
Four Areas of Legal Ripe for Disruption by Smart Startups - krambs
http://www.lawtechnologytoday.org/2014/12/smart-startups/
======
rayiner
The article mentions some interesting things, but I have a few quibbles:

> But even with today’s modern communication tools, both customer experience
> and lawyer workflow have remained stagnant.

At a large firm, legal practice is unrecognizable compared to even 10-15 years
ago. Everything is electronic: filing and docketing, document
collection/scanning/OCR, legal research, document management (DMS + version
control). Everyone communicates almost exclusively via e-mail, and remote work
facilities are ubiquitous.

To the extent that technology is available that's not getting adopted, it's
because it's not good enough. Predictive coding can be very helpful, but it
also has a fixed setup and training overhead that makes it less efficient for
smaller matters. That's why arguably the biggest shift in discovery in the
last 15 years hasn't been to automating it, but outsourcing it to contract
lawyers.

In the area of research, Westlaw and Lexis still rule because of their
completeness and accuracy. If I need a copy of some statute enacted in 1873 I
can not only find it, but I can get original scans so I can verify the text is
free of OCR errors.

Moreover, things that are easy on the rest of the web are not easy when it
comes to legal (or scientific) research. PageRank, for example, works great
when everyone searching for "skiing near Tahoe" is looking for the same
popular pages. But when you're doing legal research, a lower-court case that
directly addresses your issue but isn't widely cited is much more valuable
than a highly-cited Supreme Court case that doesn't address your issue. And
computers still don't really understand either what issue you're looking for
or what issue a case is about. So ancient technology (search for this word
near that word) still rules the day.

> There are good reasons for this, as law firms tend to be cost agonistic
> (since they pass costs directly to their client)

This is oft-stated, but economically fallacious. Price is a function of supply
and demand. The client cares about total cost for a particular legal service;
she doesn't care about how that cost is broken down. If the client's budget
for a matter is $300,000, every dollar that goes to costs is a dollar that
doesn't go to the law firm. This is true even if you're billing by the hour,
because in the long run, a firm will raise rates until hours x rate = client
budget.

~~~
Ntrails
One lawyer I talk to says that every single filing he makes at court has to be
paper. He bought a wheely suitcase to carry all this documentation around to
court.

If everything is electronic, his firm and the judges they deal with didn't get
the message...

~~~
Brian-Puccio
This is jurisdiction-dependent.

I work for a very large company with three dozen law offices across the US.
Listening to what is considered "normal" in other offices is always
interesting. I am, unfortunately, in an office that practices in courts that
are paper-dependent, even though there are rules that allow for electronic
filing and service in many circumstances, all it takes is one litigant (or the
judge!) to say "eh, I'm not comfortable with this, we're going to do this the
old fashioned way" and we're done.

------
tdaltonc
Four Areas of Legal Ripe for _Automation_

Automating these aspects of legal practice wouldn't disrupt the way that
industry functions. It would just make a lot of paralegals and young lawyers
obsolete (and make legal services a lot cheaper).

~~~
normloman
Thank you for pointing this out. I get annoyed when people use the term
"disrupt" improperly. A true disruption, in the sense that Clayton Christensen
used it, would be a cheaper but poorer AI replacement for lawyers.

------
Skywing
I currently write software for an e-discovery company. Most tasks that our
software is expected to be able to perform are simple-sounding tasks, at first
glance, such as ...

1\. extracting documents from within other documents (attachments out of an
email, files out of a zip, embedded excels out of a word doc, images out of a
powerpoint, etc)

2\. convert all said documents to some kind of standard media format so that
the native viewing applications are not needed (all said document types to
png, or pdf, or tif)

3\. allow full-text searching across all electronic files

With these kinds of tasks available as an automated feature, the real product
would just allow a bunch of attorneys to review the documents and apply tags
or labels to them. Once they've gone through all the documents, there is
generally an output from the system that summarizes their work and provides
the relevant documents, notes, etc.

Over the years of writing this kind of software, we've encountered a never-
ending amount of complicates with file types, feature requests, etc. The real
complexities with this kind of software is making your software work for a
large number of customers. Every customer probably has a different idea about
what they want this kind of tool to do for them.

~~~
lyagusha
Feature requests in e-discovery bloat your original software out of all
proportion. Nevermind getting past the original part of effectively searching
large troves of data in different formats.

~~~
iDedupe
Amen

------
vowelless
I am quite interested to know more about Judicata. It was cofounded by Blake
Masters (coauthor of Zero to One). Anyone have any info on it?

~~~
kemitchell
Last I spoke with the gang---unfortunately, some time ago---they were working
on legal search. Great group of people. They've been stealthy of late.

