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There is NOT An Explosion In LegalTech

legaltech laptop hands no growth

[4/28/16 UPDATE: Bob has made an updated list that accurately reflects the number of legal startups.]

Last week Robert Ambrogi made a post, Number of Legal Startups Nearly Triples in Two Years, where he found that the number of startup companies in the legal category of startup/angel investor site Angellist had tripled in just two years. That’s some impressive growth.

The #legaltech crowd on Twitter exploded into a self-congratulatory circle jerk. Woo! Yay technology! Actual Tweet I saw:

The new generation of #startup and #lawyers taking matters into their own hands #innovation #legaltech #law 

#everywordisahashtag #aMillennialused”hashtag”asanadjectiveyesterday  #OMG #Ialmostpunchedthemintheface #etc

While I was impressed by the seeming growth in the legal technology industry, something didn’t sit quite right with me. For instance, I know that venture capital investment into legaltech has actually been on a downturn. This doesn’t look like it would lead to an explosion in the growth of legal technology companies. So I thought I would look into it a bit.

Initially, I sorted the 1,104 “legal startups” by number of followers. This seemed like the best way to look at the most prominent, active legaltech companies. That would give me an idea about the quality of the companies listed. So I started going through the companies.

At only the 6th company listed, I paused. LawPivot was acquired by RocketLawyer back in 2012. So they should be out of the running to be listed as a “legal startup” at this point. They should have been out of the running when Ambrogi made his initial post two years ago. But I guess it makes sense to have them listed for historical accuracy. Let’s go along with it for now.

Not much further down the list I came across Lawpal, ranked as the 16th most popular/most followers on the list. I knew off the top of my head that Lawpal closed its doors at the end of 2014, never gaining any traction with their platform (read a good history at Quora here). Lawpal should definitely not count to a “tripling” of startups in just two years. Not a good sign when we’re only up to 16 on a list of over 1000.

A bit further down the list (#26) I come across…Cooley? Cooley is a law firm, not a startup. They might service startup companies, but in no way should they be on an “Angellist.” It’s illegal to have non-lawyer partners in a law firm in the US. Not a startup in any way, shape, or form. Really it’s…well, spam I guess. It’s a way to stick themselves into a place where they might find clients. What are the California Ethical Rules on disclosing attorney advertising again? Asking for a friend.

At #36 we hit Lawyerfy, which was yet another practice management platform for lawyers. They’re nowhere to be found. I looked around and couldn’t find anything on the company. They last Tweeted back in 2012. I wonder how many startups (of any kind) no longer exist but for an abandoned Twitter page?

On a list of over 1000 legal startups, in the first 40 most popular companies listed, I found a bought-out company, two that went kaput, and a law firm. That doesn’t bode well for the rest of the list. Going further down, I continued to find more companies that were no longer in existence.

And of the most popular “legal startups” that are still around, something like 80% fall into five categories:

  1. lawyer marketplace/matching
  2. dispute resolution
  3. practice management
  4. document assembly
  5. legal research

Some of the companies might have an interesting feature or two, but really they’re just a different mousetrap, not necessarily a better one. Same shit, different skin. Why would anyone be excited about this again?

There is NOT An Explosion In LegalTech

Next I decided I would look at the most recent “legal startups” that have been added to the list. Maybe I was unfair by looking back at companies that were years old and had faded. So I looked at “legal startups” that have been added in the last year.

Initially, I was going to list out the anomalies, but once I got to 50 of them, I got tired of counting. There are hundreds of listings that have absolutely nothing at all to do with legal technology. A few random standouts include:

Now for the dozens and dozens of law firms on this list, I wonder if they put themselves there, or was it the work of lazy/nefarious marketing companies? Outsource your marketing…you know the rest. Fortunately for these law firms, most state bars are too lazy to actually monitor what their attorneys are doing online.

But out of all the companies I found cruising through the “legaltech startup” list, my favorite has to be Akku HP COMPAQ 6910p.

legaltech sucks fake legal technology not explosion legaltech

I mean, I think Akku HP COMPAQ 6910p is going to blow the competition out of the water in the legatech space. Who can keep up with their robust design and offering of services? It has 1 gig of RAM! Checkmate RocketLawyer et al. You’re toast.

A few takeaways:

  • Angellist is worthless if you’re trying to get an accurate read on startups in an industry. Their list is filled with erroneous, inaccurate, and outdated listings, not to mention straight up spam. It needs to be regularly culled & monitored for it to be useful. Get your shit together Angellist.
  • Just because you see a headline or story that supports your worldview or personal narrative, doesn’t automatically make it true. Given the gamut of information that flings itself at you on a daily basis, it can be tempting to take things at face value. Don’t. Be skeptical. Be analytical. Go deep. Find uncomfortable truths. Be careful of whose interpretation of events you decide to trust
  • Just because a company says they are a “technology” company, doesn’t mean you need to become an immediate cheerleader for them. You’re not on “team” anything. You’re an adult, you’re a lawyer. Act like it.

7 comments

  1. Although I have not looked at this list at all, my comment is about companies saying they “do” or “are” technology-anything and the degree of tech involvement.

    For example, I teach students Photoshop. Everyone says they “know” Photoshop but in reality, few do. Or they can’t use the tool with any sort of skill beyond creating creepy /merged/swapped photos to post on social media sites.

    So when you see a company that says it does legal tech- it’s important to ask not just what they do… but how much technology (regardless of hi or lo tech) do they really offer.

    • Sure. Everyone is a tech company these days. Hotdog stand on the corner? They use a Square dongle to checkouts. They’re a tech-hotdog stand now. Awesome.

  2. Keith Lee, thank you for this informative blog posting. Very, very interesting. Apparently, Rbt. Ambrogi has been misleading us, huh? Wonder whether the deception was deliberate.

    • I don’t think so. I certainly don’t fault Bob for taking the list at face value. Why wouldn’t he? Angellist has a decent reputation. Only after I started digging into it was it apparent that the list is full of shit.

      I just wasn’t surprised by it, because I assume most “tech companies” are mostly puffery. I’ve got lowered expectations I guess.

  3. Yeah, the AngelList numbers are mostly useful as a bellwether, about five years ago the number of companies in the mixed bag “legal” category was just 400-something, so there has definitely been some growth, but I also agree that funding news has been rather slow as of late.

    However, it’s also worth noting that a year or two ago AngelList added a “legal tech” category, with 298 (quite techy-tech, at least on the first page) companies at the moment: https://angel.co/legal-tech-1

    • Yeah, but there is a lot of duplicate entries between “legal” & “legaltech,” including a bunch of law firms. Beyond that, it’s just the same tired “innovations” of practice manage, lawyer marketplaces, & document assembly. Yawn.

      • Sure, there are duplicates, and anyway by my count, there is globally a grand total of maybe around 20 legal tech startups working on seriously AI-based legal solutions of various types, with a handful of newcomers each year. (I happen to be a co-founder in one of the even fewer that are based on original academic research…)

        Anyway, as far as legal tech goes, I certainly prefer the non-explosive kind. (If anyone disagrees, I’m sure the Akku HP COMPAQ 6910p would be exactly what you need.)

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