Thinking of Ditching Big Law for a Startup? Read This First.

Share on facebook
Share on twitter
Share on linkedin
Share on email

By Xiumei Dong , originally published in The Recorder.

It might still strike some as a surprise when a lawyer decides to leave a large firm—and the stability of a regular paycheck—for a technology-focused startup with presumably higher risks.

But for some Bay Area-based lawyers, the call of entrepreneurship is one they cannot resist. Many are motivated by the opportunity to test out new business strategies, while others are convinced that their products will give them a first-mover’s advantage in an ever-changing market for delivering legal services.

Andrew Dick, a former associate at Gibson, Dunn & Crutcher and Morrison & Foerster and the founder of his own small transactional firm, last year launched Select Counsel, an online platform that allows clients to search through a curated network of independent boutiques across the country.

Catherine Krow, a former partner at Orrick, Herrington & Sutcliffe, has created Digitory Legal, a budgetmanagement prediction tool that allows law firms and in-house legal departments to better predict costs and estimate demand for certain matters.

James Lee, a litigator at Quinn Emanuel Urquhart & Sullivan before starting his own litigation boutique called LTL Attorneys, has founded artificial intelligence startup LegalMation, which is able to automate many key tasks in the early stages of litigation. (Lee, who recently spoke with Law.com about AI and the law, just saw Walmart Inc. sign up to use LegalMation.)

The Recorder caught up with these three entrepreneurs for a roundtable chat about why each of them chose to start their own enterprises, as well as some tips they might have for other lawyers thinking of leaving Big Law to launch endeavors in the legal technology space.

Why did you decide to leave Big Law? How did you get involved in legal technology?

Dick: After practicing as a corporate associate at Gibson Dunn in New York and then Morrison & Foerster in San Francisco, I left to start my own firm in 2013. I wasn’t interested in a career at a big firm and figured that starting my own practice would give me the flexibility to explore opportunities, while still practicing law and earning a living. I assumed my next step would be to join one of my startup clients as GC or some other tech startup in the Bay Area. I never expected to start my own company. But as my law practice unfolded, I stumbled on an idea that I believed had some legs. I discovered that larger clients, particularly those accustomed to working with big firms, really appreciate a lawyer who has the big firm training and experience, but who can operate with the efficiency and cost-effectiveness of a boutique.

I found that I was not the only one doing this and that all over the country, and all over the world, lawyers were leaving Big Law for boutiques. My idea was fairly simple: Let’s aggregate the collective expertise of all these great lawyers onto a platform so that clients can quickly access the precise expertise they need, wherever they need it, through highly efficient boutiques. In doing so, you can create a model for delivering legal services with all the benefits of a big firm in terms of quality of lawyers, practice area breadth and geographic footprint, but with the efficiency and flexibility of a boutique.

Krow: A few years ago, I realized the legal profession needed to evolve. Law departments were, and are, under tremendous pressure to reduce budgets and obtain the best value possible from outside counsel. Legal operations and legal procurement had begun applying an unprecedented level of business discipline to the legal industry. To succeed in this market, I believed that law firms would need to carefully examine their processes, adopt new technology and make some significant changes to better meet the business needs of their clients. For me, all this change presented an opportunity to do something new and exciting that would advance the legal profession. After 17 years of practicing law and many years as a partner at Orrick, I left to develop technology that would help law firms and clients succeed in the modern market.

Lee: When I left Quinn Emanuel, I left with a few people to start a litigation boutique that would allow us to do more interesting work. We realized that, as a smaller firm, we have to use a lot of technology to be more efficient and more effective. So where most firms would use papers, postages and highlighters, we are using a lot more interesting technology. About two or three years ago, we started to look at AI as a means to further differentiate ourselves, and to see how we could utilize it in our practice. When we developed and then showed our product to other litigators, their jaws just dropped. That’s how we knew that we have something that could really disrupt the entire industry. We decided to focus on developing the types of AI solutions that could really change the entire landscape of litigation.

Do you all still practice law? What are each of your roles?

Dick: I no longer practice law, as I run Select Counsel full-time and wear multiple hats from sales to marketing to membership services. It has been a pretty dramatic change. I rely heavily on my legal background, as I spend most of my day talking to lawyers about the practice of law—whether it’s with one of the lawyers in the network about their practice or speaking with a GC about their outside counsel hiring needs. Having worked in big and small firm settings helps me understand and appreciate a client’s needs and how they can best leverage the attorneys in our network. Marketing is also a core component of what I do and in today’s world it’s all digital.