FYI, Blake also blogged the notes on Peter Thiel's start-up lectures at
Stanford.

~~~
napoleond
_> Blake also blogged the notes on Peter Thiel's start-up lectures at
Stanford._

Which became source material for Zero to One.

------
tootie
This paralegal I know told me 2 years ago "I wish someone would automate
discovery because it sucks right now". I wish I knew absolutely anything about
it.

~~~
killnine
I know some about it. As it stands right now, law firms need to find, trust,
and pay forensic investigators. The firm has to leave some data collection up
to the investigator, and then have some data turned over. By data, I mean hard
drives, images of hard drives, images of network shares, email exchanges, etc.

The law firm has to pay for the data collection, the disk space to store the
data, the transmission of data back and forth (investigator found something
good, buys external HD, ships it via the mail), the data analysis, the
investigation and reporting, and then sometimes the expert witness.

Sometimes, the law firm does not know what they're looking for, in other
words, there is no smoking gun piece of data. Sometimes, the goal is to find
something, anything, that would hint, point, or prove a goal.

What this means is that a retainer can either be here is 10hours worth of
analysis/investigation to find the email we know was sent that contains this
particular text. They do not plan on the analysis and investigation to exceed
that and usually the result is we found it/didn't find it and we did it in the
time allotted or under the time.

It can also be, "we're looking for evidence that this type of event has
occurred". This is where the billed-hours start stacking up. Its hard enough
digging through other people's emails, documents, and pictures looking for
something, let alone digging without having something in particular to look
for.

The point is, I believe that they, the law firms, want to, and need to, bring
this in house. This greatly improves the process. But now they need security,
real security, because its not their data being stored, it is their client's
client's data and so forth. It becomes very sensitive.

They need infrastructure. They need to be able to forensically acquire data.
Forensically store data. Forensically analyse data. Forensically share data.
The infrastructure needs to be fast, easy, and effecient. We're seeing 6TB
hard drives now... shares of much, much larger size. And they do not want to
be storing their client's data in someone else's cloud.

Then they either need technicians and investigators or the ability to hire and
grant access to their data on their network to the tech/investigator. They
need technicians to provide solutions to the inevitable problems run into
(i.e. how can I acquire each of the 2 drives in this FusionDrive raid and
return to the lab and build the raid on something other than osX?) And they
need investigators experienced at honing in on relevant data while digging
through vast troves of data.

~~~
jonstewart
I'm a computer forensics and eDiscovery guy. The forensics part of eDiscovery
is really overblown. It's the bogeyman, and not much more.

------
brighton36
No mention of Smart Contracts?

~~~
zo1
Doesn't look like it. Perhaps you'd like to fill us in on it? If my guess of
what it sounds like is anything what it actually is, then I'd be really
curious about knowing more.

~~~
tdaltonc
You can use a bitcoin-like system to build an agent that holds money in escrow
and then automatically delivers it when a condition is met[1]. This is the
simplest form of a "Smart Contract."

Most contracts are credible because their terms can be enforced by sanctioned
violence. "Smart Contracts" are credible because they are enforced by
distributed verifiable cryptographically-secure automation.

[1] For example, when the DMV database confirms that a certain car is now
registered in my name, you automatically get 4 bitcoin.

~~~
harryh
What happens if the DMV makes a mistake and incorrectly changes the car
registration to your name? Do I still get to keep those 4 bitcoins forever?

------
slatercity
I hear [http://thoughtly.co](http://thoughtly.co) moved into e-discovery for
visualization and summarization. Are there any other machine learning startups
in the space right now?

~~~
jonstewart
There's a long history of search/knowledge management/AI startups recognizing
that eDiscovery was their last, best hope for revenue. Recommind is one
example (founder invented latent semantic indexing), and Autonomy (yknow, the
folks who cratered HP) is another.

------
vqc
I'd be interested in seeing an IDE for contract drafting. Or something like an
Excel mapper that can show me how all the provisions and definitions in a
contract are interrelated.

~~~
joshjkim
Definitely interesting, and in a few cases I have built this internally for
myself before and it generally is useful (key phrase) when it can be built. I
did this primarily to keep track of (1) defined terms (each place a defined
term is used, and when a defined term includes another defined term), (2)
section references (where any section is referred to elsewhere in the document
so that if that section changes, what other things need to be impacted) and
(3) payment mechanics (a spreadsheet that uses the defined terms of payment
mechanics and allows you to plug in real numbers to see how the money flows).
This is helpful to understand a specific concept or mechanic.

