Interview: Bill HendersonProfessor of Law and Val Nolan Faculty Fellow – Indiana University

William D. Henderson is Professor of Law and Val Nolan Faculty Fellow at Indiana University’s Maurer School of Law. He introduced a first-year course called The Legal Professions, and he also teaches various business law courses, including corporations, business planning, project management, and the law firm as business organization. From 2009-2014, he served as the director of Indiana Law’s Center on the Global Legal Profession. Henderson’s scholarship focuses on empirical analysis of the legal profession and legal education. He recently sold Lawyer Metrics, a consulting firm he founded that uses evidence-based methods to assist firms in identifying, selecting, and developing world-class lawyers.

There are a lot of people who think and write about the business of law and the law firm model. But I think some of your work has a little extra twist to it. It goes down to the role of the specific lawyer and the nature of the work; seeing law as a labor market, not just as an industry, and some of the interesting developments there. Yeah, in technical terms in social sciences they call that the “unit of analysis,” and for most people the unit of analysis is the organization. My unit of analysis is typically, if possible, the individual lawyer and then I aggregate up. And actually, it was my study of law firms that eventually got me into a big area in my research, which is lawyer development, and basically what allows somebody to become great. Because the law firms tend to have a baked-in model regarding what makes somebody successful, and as I kind of put those under an empirical lens, I found them one after another to be wrong, or kind of bad interpretations of history. I’ve just finished up an article now published in the PD Quarterly on talent systems, and I make the claim that talent systems are about 100 years old, but for about 80 of those years we forgot how important they were.

Obviously, technology is driving a lot of the changes that you document in your research. So where do you see the biggest drivers within the legal tech space? I want to divide up the market into two areas: the consumer market and the organizational or corporate market. The consumer market is about one-quarter the size of the corporate market. Somebody at start-up incubator Y Combinator said recently, “We’re bullish on legal,” but if you look where their investments are, they tended to be consumer-facing ones. And that’s because if something is made better and more accessible, instantly the consumer is better off. In the corporate space, tech is a little bit more difficult, because the dominant way we pay for services is by the hourly rate. The client likes it when you can get it done in a half or quarter of the time, but actually the technology that does that creates big transition problems for law firms. Dan Katz has sometimes referred to this as “the last mile problem,” that the law firms are not well equipped to retool their business model to deal with the benefits of technology. And so technology can probably be more. Its absorption in law firms is going to be retarded by this last mile problem, because the firms don’t know how to retool their business model to operate on volume – in other words, to make up the cost savings by taking revenue from their competitor. And the in-house lawyers who are their clients are not all sophisticated consumers and don’t realize that their service provider has got a serious business transition problem.

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Legal Tech LinkConnecting the Legal Technology Ecosystem

LEGAL EXECUTIVE INSTITUTE

David Curle, Director, Market Intelligence, Thomson Reuters | Roland Vogl, Executive Director, The Stanford Center for Legal Informatics

Bill Henderson

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Interview, continued …

You’ve been documenting some phenomena such as new legal operations roles, and new types of companies entering the market that are employing people with mixes of legal and technology skills. How do you see that playing out? Are we going to see a completely restructured industry, or will we just see these new roles start to turn up within traditional law firms? That’s a great question, David, let’s see if we can kind of break it into some component parts. I think that legal operations is going to continue to grow as a major field, and some of it is going to be tapping into a people with process, data, and finance capabilities, and they’re going to learn a little bit about law; and then you’re going to have lawyers who are going to get re-tooled to do this. Now, I think that – and I made this claim in an article in ABA Journal – I think of legal operations as a methodology for building systems to solve legal problems. And I think that the operations exist in Thomson Reuters. It exists in more sophisticated legal departments. It exists in firms like Littler Mendelson, Bryan Cave, and White & Case where legal operations people are building one-to-many systems. And I think that Eddie Hartman’s team at LegalZoom is doing what I call “legal operations.” He’s got an R&D department there, and they’re very sophisticated. I remember meeting with Eddie’s team, and I said, “Raise your hand if you went to law school,” and three of the nine had gone to law school. I suppose the good news is that law will always be a part of a civil, complex, regulated society, but we have an interest in not making it too expensive. And I think that part of the growth in legal is going to come through by making it cheaper, so more people can afford it. And I think that, in the corporate sphere, the volume of legal problems that need to be solved in complexity is going up, and so I think it’ll continue to employ a large number of professionals. But the thing that they need is professionals that keep up with the increase in the complexity, which is going to continue to skyrocket for years to come. So let’s push this conversation back upstream, then, to law schools, because I know you’ve done a lot of work on how we’re preparing lawyers for this new world. I don’t know what you think, but I see some centers where people are trying to teach law in a new way, or teach new sets of skills, or teach in a multidisciplinary way, but those are kind of the exceptions rather than the rule. How prepared do you think our law schools are for feeding into this new environment? I want to be fair and I want to err on the side of generosity, in fairness to law schools. This is a huge shift we’re going through, and the early stages of adapting to that shift might be characterized as resistance or chaos or denial. I mean, it’s a pretty big paradigm shift. Here’s the one other reason why this market is very slowly adapting: We are exiting a period where law was the penultimate credence good. What I mean by that is that it’s very difficult to know if you were well-served or poorly served by your lawyer or your law firm.