We are implementing various digital marketing strategies and heavily focused on social media. Lastly, I manage the membership aspect of Select Counsel, which is as much an internal membership organization and legal community as it is a client-facing service. I organize networking events, manage our discussion platform and negotiate vendor partnerships to obtain discounting on everything from insurance to legal [software as a service] offerings.

Krow: I no longer practice law. Instead, I help law firms and corporate legal departments solve business problems. As our CEO, I am responsible for creating the platform and executing on our objectives. I also frequently present, write and consult on issues of legal cost management and fee structures.

Lee: I am still involved with the law firm because we consider it the test kitchen, but I am really focusing on legal tech. I help with the strategy and direction of the company, as well as promoting what we do. My role includes being an evangelist for AI, leading the adoption of AI in legal practice and other business industries, and finding ways to do very high-level work repeatedly at a very low cost.

What are some of the challenges you have faced as a tech startup founder? Was the transition difficult?

Dick: Unlike practicing law, which is largely based on precedent, there is no playbook when you’re trying to create something that hasn’t been done before. Each time I make a strategic decision and commit the company to a certain initiative or undertaking, it costs time and resources and can’t easily be undone. I do as much research as I can, lean on my advisers and try to trust my instincts. But you never really know if you’re making the right call.

For example, I’ve committed Select Counsel to rolling out 25 weekly CLE programs starting in May. I’m doing this because I believe there is a gap in the market for in-house oriented CLE and a big opportunity to attract corporate legal departments to our CLE programs, exposing them to our network. For a small company like ours, this is a huge investment of time and money, so fingers crossed that it pays off. I’d say the pressure to constantly make smart decisions and allocate your resources as best you can is the toughest challenge I face as a founder, but it’s also exciting.

Krow: The greatest challenge was finding the right people to implement my ideas. Although I had a clear vision of what I wanted to build based on my industry experience, I am not a coder.  When I found the amazing development team we have today, that piece of the puzzle fell into place. Leaving Big Law to found a company is challenging because you have no support when you start out. One example: I was not very skilled at PowerPoint while I was practicing law; however, as a CEO, I am constantly presenting and had to master PowerPoint quickly. There are a million other examples of learning new systems, creating work flows and processes, and just rolling up your sleeves to figure things out. I wouldn’t change a thing, though. There is nothing more rewarding than building a company from scratch.

Lee: I don’t think the transition was very hard because I was a self-starter. I know that a lot of lawyers have fears around starting their own firm or business, but they shouldn’t. It is hard work, but it is extremely gratifying and very doable.

What advice would you give to other lawyers or recent law school graduates who are also interested in getting into legal technology?

Dick: What I am doing stems directly out of my personal experience. [That] gave me the understanding and context to pursue this venture. My advice to others is to go after something in an area that you know and understand personally. If the issue is important to you, you’ll be passionate about it and you’ll need that to get you through the challenges and setbacks every founder faces. You’ll also need that passion to convince others to buy into your idea. Pursuing something that you know personally will also reduce some of the risk. If you are trying to address a problem that you know exists because you’ve experienced it first hand, then you’re in a unique position to solve it, which gives you a greater chance at success over an outsider looking in.

Krow: First, spend some time learning what legal tech is out there right now. There is a great directory of legal technology providers published by Above the Law, so I would start there.  If you are building something yourself, the first question you must be able to answer is, ‘Is it needed?” If the answer is yes, the next question is, “Who are your competitors and how are you different?” You should also understand the competitive landscape if you are applying for jobs at legal tech companies.

Lee: One thing I would say is ‘don’t be afraid,’ because it is very doable, but I think you need to find the right people to get involved with. If there is a need, there is a way to fill it. Basically, assembling the right team to come up with the right solution to solve that need is the best advice I could give.

How much do you charge for services? Are you making a profit?

Dick: Currently, our revenue model is based solely on membership fees that the lawyers in the network pay, which is $85 per month, or slightly over a thousand dollars per year. We currently have about 350 lawyers subscribed to our service and membership is growing steadily. We have a few additional revenue models that we plan to roll out as we go, but revenue is secondary to our primary objective, which is to gain traction and brand awareness and position Select Counsel as the go-to platform that corporate clients turn to for high quality boutique counsel.

