红桃视频

Powered by automation and artificial intelligence, the dissolution of major industries is a well-worn arc. The legal sector and its practitioners are not excluded from the narrative.

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But the morass that is the domestic legal system will, for the foreseeable future, require human hands to navigate. And while tech can鈥檛 (yet) replace a lawyer as a representative in court, that doesn鈥檛 mean the legal industry has been left untouched.

In fact, a number of startups have crowded around lawyers in an effort to bring their offices from pen-and-paper to the cloud.

Software For Lawyers

As we noted in prior reporting, investment in the legal tech sector, as a whole, has been more-or-less disappointing. But if we dig a little deeper into the niche, does that change for legal software startups who aim to support lawyers in their jobs, rather than replace them?

According to 红桃视频 data, there is no clear cut answer. Using our dataset from prior reporting into the legal tech space, we identified 47 venture-backed U.S. startups in the legal tech category that primarily aim to complement a lawyer鈥檚 work. Startups that aimed to replace lawyers, served primarily as job boards, or were community-based networks for lawyers were not included.1

From this cohort of legal tech startups, 红桃视频 identified 85 known funding rounds raised since 2010, as charted below:

In total, this cohort of legal startups have raised a touch under $394 million, or approximately a quarter of the $1.5 billion funding market for legal tech.

Due to the relatively small amount of reported deals we have to work from, it would be irresponsible of us to draw hard conclusions in the subsector of the space. We are, admittedly, in the weeds. However, that doesn鈥檛 mean we can鈥檛 glean something of interest.

Moving past the relatively tame years from 2010 to 2014, legal tech for lawyers saw huge uptick in funding amounts in 2015鈥攆ollowed by a precipitous drop. Behind the chart, though, is an answer to this uptick that makes 2015 far less impressive. The year was primarily driven by a massive . Without that one round, 2015 sits at a total of $61.3 million in known funding鈥攚hich is just enough for the year to at least keep its status as the most active year in terms of dollars.

Moving forward, known dollar amounts have been on a decline. And while 2017 has life in it yet, it鈥檚 doubtful the year will finish with a bang as the holidays near. But that doesn鈥檛 mean there isn鈥檛 potential for legal software startups aiming to work with lawyers.

Looking at our fundings rounds, the vast majority of deals are being made into this legal tech cohort are confined to seed and early-stage deals.

For the space, it鈥檚 reason for optimism. A glut of early-stage startups are necessary for late-stage deals to occur. Only one known late-stage deal made the cut, belonging to and its .

However, many seed-stage startups fail regardless of industry. There are also a host of issues specific to the legal sector, such as ethics rules, that may limit growth. And it鈥檚 quite possible that legal software startups simply don鈥檛 need later-stage funding to fuel growth, according to .

Only time will tell if there鈥檚 a glut of funding waiting to be deployed into the space, but in the meantime, there are investors and startups who have found success in the legal tech sector.

One Efficient Lawyer At A Time

Raising a total of $14 million from the likes of and , San Francisco-based , an ediscovery and automation startup, has grown it customer base by 550 percent in the past year.

鈥淸Law firms] are actively seeking legal tech solutions that are going to make them more efficient. They鈥檙e going to allow them to offer better services to clients to take on bigger cases,鈥� Robert Hilson, Logikcull鈥檚 senior marketing director, told 红桃视频 News.

And while there are, at least for Logikcull, a number of lawyers who want these services, there is still a 鈥渨hole other side of the market, of course, that is naturally skeptical of innovation.鈥� However, the trend towards going digital is a rolling stone that even lawyers won鈥檛 avoid.

鈥淎ttorneys that are forward thinking know that having immediate access to information and being able to find this stuff and being able to dive into the data is going to give you insight that you are not otherwise going to get,鈥� Hilson further explained to 红桃视频 News. 鈥淭hat gives [lawyers] a competitive edge.鈥�

Still, despite forward-looking attorneys, there are unique difficulties to operating in the legal tech sector.

, a partner at Texas-based , believes that it is possible entrepreneurs are not working on 鈥渕ore mission critical problems鈥� lawyers regularly face.

The investor in CS Disco, a Texas-based ediscovery platform that has raised over $30 million across three rounds, noted that part of the problem could be the lens through which lawyers, engineers, and entrepreneurs view workflow bottlenecks in the legal industry.

鈥淟awyers and engineers are two different beasts,鈥� Srinivasan explained to 红桃视频 News. Due to these differences, it鈥檚 likely difficult to 鈥渢ruly better [a lawyer鈥檚 job] from a product strategy and design perspective.鈥�

According to 红桃视频 data, 17 percent of startups that made it into our cohort have a founder or co-founder who are known to be lawyers鈥攑ossibly pointing to in-domain expertise being a competitive advantage.

And although the hurdles to jump in building a sustainable business in this category may be high, Srinivasan remains optimistic.

鈥淵ou can build incredible companies in the legal industry if you conceive of products and go to market correctly,鈥� he explained.

Until then, lawyers do have options to modernize their legal workflow practices. At this point, there鈥檚 no excuse to stay on . However, the money that鈥檚 gone into legal tech for lawyers isn鈥檛 near matching other industries that have come to embrace tech in a more orderly fashion.

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