And so the proxy that has been used to associate you with quality was your credentials. If you went to a school that was hard to get into or prestigious, we presumed that the legal work was good and then, therefore, it could command a premium. The legal operations perspective measures quality, and as a result, the fact that you got into a school because of your high LSAT score really won’t do any good, because the question is, “do you know these technical skills? Yes or no,” and “can you actually do them?” Because you need to know these skills, and a legal operations system is actually capable of measuring its throughput for quality, volume, and things like that. And legal educators are not yet moving from a credence-good model to a skills-based model, where you’re teaching technical skills that are often not legal in nature, but complementary to legal. What can you tell me about Lawyer Metrics and how that company tried to measure lawyer performance and – if I understand it right – to predict performance, to some extent? Lawyer Metrics, the company I founded, is focused on the business side of law. There’s another branch of metrics on the substantive side of law, like total cost of a case, that some of the big insurance companies use. But let’s just stick with the business side of it. We built systems for identifying, through resumes, people who are likely to succeed as associates; basically this entails pulling resumes out of a stack and – instead of having somebody look through resumes – pre-scoring the resumes with a predictive index. To kind of “Moneyball” the resumes and rank them based upon their presented attributes by using the statistical model, just like they did in the movie. We also built systems for behavioral interviews. The best predictor of future behavior is past behavior, and if you ask the same questions in the same format that elicit answers that go to your success factors, you can, again, improve your selections and your hit rate pretty dramatically. We also built systems related to lateral partner hiring that are based upon best-in-class and reviewing methodologies, and built systems for scoring the candidates. And so we built quite a bit on that lawyer selection side. The company also does a lot of work related to engagement surveys and very sophisticated back-end analytics that allow the firm to make management decisions to drive up satisfaction, reduce attrition, and increase morale, kind of understand what its culture is and better message what that culture is to strengthen the firm. And we also built some very sophisticated data sets that were client-facing, business intelligence and profitability models, and we viewed our role as building a first-rate data analytics research department that was more cost-effective than trying to build your own internal shop. I’m very proud of the work we did there. And I got to learn how to sell to law firms, which is almost equivalent to splitting an atom!

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Interview, continued …

Yes, we hear that complaint a lot! I want to get back to that question you talked about earlier about whether we’re going to see sort of a fragmentation of the legal work that’s now done by law firms. Are we going to see more and more of it just getting split off into different types of providers? Or will law firms themselves find a way to adjust and to bring in and deliver what they do in a new way, so that the law firm continues as an entity, but more or less has a different structure? The answer to the former and latter question is yes and yes, you’re going to see both; the managed services providers are getting more and more sophisticated. UnitedLex, Axiom, Counsel On Call, Elevate, Radiant Law, Thomson Reuters Legal Managed Services – they’re climbing up the value curve. They’re very sophisticated and they have a business model, an investor model that’s built for the long term.

That said, law firms have this enormous thing that clients greatly value, which is called a brand, and I’ve often wondered when law firms are going to realize that it’s an asset; and if they don’t

leverage it, and if it doesn’t get fortified with some of these new technologies, it’s just got a half-life that is going to last, basically, until maybe a partner now aged 52 or 55 retires. Most clients would prefer to have these solutions bundled together with advisory services, but the law firms don’t really know how to do that bundling properly, and it’s fairly capital-intensive to do it. So it’s going to play out, and I think that what’s going to happen is that you’re going to have about half as many large law firms, and some will get rescue mergers, and some of them will go out of business. But basically, the partners with the client following are going to repatriate their practices to firms that have already made these investments, like the Paul Hastings-type investments, or the Littler or the Bryan Cave-type investments. I think, to a large extent, the winners and the losers have already been picked, because you had to have made these investments several years ago, and you needed great leadership several years ago to put yourself in a position to receive the lateral talent that’s going to migrate over the next 10 years.