Krow: We currently have hundreds of users on the single-user platform that is available through our website, including users at Am Law 100 firms and Fortune 500 companies. We just released our enterprise-level system, which is designed for larger firms and corporate legal departments, and have already signed top-tier firms to that platform. We also announced our billing data analytics services at the ABA Techshow, which is a very exciting and deeply needed service. The response to that announcement has been overwhelming. We have a subscription pricing model based on the number of users and number of matters. A base level guideline for enterprise users is $100 per user per month, but we provide enterprise license quotes after discussion with customers about their needs.

Lee: It depends on the level of litigation complaints we are processing. It can range anywhere from the low- to mid-hundreds. We have two or three users about to sign on to what we call the implementation phase. We have started to generate a little bit of revenue from the preliminary testing with clients, but we’re excited about the financial potential as we start rolling out more and more user seats in California and other states.

Do you consider your company disruptive to the legal industry? If so, how?

Dick: It certainly has the potential to be. I’d estimate that boutiques represent 5 to 10 percent of the total work that corporate clients are sending to outside firms and that Select Counsel could be the spark that drives that figure up substantially, which would really alter the legal services landscape. The more that top lawyers continue to leave Big Law for boutiques, the more clients will take note of the high-quality boutique community that is emerging, the demand for these firms will rise and legal spend will fall. If we can successfully position Select Counsel as the platform for sourcing these boutiques, and we can simplify the search process and alleviate any concerns around quality, then we’ve removed much of the friction around hiring boutiques. I think you could then expect to see widespread adoption of the boutique model.

Krow: Yes. We give law firms and clients the data and tools they need to transition off the traditional hourly billing model to alternative fee arrangements, even for complex work. This is where clients want the market to go, so firms must find ways to be competitive and profitable in a new pricing regime.  Our platform solves this difficult problem. Lee: I think if you go to any large firm today, there is a lot of wasted efficiency, a lot of bureaucracy. If they start to use more technology, they would quickly become as efficient as smaller firms. There is a reluctance sometimes for older partners at larger firms to change, and that is unfortunate. But to be competitive with the next generation of lawyers, they need to adapt and challenge the way they have been doing business all these years.

Contact Us

Careers

You want to work at LegalMation because XYZ. Check out our open positions below and join our team.

Platform Overview

LegalMation provides a suite of Artificial Intelligence tools to help litigation attorneys and legal professionals practice at their highest levels. Our litigation automation solutions tackle routine litigation tasks. Unlike existing template generators and form-fillers, LegalMation's ground-breaking AI system is able to dynamically produce responsive pleadings, discovery requests, discovery responses, and related documents that are tailored to the claims, allegations, and requests in the legal document uploaded, incorporating jurisdictional requirements as well as the attorney’s own style, formatting, and response strategy.

Our litigation analytics solution uncovers deep insights into our customers' own data (the data sitting underneath the surface), drilled down to granular data points, previously not possible. The impact? Our solution fundamentally transforms how cases are assigned, budgeted, settled, pitched, and much much more.

Developed by a passionate group of award-winning litigators and highly accomplished software developers, LegalMation is focused on liberating litigators to allow them to focus on more valuable tasks in their practice.

LegalMation distinguishes itself from other Artificial Intelligence products in several key aspects.:

  • LegalMation is the first Artificial Intelligence company to focus solely on using AI to automate and enhance litigation tasks.
  • LegalMation uses cutting-edge AI to power its platform and, unlike some other legal tech platforms, LegalMation requires no human involvement to generate its output.
  • LegalMation's automation solution is not a template generator, form-filler, or other Q&A-driven tool. Rather, our A.I. solutions generate actual work product--caliber drafts of legal documents comparable to that of an attorney or legal professional that only require minor editing and basic review before filing/serving. Drafting these documents from scratch often takes an associate attorney or paralegal an entire day, but our products can produce comparable high-quality drafts in mere minutes.
  • LegalMation's analytics solution, takes an entirely different approach to data analytics. Our proprietary solution ingests a company or law firm's own existing data (billing, case results, etc.) and provides deep insights down to granular levels previously not possible. Unlike publicly available statistics, we believe our customer's own data provides truly actionable insights. After all, less than 5% of case results are publicly available.
  • LegalMation’s solutions are fully customizable to our customers' needs.
  • LegalMation’s solutions are easy to use and require no computer knowledge besides how to use a mouse and keyboard. Our products are browser-based; there is nothing to download or install. The interface is simple and clean, and designed to be accessible to even the least tech-savvy. As a result, the adoption cost for integrating LegalMation to an existing organization's workflow is very, very low.

