Has Legalist finally found its niche? Back in April, I reported here that the site’s founders, both Harvard undergraduates, were preparing to launch a website that would rate lawyers based on publicly available court records. Then, in July, Techcrunch reported that the site had changed its focus, and instead planned to become a sort-of Google for court records, scraping court records to make them universally searchable.

Now, Legalist has changed direction again, this time to focus on “data-backed litigation financing” — using algorithms to predict case outcomes and determine the best cases in which to invest. And they’ve got the backing of billionaire Peter Thiel, whose foundation recently invested $100,000 in the startup.

According to Legalist’s website:

Unlike other litigation finance companies, Legalist uses data-backed methods to select, vet, and invest in litigation. Our algorithms trawl tens of millions of past court cases to accurately and efficiently assess litigation risk. As a result, Legalist is able to make faster decisions, on more cases.

On Aug. 15, I emailed Legalist co-founder Eva Shang after I noticed the change in direction for her site. She never responded to me, but both Gizmodo and Legaltech News have more information on the site’s new focus.

I’m not sure if Shang is upset with me. After my post last April, she wrote asking me to take it down because they were not yet ready to publicize the site. I declined, noting that the toothpaste was already out of the tube and that her site had already been publicly listed elsewhere, including on Angel List.

I wanted to ask Shang about the July Techcrunch report about Legalist becoming a Google for court records. At around that same time, the Massachusetts court system suddenly imposed a restriction on attorney and news media access to electronic court records, barring anyone from viewing criminal records online except for attorneys who have entered an appearance in a case.

The court’s explanation for this was that the move to cut off access became necessary after it discovered that “multiple Internet-based entities have been systematically” downloading data on cases.

I wanted to ask Shang whether this cut-off by the courts had anything to do with Legalist or with its change of direction to litigation finance.

As for Legalist’s new focus, it is going after a market that is not currently well served by other companies, according to Legaltech News:

Legalist’s target client—smaller companies with modest commercial claims—are also quite distinct from the litigation finance offerings currently available. The size of the investment in plaintiff companies—$75,000-$1 million per case—has not been well served. Large commercial funders invest a minimum of $2 million per case, and aren’t interested in claims with an expected payout below $25 million unless they’re part of a portfolio. Personal injury-focused litigation funders rarely contribute more than $50,000 to a plaintiff, because recoveries rarely rise beyond the low nine figures.

We’ll continue to watch with interest to see how this startup evolves.

  • avon

    It seems like Legalist hasn’t noticed – or just doesn’t believe – the ubitquitous phrase lawyers use in offering their services: “Past performance does not necessarily indicate your outcome” or some such language.
    In any event, it seems to me that a cutoff of access to court records would hamstring their “data-backed” algorithms process just as much, whether it’s used to determine litigation funding or it’s used to rate lawyers or to offer universal searches of court records.
    If I were Shang, I too would be upset at the embarrassingly public exploration in search of a business model to launch.
    But, as an attorney, I’m just glad there’s no longer a prospect of her algorithms rating us!

  • Professor B.

    I guess they are trying…. Yet, another problem with this plan is the reality that the vast majority of cases don’t go to trial. They settle and many for undisclosed amounts. With such vast amounts of information not available, what is the algorithm going to predict other than the fact that the case is likely to settle. That’s not news. If the case is good enough for a lawyer to have taken it and invested time in it, everybody knows the case is likely to settle! And there are so many variables that go into two parties deciding to settle, many of them known only to the lawyers and protected by the duty of confidentiality. How is the algorithm going to factor that in? Like I said, you have to admire their resolve to find a way to make it, but I am skeptical…

    • Bob Ambrogi

      Good points. As i explained in my original post about them, I raised a similar question when I spoke to them several months ago about their lawyer-rating algorithm, which was also to be based on trial results. How would their algorithm account for settlements? Their answer was that, if a lawyer had handled a high number of a certain type of case, even if all the cases settled, the algorithm would presume that the lawyer is better at those cases than one who’d handled only one or two. That formula doesn’t translate to litigation financing.