Legal Tech Start-Up Focus

More Dentons InvestmentsNextlaw Labs, Dentons’ investment and R&D subsidiary, participated in a round of funding for due diligence workflow start-up Doxly. As part of the deal, Dentons will begin deploying Doxly in its firm as a Doxly customer. Nextlaw Labs also announced an investment in Beagle, a Canadian legal tech start-up that is using artificial intelligence to transform the legal contract review process. Press Release »

Luminance Launches New AI CompanyEx-Autonomy head Mike Lynch’s Invoke Capital has invested $3 million in Luminance, a UK start-up using artificial intelligence to process legal documents and automate due diligence in mergers and acquisitions. Luminance joins players like RAVN and Kira, in the market for processing and analyzing large collections of legal data. First out of the gate with the offering will be Slaughter and May, which plans to use Luminance for approximately 50% of its London-based M&A deal work.Source: LegalWeek

New Fund from LegalX The founders of LegalX, the legal tech cluster within Toronto’s MaRS innovation center, are forming an early stage investment fund of $20 million. Law Made will act as the fund’s general partner, leading its investment activity, including selecting the start-ups it works with. Source: Legal IT Insider

11 Legal Tech Start-Ups Supported by Y CombinatorThe Y Combinator accelerator in Silicon Valley offers growing start-ups a $120,000 investment and a mandatory participation in its summer boot camp-style program, culminating in a Demo Day showcasing new deliverable products. Recently, the share of legal start-ups it supports has increased. To date 11 legal tech companies have gone through or are in the program, with most of them focused on the consumer space. Source: Legaltechnews Blockchain Start-Up R3 to Obtain $150 Million in FundingR3, a blockchain start-up working on blockchain infrastructure for the banking industry, has announced that it will likely close a $150 million round of funding early next year. R3 has developed Corda, a distributed ledger platform that will allow banks to exchange and record transaction information in a shared ledger. Corda can be the platform that will support automated smart contracts in banking. Members of the R3 consortium include over 70 banks and Thomson Reuters. Source: Techcrunch

LexisNexis to Open a Legal Tech AcceleratorLeveraging its recently acquired subsidiary Lex Machina’s presence in the Silicon Valley, LexisNexis will establish an accelerator for legal tech start-ups. The start-ups will get space, mentorship, and networking with Lex Machina’s contacts at Stanford’s CodeX center. In separate news, Lex Machina announced the release of its third practice area coverage – Antitrust, adding to existing IP Litigation and Securities offerings. Press Release »

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Legal Tech Community News

New International Legal Tech and Innovation Communities – Europe and AustraliaThe European Legal Technology Association (ELTA) launched in October 2016. The group intends to help Europe catch up to the US in the legal tech space; to facilitate networking, raise awareness of legal tech and innovation, promote research and surveys; and to engage with the legal education community around legal tech. Source: Legal IT Professionals

Global consultancy Janders Dean has partnered with The Legal Forecast, a grassroots organization of young lawyers and law students with a technology bent. In addition to its own events, The Legal Forecast will participate in the Janders Dean APAC Legal Innovation Index competition, and in other upcoming Janders Dean events. Announcement »

ABA Forms New Center for InnovationThe Center will advance the ABA’s position as the lead architect of the legal profession’s efforts to increase access to justice and improve the delivery of legal services through innovative programs and initiatives. It will serve as a resource for ABA members and operate a program of fellowships to work with other professionals, such as technologists, entrepreneurs, and design professionals. The Center also will maintain an inventory of the ABA’s innovation efforts as well as the efforts of the domestic and international legal services community. The Center has also announced its new Governing and Advisory Councils.Announcement »

Readings A sample of the latest analysis of the legal tech and innovation space.

