Two years ago, in a post here titled, A Time of Unprecedented Innovation in Legal Technology, I noted that Angel List, a site that lists startups of all kinds, included 412 companies identified as legal startups. Today, the number of legal startups included at Angel List is 1,094. That is nearly threefold growth in the number of legal startups in just two years.

Perhaps I spoke too soon two years ago. The legal industry continues to see innovation at a pace that far outdistances anything we’ve seen before. We can conjecture as to why this is, but I think two factors play a central role:

  • The legal industry is a significant market that is ripe for innovation and disruption, and so is alluring to many entrepreneurs.
  • The price of innovation is cheap, in that virtually anyone with a good idea and a laptop can bring a product to market.

Only a small percentage of these startups will stand the test of time. But the number of startups attests to the variety and creativity of new products being brought to the legal market. Quantity, of itself, isn’t necessarily a good thing, but the more milk you have, the more cream that will rise out of it.

  • Legal Start-Ups take note:. A proposed Discussion Paper from the ABA Commission on the Future of Legal Services is inviting comments on a proposed regulatory scheme that would impose restrictions on legal software publishing companies and legal application developers that serve the public directly. [Called in the Paper unregulated Legal service Providers }.

    You can read the paper here:

    If I were a venture capitalist I would stay away from an industry that is proposing these kinds of restrictions. If you are interested in continued innovation in the delivery of legal services, I suggest that founders and managers of legal start-ups review and comment on this Issue Paper as some legal start-ups would be directly affected if the ideas in the Issues Paper reached the level of a regulation or policy.

    This is another attempt to expand the organized bar’s power and control over competitive threats to the organized bar’s hegemony, rationalized as protecting the “public interest.”.

    If you care about the future of your company, I suggest that you submit comments in writing to the Commission before the April 28 deadline. See:

  • Very interesting points Richard. But over time — the market forces will prevail which a knowledgeable VC will take note of. It’s actually an advantage that others might be scared off by the threat of regulation which — if the NC Dentists indicates — could be more about FUD than anything else. The ABA can’t regulate away anymore than they can a LegalTech startup which does not provide advisory services.


  • Jim Longo

    Great observations Robert. The legal industry, while ripe for innovation, has been fending off the structural re-organization it is so needs for decades. Richard E. Susskind has been calling for these disruptive changes in his thoughtful books since 1996. The market forces here in the US are eroding the legal industry slowly, but unceasingly. My observation is that very few legal technology companies are able to bust through the glass ceiling of $20m in revenues, far short of any VC hopes of big payout.

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