Corporate In-House Case Study

A leading global retail giant achieves significant savings on legal fees on its high-volume litigation matters using LegalMation’s Complaint Analysis tool.

The Legal Operations group of a leading global retailer with significant litigation volume across the country was searching for technology tools to increase efficiency and consistency on its litigation matters, lower its legal spend, and obtain more value from outside counsel. Working with LegalMation, the retailer identified two litigation areas with large volume where the deployment of LegalMation’s Complaint Analysis tool could have a significant impact: employment and premises liability tort litigation.

The retailer conducted a pilot of LegalMation’s Complaint Analysis tool by asking select outside counsel to run complaints through the LegalMation Complaint Analysis tool and compare the outputs to those generated by the firm’s typical workflow.  LegalMation’s Complaint Analysis tool was able to generate an answer, requests for production and interrogatories that were almost identical to those generated by outside counsel and tailored to the facts and allegations of each.

Today, this global retailer has made LegalMation an integral part of its workflow and case assignment process. When a new lawsuit is served on the retailer in one of the jurisdictions where LegalMation operates, an in-house paralegal runs the complaint through LegalMation’s Complaint Analysis tool and sends the output, consisting of an answer, requests for production, interrogatories, and other jurisdiction or firm-specific output to the selected outside counsel for the matter.  Outside counsel then bills the retailer solely for the time spent reviewing and editing this initial output which generates significant savings for the global retailer.

Challenge

  • Increasing budgetary pressure to lower outside counsel legal fees
  • Obtain more value from hours billed by outside counsel
  • Lack of consistency in work product and quality from outside counsel

Solution

  • Deploy LegalMation internally to generate initial draft responsive documents in minutes
  • Integrate LegalMation into its initial case assignment process

Results

  • Up to 80% savings on outside counsel legal fees on key early stage litigation document drafting.
  • Reallocation of outside counsel time away from process/routine work to higher value strategic tasks.
  • Increased consistency and quality in work product

Large Firm Case Study

An Am Law 100 labor and employment law firm was searching for ways to become more competitive and capture more market share

Handling over 5,000 employment related litigation matters per year across the country, the Am Law 100 law firm (the “Firm”) needed a quantifiable solution to lower its servicing costs and provide more value to its national clients. The Firm engaged in extensive testing of LegalMation’s platform across multiple offices to determine its effectiveness.

Using LegalMation’s Complaint Analysis tool, the Firm was able to reduce the attorney time spent preparing answers, affirmative defenses, and initial written discovery (requests for production, interrogatories, and other jurisdiction-specific requests) from an average of 6-8 hours per matter, to less than 1 hour (including review time by an attorney). The Firm tested LegalMation’s tools across multiple types of employment cases across various jurisdictions and concluded that the resulting draft documents were not only produced incredibly fast, but were also consistent in quality.

Today, the Firm is able to offer more competitive proposals for its volume matters, which in turn allows it to obtain additional work from national clients.

Challenge

  • Downward price pressure in high-volume, lower-exposure matters
  • Making Alternative Fee Arrangements more competitive and yet more profitable
  • Differentiate from competitors during marketing pitches
  • Lack of work product consistency from associates/paralegals

Solution

  • Integrate LegalMation into volume litigation matters in the Firm’s busiest offices

Results

  • Up to 80% time savings on key litigation tasks
  • Higher profit margins on volume matters, particularly those on AFAs
  • More distinctive marketing
  • Higher levels of associate satisfaction

SMALL LAW Firm Case Study

A high-caliber general litigation boutique reduced paralegal and associate time and money expended on key early litigation tasks by 75%+

A general litigation boutique with around 40 attorneys needed to cut costs in order to stay competitive in a very crowded local market and also sought to minimize reliance on support staff.

Using LegalMation’s platform, the boutique law firm was able to reduce the attorney (and paralegal) time spent preparing answers, initial discovery (requests for production and interrogatories), and discovery responses, including objections, from several hours per matter, to less than 1 hour (including review time by a supervising attorney). The boutique firm tested LegalMation’s Complaint Analysis tool and Discovery Analysis tool across multiple practice areas and concluded that the resulting draft documents were not only produced incredibly fast but also with consistency and quality similar to its own junior attorneys and paralegals. In particular, the boutique law frim, which did not have the luxury of a large support staff, found LegalMation’s Discovery Request tool particularly helpful in dealing with burdensome discovery requests served on its clients.