Bob Ambrogi: The 10 Most Important Legal Technology Developments of 2016Ambrogi’s LawSites blog is one of the best sources of information and insight about the legal tech that’s impacting the legal industry today. This year-end roundup captures not only the increasing pace of legal tech developments, but also the diversity of legal tech. It covers technology developments in such diverse areas as artificial intelligence, chatbots, and analytics, and industry issues such as in Tech CLE, regulatory limits on innovation, Internet of Things practice, and the role of tech in the Access to Justice movement. Read article »

The Industrial (Legal) RevolutionSometimes it’s easier to understand the impact of technology on the legal services industry not by focusing on specific technologies or products, but rather on the bigger picture and by analogy to other industries. Fastcase CEO Ed Walters does an excellent job in this piece; he makes the case that the changes coming in legal can be seen in the industrialization of other industries. Standardization, a focus on process automation, and the importance of infrastructure have all been important to the industrialization of other industries, and Walters shows how legal, if a little slower and later than other industries, is on a course to go through the same process. Read article »

Blockchain 101 for the Non-Techie LawyerMany lawyers have heard of blockchain technology and know that it’s the tech underlying the bitcoin cryptocurrency. Blockchain is likely to play an increasing role in certain kinds of transactions through blockchain-based smart contracts, and that clearly means blockchain is likely to have a big impact on many practice areas. Still, many practitioners don’t have a basic understanding of how blockchain works and what its impact will be. This article provides a brief overview on how blockchain is likely to change things. Read article »

A Good Weekly Update – Dutch Legal Tech If you want to keep up on legal tech, but don’t have time to drown in a fire hose of news and press releases, then this should be one of your key sources. Don’t let the name fool you – it comes from the Netherlands but it’s global in scope. This resource is a well-curated selection of articles, resources, tools, and conversation from the world of legal tech. This newsletter is curated by Jeroen Zweers @zweers and Jelle van Veenen @jellevanveenen, legal tech leaders in the Netherlands who also run an active legal tech Meetup group and start-up competition. Subscribe »

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Academia

Law Schools: Hotbeds of Legal Innovation?By Katie Walter, Director of Marketing, Government Segment, Thomson Reuters, Legal

If ”hotbed of innovation” doesn’t square with your perception of law school, I invite you to take another look. The first-ever Thomson Reuters Product Design Challenge provided plenty of evidence that law students are creative, innovative, and can show us the way to new solutions. The Challenge took place on Nov. 4 at five US law schools – Duke University, the University of Missouri-Kansas City, Suffolk University, Brooklyn Law School, and LegalRnD at Michigan State Law. At each school, small teams watched demonstrations of Thomson Reuters Practice Point™ and innovative offerings from small legal tech firms, had a lesson in design thinking from expert Mona Patel of Motivate Design, and then got to work. Their mission was to propose a feature or approach that would make Practice Point even better for new and practicing attorneys. The event was designed to tap into the innovative energy at law schools, and to integrate the needs of emerging attorneys in our product design approach. The teams competed locally, and then one winning team from each school participated in a national competition via webcast. I was a judge at Suffolk University in Boston and saw some really great thinking around workflow management and suggestions for how technology can help improve access to justice in our society.

“We saw an encouraging and inspiring set of ideas that confirm that our future customers are eager for technology to do more

tasks for them so that they can focus on the really thoughtful and analytical work they are passionate about,” said Chris Schultz, Product Development director for Practice Point.

The winning team was from the University of Missouri-Kansas City. They proposed enhancing Practice Point by enabling it to interact with them on the intricacies of specific cases and to create more tools for communicating among the matter team throughout the course of the matter. Great ideas from these “digital native” law students.

Thomson Reuters, Legal captured the ideas that came out of the competition and gained great insight into how our students are thinking about the possibilities technology brings them. The project now moves to a second phase: The event served as a recruiting ground for Schultz and his team to involve students even more closely in our product design process. Five students – one from each school – have been selected for a six-month “Design Adviser” engagement. They will visit Thomson Reuters offices, get a look at products that are still in development, and give real, tangible input on how to make sure those products sing for their demographic. Carlos Gamez, Senior Director of Innovation, led a cross-functional team from Thomson Reuters, Legal in organizing the events. Thomson Reuters partner Evolve Law supported the effort.

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Legal Tech Events CalendarA selection of essential upcoming legal tech and innovation events from around the world.

January 2017

LegaltechNew York – January 31 - February 2With over 10,000 attendees Legaltech is the largest and most well-established legal tech trade show. For many years the event has been dominated by eDiscovery and related technologies and services, but virtually every other form of legal technology is represented as well – practice management, drafting, legal research, process management. But at its core it is a trade show and is therefore dominated by vendors – including a large exhibit floor and plenty of product-specific conference sessions. It’s great for taking the temperature of the state of legal tech today; perhaps less so as a measure of the cutting-edge future of legal tech.

