As Legal Embraces More Automation, Attorney-Founded Startups See an Opening

May 25, 2021
by Victoria Hudgins
law.com

While lawyers and legal staffers have an advantage when launching legal automation software, their startups can still face common growing pains.

 

A new wave of young lawyers and evolving client expectations is pushing the legal industry to automate more of its workflows and processes. The demand has created an opportunity for legal automation startups, especially ones launched by lawyers and legal staffers who have left private practice. 

Nnamdi Emelifeonwu, founder of legal drafting software company Define and a former Freshfields Bruckhaus Deringer attorney, noted that today’s clients are “expecting that law firms are utilizing technology to make their work much more efficient [and] they’re expecting law firms to utilize technology to foster more collaboration.”

What’s more, dissatisfied and innovative-minded lawyers are also spurring automation. “As technology becomes more advanced I think the legal workforce becomes more younger and tech savvy. Naturally, you have a situation where the new entrants into the profession are not going to be satisfied with the old ways of doing things,” Emelifeonwu added.

Emelifeonwu, who has seen overall demand for automation rise, noted that lawyers are in a position to launch automation startups because of their proximity to workflow pain points and their ability to relate to legal tech buyers, such as law firm managing partners. “Anyone can introduce technology to try to be efficient but you see many examples of those not working because the luminaries didn’t have an understanding of the practice of law and how lawyers work with each other and their clients. I think it’s definitely given me and my team an edge,” he said.

To be sure, legal staffers also notice the widespread inefficiencies that hinders law firms, noted Jasmine Gavigan, founder and CEO of legal service workflow template provider VrtuLaw. Gavigan previously worked as a legal staffer in Baker McKenzie and other Canada-based law firm offices.

She said her time previously working in the e-commerce platform Shopify highlighted the commonplace corporate efficiencies lacking in legal. “Going to Shopify and [getting] out of legal was the change I needed to see that what we’re doing—the way we operate law firms—no one else is doing [that], that’s not how corporations are structured,” she said.

Gavigan launched VrtuLaw in 2020 to serve as a digital checklist of all the lawyers, tech and staff involved during a firm’s legal matter. Such tracking, she said, would empower law firms to analyze all the individual costs associated with a matter. 

Gavigan believes that other legal staffers are likely to join her in becoming founders of automation platforms. ”I think that because of the closed nature of legal services, the startups who are successful at scale will be led by professionals with industry knowledge,” she said.

But not all legal automation startups should be helmed by lawyers. “Lawyers may have a more limited focus due to the nature of their career progression, and so a business professional with more exposure to varied problems may produce solutions which serve a larger market,” she added.

But while nonlawyers can develop software, they might be met by some skepticism in the legal market, noted Giles Thompson, a lawyer who is head of growth for legal document automation firm Avvoka. ”The willingness to acknowledge that people with other expertise can advise them and bring fresh ideas, I think that will depend on the open-mindedness of the law firm management,” Thompson said. 

Still, while lawyer-led automation startups are sometimes at an advantage, their founders face challenges. After all, all legal automation software providers must balance developing software that solves complex problems while avoiding client-specific features that can hinder broad usage among lawyers and other legal professionals. “Essentially it being complex or hard to use is a death knell for a tool like this because if you’re not able to change the solution’s [use case] up, it becomes underutilized and out of date very quickly,” Thompson said.

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