Start-ups take on tough customers: lawyers
Why did the entrepreneur want to sell to the lawyer?
That’s not a lawyer joke; I’m actually wondering why. There’s a noticeable increase in Boston-area start-ups pitching new technologies to law firms or corporate legal departments. But those aren’t exactly the most enthusiastic buyers of technology — and that’s according to the very entrepreneurs who are pitching new products.
“There’s a real unwillingness to experiment,” says Adam Ziegler, who left his law firm job earlier this year to start Mootus, a Boston site that wants to help attorneys tap expertise outside their firms. “The question you get all the time is, ‘Who else is using this?’ ”
Most law firms are set up as partnerships, so any money invested in new technologies comes right from the profits of senior partners. And those same senior partners can be pretty set in their ways, observes Dan Gaffney, chief executive of Westwood-based Brightleaf. “Those folks who have a few years left in their career before they retire aren’t looking to change or learn something new,” Gaffney says.
So why bother creating something for such a tough customer? Because entrepreneurs see a “profession in crisis,” and crisis, to them, smells like opportunity, says Marc Lauritsen, founder of the software consultancy Capstone Practice Systems. “There are deep-seated structural changes that people in the legal profession are gradually recognizing,” around topics like pricing transparency, do-it-yourself legal work, and even the previously taboo question of whether law firms really need fancy offices, says Lauritsen, a former Harvard Law School faculty member.
“When you look at the way technology has kept leapfrogging over the past few decades, decreasing the price of everything and improving productivity,” he says, “and then you look at the actual craft of doing legal work, it hasn’t changed much.”
But change may be coming. As of June, there’s a regular Boston Legal Innovation Meetup , founded by Ziegler and geared to attorneys, academics, and entrepreneurs. In May, Suffolk University Law School created a new Institute on Law Practice Technology & Innovation, intended to study how technology is changing the profession, and last month Northeastern University unveiled a new “innovation laboratory” called NuLawLab, advised by experts in topics like social media.
A handful of local start-ups, all small, want to spark change, too. Most haven’t raised significant money yet. Brightleaf has collected the most so far, $9 million, according to Gaffney. It has five employees in Westwood, and 30 in India. The company’s Web-based system aims to help attorneys at law firms or in-house legal departments streamline the production of documents.
One feature, Playbook, automatically analyzes proposed contracts. It highlights areas of importance, and suggests revisions based on how you have written certain clauses in the past. “There’s no reason to create documents from scratch every time,” Gaffney says.
Ziegler’s company, Mootus, won admission to the MassChallenge entrepreneurship program in June; it is based on an idea that came to him while working for the Boston firm Donnelly, Conroy & Gelhaar. Ziegler was preparing a major court case, and “I was way beyond my capacity,” he recalls. “You always have staffing limitations when you encounter these crunch times.”
The Mootus site allows lawyers to seek outside input on topics they are researching during those crunch times, like who is the leading authority on pharmaceutical patent infringement, or what is the case law pertaining to the validity of same-sex marriages. Attorneys can pose questions to the community anonymously, or answer questions and build a reputation on the site. (Ziegler sees that latter feature as particularly useful to recent law school grads trying to distinguish themselves in a very competitive job market.) Right now, Ziegler is planning to charge a $100 fee for posting a question on the site.
Andover-based Sky Analytics describes its approach as similar to “Moneyball for the legal industry.” The company collects data from its clients, which include Boston Scientific and Sun Life Financial, about past spending with outside law firms. Sky Analytics puts that data into a Web-based dashboard that can help them compare the costs of using various firms, or even individual attorneys within firms.
“The 2008 recession made everyone more cost-sensitive about their spending on legal services,” says chairman Ronald Gruner. “What we’re moving toward is being able to track the outcomes of all these matters that the law firms have handled, and help our clients understand the value received for the money they spent.” Gruner previously founded Shareholder.com, which helped public companies communicate with their investors; it was acquired by Nasdaq in 2006.
Other local start-ups include FairOutcomes, which offers online tools for negotiating touchy issues, such as the division of property in a divorce, and LexSpot, which lets consumers get price quotes from immigration attorneys. Part of what LexSpot does is get clients to enter data about their case, and upload relevant documents, so the lawyer has to spend less time handling paperwork. Cofounder and chief technology officer Forrest Blount says the company’s goal is to make legal services more affordable, while helping attorneys find new clients more cost-effectively.
It will be interesting to see which companies strike a chord — and grow. And it will be fascinating to watch the interplay between two very different types of people: conservative attorneys whose lives are governed by precedent, and entrepreneurs, wired to care only about the future.
Gabor Garai, a partner at the Boston firm Foley & Lardner, says he is optimistic that some law firms will embrace new technologies to gain competitive advantage in an increasingly challenging business. But he acknowledges that they have a long way to go. “Law firms must innovate to finally move into the 20th century,” he says.
Who says lawyers don’t have a sense of humor?