Info & Register Here

February 2017

Berlin Legal Tech Hackathon and ConferenceBerlin – February 8-10The three-day event begins with a hackathon, where lawyers and software developers will jointly identify problems and develop solutions. Accompanied by legal knowledge engineers, lawyers with technical expertise will generate ideas in an open format; teams created around shared interests and the concepts and prototypes will be pitched in a friendly competition. The most convincing and forward-thinking contributions will be awarded by an expert jury. The actual conference – the Berlin Legal Tech 2017 – will take place on February 10. The winners of the hackathon will present their ideas and products and renowned speakers will have the opportunity to give their view on how the digital revolution will affect law and legal practice in the near and far future.

Info & Register Here

March 2017

The British Legal Technology Forum 2017London – March 14Expecting over 1,200 attendees. Topics include: Artificial Intelligence and Law Firm Automation; Blockchain in the Legal Sector; Smart App Technology; Cyber Security; Gamification Platforms for Enhancing Client Engagement

Info & Register Here

ABA TechshowChicago – March 15-18ABA Techshow has a unique feel – as an ABA event, it is much more targeted to lawyers than to IT specialists and technologists. It also has a broader appeal, with programming that is targeted to the entire spectrum including small firms, which tend not to be on the radar at other legal tech events. The conference sessions are full of practical “how-to” sessions, many of them with a peer-to-peer flavor. There’s some attention paid to higher-end cutting-edge tech such as blockchain or artificial intelligence, but the emphasis is more on getting the most out of more mundane productivity tools such as practice management, drafting, and communications technologies.

Info & Register Here

April 2017

CodeX FutureLaw 2017 Stanford University – April 6 CodeX – The Stanford Center for Legal Informatics hosts FutureLaw 2017 at Stanford Law School, the center’s fifth annual convening of academics, entrepreneurs, lawyers, investors, policy makers, and engineers spearheading the tech-driven transformation of our legal system. FutureLaw is well-known for compelling educational content and exceptional opportunities to connect and exchange ideas with legal tech innovators from around the world.

Info & Register Here

Legal Innovation & Tech FestSydney, Australia – April 30 - May 2 A collaboration between the International Legal Technology Association (ILTA) and The Eventful Group, and in association with the Association of Corporate Counsel (ACC Australia). Legal Innovation & Tech Fest is unique because there are no vendors speaking – all content is delivered exclusively by in-house counsel, lawyers, CIOs, and innovation and strategy leaders.

Info & Register Here

Throughout 2017

Evolve Law EventsVarious venues If you don’t have time or money to travel to one of the larger legal tech events, Evolve Law events can be a good alternative. They are generally shorter, informal events, often with a local twist, in various cities around the US.

Info & Register Here

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UK and European Focus

Dispatches from the global legal tech scene: 8 key lessonsBy David Curle

This article originally appeared in the Thomson Reuters Legal Solutions UK & Ireland Blog

Thomson Reuters Legal’s Director of Market Intelligence, David Curle, recently visited innovation hubs and legal tech conferences around Europe, including London, Berlin, and Amsterdam. He shares his key insights about the people and companies already transforming our industry.

Law is doing its best to remain parochial …

The big problem with legal is that it’s very parochial and jurisdiction-specific. US lawyers don’t have a good sense of what’s going on in the UK, much less the rest of the world. You’d think that in the global, interconnected world in which we work, they would; but while it’s true that there are a number of truly global law firms, there’s a larger sense in which legal remains jurisdiction-specific. That’s partly the nature of law: Every country has its own culture, systems, and institutions.

… but technology is challenging its borders

What’s interesting is that technology is changing some of that, and breaking down those barriers. Some of the same drivers are pushing companies all over the world to focus on technology as a way to make legal services more efficient, better quality, and more interconnected. We’ll continue to live in that jurisdictional world, but over the top of that, maybe this technology will mean that we have more in common across jurisdictions than was previously the case. There are centers of activity not just in London, Berlin, and Amsterdam, but also Stockholm, Finland, Estonia, France, and elsewhere in Europe.

