their customers, who are fortune X00 types, don't really care about the cost. Oh, sure, they bitch and moan about bills and write op eds about how law firms are terrible and the billable hour is bad. But, in the end, like OP says, companies routinely go back to the same crop of biglaw firms. There is no such thing as 'disruption' in this industry, it never has been disrupted.

Re: Justin Kan Raises $10M for New Legal Startup

#59

Post by joshuaheard »

maxxxxx wrote: post #39
joshuaheard wrote: post #8

I built a legal app years ago. One problem I had getting investors is that the legal market is so small. Microsoft dropped it as a vertical years ago. Corporate law is even a smaller segment of the legal industry. VC law is an even smaller segment of corporate law. How big is the market for this product? Edit: I see from their website they claim it is a "$96 billion industry". There are only 1.3 million active lawyer…

If each of the lawyers makes 100k per year you already have a $100 billion industry.

How much of that do they spend on software?

Re: Justin Kan Raises $10M for New Legal Startup

#60

Post by crypto5 »

pitt1980 wrote: post #22
arethuza wrote: post #19

Earlier quoted context omitted.

I'd love to have some kind of portal where you can actually track activity on your legal work and see billing as it happens. Of course, I can see why lawyers generally resist that kind of transparency...

reading between the lines, it looks like that's what's being attempted I'm guessing getting it adopted, you need to acquire large corporate clients who want to demand this sort of accountability from law firms they hire, more than acquiring the law firms as clients

Do lawyers usually send very detailed itemized bills?
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