Usually though, the moment you move into a transaction of even medium
complexity, while this might be helpful it can't be ultimately relied on - if
you were to track a defined term or a section reference, a change to that term
or section reference would impact not only the places where that term or
section reference is specifically used, but also where a concept depends on
such term or section reference. A basic example of the change of an actor from
singular to plural (originally there was one purchaser, now there are two
purchasers) - then, every pronoun and verb would need to be changed to plural
form. This is why you sometimes find contracts wonkily sticking with a plural
defined term when really there is just one entity/person described by the
term, or vice versa.

This mostly points to what I always say about the challenges to true legal
disruption: common law, statutes and contracts all depend on language subject
to interpretation (and in the case of common law, interpretation IS the entire
name of the game - see every supreme court case of the past 30 years to see
how much interpretation varies), and unless I am missing some major
breakthrough, we have not come to a point where language is understood
systematically enough to truly "hack" complex legal concepts as currently
drafted (aka. using language).

I could, however, imagine a new legal system that depended entirely on data,
numbers and systems instead of historical language, but it would first require
us to all agree that the system would govern and agree on the rules (or lack
thereof) of interpretation, which given the vested interests most of society
has in the current system, would be pretty challenging to implement.

That being said, you can see how this spectrum works by comparing the common
law system (like US/UK, which relies heavily on interpretation of judicial
opinions) and the civil law system (France, Korea, etc., which relies heavily
on a more formulaic interpretation of statutes) - way more costly litigation
and more politics in common law systems when compared to civil law systems.
The trade off is that common law is (arguably) more dynamic (judges can
overturn statutes unilaterally - civil rights, etc.), whereas civil law
systems require legislatures to make changes to statutes.

Full disclosure: I used to be a lawyer, so I am biased.

~~~
gmonahan
I'm intrigued by your idea of a new legal system dependent on data.

~~~
joshjkim
I think an interesting place to start would be trying to break the UCC down
into a numbers/data based system.

Similarly, it would be interesting to try and take a relatively conventional
transaction (incorporation documents, convertible notes, Series A) and place
the key economic terms in a spreadsheet, and then incorporate the other legal
boilerplate (indemnification, securities exemptions, etc.) by reference to a
standard T&Cs-type document - I know some incubators already do this by having
the key terms as a "fill-in-the-blank field (I think AngelPad does this..).
The agreement would then just be a spreadsheet-like form, with the other terms
incorporated by reference.

------
jonstewart
eDiscovery is _not_ ripe for disruption. That ship has sailed.

eDiscovery has largely been solved for most corporate environments. There are
tools to collect data in a defensible manner, to "process" (i.e., index) it,
and to review it. There are even some products that aggregate these functions
together, however, it must be well-noted that each of these functions has a
different user/customer and occurs at a different timeframe in the discovery
process.

Many of the dominant tools do have their warts. But the money that was once in
this space--the eDiscovery collection product I wrote sold for a couple
million to its first customer--is no longer there. Prices have dropped
dramatically and its now a commoditized market. So you'd have to work very
hard for very little gain to displace any of the dominant players.

Note that TFA was written by investors in a new eDiscovery startup and TFA
seems mostly like latent marketing for them. I don't know anything about them
--good luck and all that--but I'm very familiar with the space and I don't
envy them.

------
ryanb
It's hard to get excited about software for lawyers, and I think that's why
Disco has flown under the radar a bit, but I think these guys are going to be
huge. They've made exponential improvements in e-discovery software.

~~~
tucros3141
Having worked in e-discovery for many years, "exponential improvements" is a
huge overstatement. What they have is in pretty much any e-discovery product
on the market.

And they are missing a huge piece--predictive coding and advanced analytics
(email threading and near-dup are EXTREMELY common). If you are in NLP, ML
and/or IR, the legal industry is probably one of the most exciting places to
be. Huge datasets, available annotators and tons of money. It's a red-hot lab
of state of the art techniques being tried in the real world instead of on the
Reuters, 20-newsgroups, Enron, and other "canned" datasets.

~~~
jonstewart
On the research end of things, NIST's TREC has a legal track, and that's
probably the best place to look for what's happening in the "applied research"
space of the field.

~~~
tucros3141
TREC HAD a legal track. It's a shame it hasn't been done in 3 years.

------
thinkcomp
PlainSite ([http://www.plainsite.org](http://www.plainsite.org)), which I run,
is tackling the research end of things.

------
GFK_of_xmaspast
How many people are going to be put out of work by this.

------
curiously
Still seems quite a challenging disruption here. For one, you'd need to know
some aspect of the lawyer's daily job and two you'd have to know how to sell
to lawyers. The thing that scares me most is that these people also hold a
trigger to suing the crap out of you because they can. It's exciting and scary
at the same time.