Today, the boutique law firm is able to offer more competitive proposals for its matters and through the efficiency gained by LegalMation’s platform compete against national law firms with more resources.

Challenge

  • Downward price pressure due to a crowded local market
  • Limited associate/paralegal resources to handle routine drafting tasks
  • Compete against national law firms with more resources
  • Differentiate from competitors during marketing pitches
  • Lack of work product consistency from associates/paralegals

Solution

  • Deploy LegalMation’s Complaint Analysis tool to generate initial draft responsive pleadings, and the Discovery Analysis tool to quickly generate shells and responsive objections throughout the life of a case

Results

  • 70-85% time savings on key litigation tasks
  • Higher profit margins on volume matters, particularly those on AFAs
  • More distinctive marketing
  • Higher levels of associate satisfaction
  • Reduced staff overtime
 

Success Story

“Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam.

Ut enim ad minim veniam. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam.

Amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam.”

John Smith,
Company Name
James M. Lee
Co-Founder & CEO

James M. Lee is co-founder and CEO of LegalMation. He is a founding partner of LTL Attorneys LLP, a nationally recognized litigation boutique. As an experienced litigator, he has tried numerous cases in federal and state courts. He has been recognized as a top business litigator by various legal publications including the National Law Journal. James has served as lead counsel to a number of Fortune and multinational clients including Wal-Mart, Thomson Reuters, Symantec, and VIZIO. He was formerly associated with litigation powerhouse Quinn Emanuel before co-founding LTL Attorneys. He is a frequent and noted speaker and commentator in the field of AI and innovations in the field of law. He received his J.D. from Stanford Law School, and his B.S. from the University of Southern California. At LegalMation, James serves as the key driver of the Company’s vision and strategy.

Technical Support

Need help with LegalMation? We're here to assist.
Send us a quick note below and we'll be in touch right away.

You can also call us at (949) 662-1429, Monday through Friday, 8:30 a.m. to 6:30 p.m. PST.

Lorem Ipsum Dolor Sit Amet

Topic & name of speaker

Hosted by John Smith
1/25/19 @ 5pm PST

Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. 

Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur.

Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur.

Sign up for event notifications

Insurance COMPANY Case Study

A national insurance carrier achieves significant savings on its high-volume, low exposure litigation matters through its adoption of LegalMation’s Complaint Analysis tool

A national insurance carrier with significant litigation volume across the country for its insureds, was searching for technology, tools, and processes to increase efficiency on its litigation matters to lower its litigation costs. This national insurance carrier partnered with LegalMation to identify an area of litigation where LegalMation could have a significant and immediate impact and decided to deploy LegalMation’s Complaint Analysis tool for all of its third-party motor vehicle tort litigation.

LegalMation worked closely with the national insurance carrier to customize the output from its platform to generate documents that mirrored the current output of the national insurance carrier’s attorneys and paralegals.  LegalMation was able to automate the creation of an answer, requests for production of documents, interrogatories, requests for admissions, and deposition notices, all tailored to the facts and allegations of each complaint and almost indistinguishable from those manually created by the insurance company’s attorneys and paralegals.  LegalMation was able to generate this output in 2-3 minutes—a significant time savings over the insurance company’s prior practice for generating this output.

Following a pilot program consisting of processing all of its complaints for a single jurisdiction through LegalMation, the national insurance company made LegalMation an integral part of its workflow for all jurisdictions where LegalMation currently operates. In these jurisdictions, when a new motor vehicle-related lawsuit is served on the insurance company or its insureds, the assigned counsel or paralegal runs the complaint through the LegalMation Complaint Analysis tool, downloads the initial outputs, which are then reviewed by the attorney or paralegal and finalized, all within a few minutes.

Challenge

  • Increasing budgetary pressure to lower legal spend on defense of insureds
  • Obtain more value from staff counsel
  • Reduce legal secretary/paralegal overtime

Solution

  • Deploy LegalMation internally so staff/captive counsel can generate initial response draft documents in minutes

Results

  • Up to 80% time savings on key litigation tasks
  • Reallocation of staff/captive counsel time away from process/volume work to higher value strategic tasks
  • Increased consistency and quality in work product

Request FREE TRIAL