Innovators across the world are running into the same problems

It’s fascinating the extent to which technologists with no legal background, or even some of the more forward-looking lawyers in each of these markets, are speaking the same language about their legal systems in different countries. Whether they are German, British, Swedish, or Dutch, they all say the same things: that the traditional law firm is very conservative, bound to tradition, reluctant to take up technology, and protective of its business model and the way things have always been done. It’s remarkable that they all say the same thing in all these different places.

Two categories are emerging: those who want to improve what we have …

When I look at the legal tech start-ups that are attacking this market, there are lots of different categories, but more generally

there’s a mix of solutions that are targeted to lawyers, or to the existing legal services industry, to make it better or more efficient. That includes practice management systems, companies using AI in contract analysis, or data analytics to extract insights – these products are maintaining the existing industry and making it more efficient.

… and those who want to bypass traditional lawyers entirely

There’s also a huge undercurrent of work that is more targeted at the consumer legal market – what we might call the latent market. This is the legal work that doesn’t get done because people don’t have access to a lawyer, or it’s too expensive, or intimidating, working with legal systems that were set up to help lawyers and not people. That’s a large chunk and it’s a global phenomenon. A lot of those solutions are about bypassing traditional lawyers to help people underserved by the legal industry. These are solutions that allow people more directly to interface with courts, government, police, and social services, to get things done without having to engage a lawyer. That includes self-help portals, ODR, making courts accessible to individuals.

Many of our systems were designed to serve lawyers, which is reflected in the language that was used – it’s understandable to a lawyer but makes no sense to anyone else. People don’t know who to call, what to do, or what it means: There are lots of barriers that are cultural and institutional, not technical, which need to fall.

Europe is an encouraging investment environment for entrepreneurs

I was encouraged by a comment from Balderton Capital’s Suranga Chandratillake, who said that “the law looks like a big pile of money that hasn’t changed hands for a long time.” Technology will increase transparency in the industry, which represents an opportunity. He also suggests that Europe has turned into a more welcoming place for entrepreneurs. Silicon Valley has that culture, but has a narrow focus: They’re good at technology but less good at the barriers you face when forcing change in an industry like legal.

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UK and European Focus, continued …

Incremental change can still be radical

I don’t think the impact of legal tech will be a big bang – it’ll slowly gain momentum. There are too many slow-moving institutions in this industry. But they are moving, so we need to think in terms of incremental change. That’s not to say in 10 years we won’t have a radically different industry. AI, for example, is very hyped, and I do think it will have a big impact in parts of the legal industry. But it’s a gradual shift. Today we think of the legal industry consisting of a handful of large and very powerful institutions – courts, legislatures, big firms – whereas in the future I think the whole ecosystem of institutions will become much more diverse. There will be different types of providers with a different specialism, and the clients, especially on the commercial side, will have a lot more to choose from.

Legal tech can learn from FinTech

I attended a Fin(Legal)Tech conference in Chicago recently (see article below), and it made me wonder what legal tech can learn from FinTech. For example, what’s the role of quantitative methods in the law? What was great about the FinTech event was that there were increasing numbers of actual practitioners speaking, rather than the usual professors, evangelists, start-ups, and so on. These were actual practitioners grasping the idea of what’s revolutionary about what they’re doing. Maybe we’ll see more of that, and soon the legal industry, like the financial services industry, can be transformed by applying new quantitative techniques.

Event Reports

Fin (Legal) Tech: A Conference About Law’s FutureChicago-Kent College of Law, ChicagoNovember 4, 2016

The application of quantitative methods to the delivery of legal services was the theme of Fin(Legal)Tech, a conference held at Chicago-Kent College of Law on November 4. As the name of the conference implies, many of the topics covered at the event included attempts to draw lessons from the financial technology world (FinTech), where the application of quantitative methods is much more of a given.

More than just a legal tech conference, however, this was an attempt to really focus on attacking what conference organizer Daniel Martin Katz, director of The Law Lab at Chicago-Kent, calls the predominant, almost pathological aversion to quantitative techniques in the mainstream legal services industry and in legal education. The legal industry is far behind the financial services industry in developing transformational technology, but many of the TED Talk-style presentations at Fin(Legal)Tech focused on the parallels between the legal and financial realms.

The current model for legal services, argues Katz, is that the industry relies on an expert-centered pricing of risk. There is a “cult of one person’s thinking” in the way lawyers assess risk today. Katz would like to broaden the methodology from that reliance on experts, to a reliance instead on crowds and algorithms as ways to assess risk, as practiced in the financial and insurance space.

The wide-ranging conference program was an exercise in identifying applications within the legal industry for the same techniques that FinTech does well: quantitative risk assessments

and business practices, and the use of computing to reduce friction in legal transactions. Key areas covered included:

• Legal Operations Leveraging Data

• The Use of Decision Trees for Measuring Value – using computing techniques to model legal outcomes

• Litigation Finance

• Frictionless Delivery of Law – re-designing public-facing court systems

• “Law as Computation” – blockchain and computable contracts. This was not your usual legal tech conference that focused on new technologies and their transformational effects on the business or practice of law. The overarching focus at Fin(Legal)Tech was not on the technology, but on seeing law in a new way — as a discipline and an industry that, like the financial services industry, can be transformed by applying new techniques.

Those new tools include: measuring and generating data out of transactions; applying analytics to that data; pricing and predicting risk; eliminating friction with new processes; and turning natural-language transactions into computable ones. The innovations and practices documented here, as they become more mainstream, will require lawyers to think more and more in terms of mathematics and computation.

Most of this stuff is here today, and that change of mind-set isn’t something that most legal organizations can delay much longer.

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Event Reports, continued …

Legal Geek ConferenceShoreditch, LondonOctober 18, 2016

Jimmy Vestbirk, the energetic, high-fiving organizer of the sold-out, day-long Legal Geek Conference near the heart of London’s Shoreditch technology district, said at the outset that his goal was to make London the next global legal tech hub.

Throughout a day of fast-paced TED Talk-style presentations, more than 30 entrepreneurs, technologists, practitioners, law firm leaders, and various innovation and start-up funders tried to prove Vestbirk’s proposition. The event was sponsored by Thomson Reuters, The Law Society and Freshfields.

Toward the end of the day, it was Balderton Capital’s Suranga Chandratillake who made the strongest case for the rise of Europe, not just London, as a new center for legal tech innovation. Chandratillake began as an engineer at Autonomy, founded video start-up Blinkx and took it public, and then moved on to become a venture capitalist. A classic Silicon Valley profile, in other words. So what is he doing in London?

Chandratillake said he sees a sea change in Europe’s approach to innovation and entrepreneurship. As Europe has become more friendly and welcoming to start-ups, momentum has built. Successful start-ups have spawned a generation of mentors, advisors, and funders, he noted, adding he sees new life in a number of centers of innovation, including London, Paris, Berlin, and Stockholm. Silicon Valley, by contrast, is a very provincial and narrowly focused place, he explained. It’s good at producing tech for tech’s sake, but doesn’t understand much of the world outside the Valley. In particular, he said, it’s not good at taking on existing markets (like legal) where there are entrenched business models and institutions that need to be dealt with.

To him, the legal industry “looks like a big pile of money that hasn’t changed hands for a long time.” Technology provides a push to transparency and unbundling in markets, and law hasn’t turned that corner yet. It all adds up to what he sees as a very big opportunity.

Aside from Chandratillake’s comments, there was plenty of evidence on display elsewhere during the conference that the UK and Europe are gearing up for a long run of legal innovation. First, there was the event itself. With a level of energy reminiscent of the Reinvent Law events in 2014, the event space at the Old Truman Brewery near the center of the Shoreditch innovation center was packed.

A session on legal tech lessons learned from around the world featured speakers from the US, France, Canada, the Netherlands, and Australia. Jeroen Zweers of the Netherlands described an active legal start-up sector there, despite the resistance or indifference of a very conservative bar. The Dutch Legal Meetup group is 21-months old and has 632 members, and a robust legal tech awards program that just announced its second annual winner, digital signature player SignRequest.

The meaty parts of the day were provided by sessions on artificial intelligence and blockchain, with practitioners, vendors, and early adopters sharing lessons about where those technologies will bring the industry in the future. Sessions on innovation, diversity, and investment explored the human and financial infrastructure needed to support tech hubs like the one emerging in London.

Does this all sound familiar? Yes, Europe is at the stage where the US legal tech sector was in about 2012 or 2013. The same types of eager entrepreneurs are eyeing an inefficient market, the same funders are trying to gauge the size of the opportunity, and the same industry insiders are trying to estimate the pace of change and the level of its impact. The same hype, and the same warnings against hype.

Vestbirk might get his wish to make London a global legal tech hub, but London will have lots of company in what is becoming a global wave of legal innovation.