Funding Rounds & AI Innovations
Yesterday saw significant movement in legal tech with fundraisings, acquisitions, product releases, and vital rulings that could shape its future. Tech providers continue targeting efficient, secure data management while underlining the importance of nuanced, legal understanding.
Welcome to your Law Tech briefing for Aug 18th, 2023, covering what happened in legal tech recently.
TLDR; Listen instead:
Have less than a 1 min? Three takeaways from yesterday
- Embrace AI in Legal Roles: With numerous companies including 11x.ai and The Contract Network, securing substantial funding to develop AI for legal services, it's clear that AI is not just the future, but the present of the industry. Legal professionals should seek to understand AI tools, particularly in areas like contract management and automating basic tasks.
- Stay Informed on Legal Rulings: The federal court's ruling that employers can reduce PTO without falling foul of the FLSA could have far-reaching implications for employment disputes. This underscores how crucial it is for legal workers to stay abreast of court rulings and legislative changes.
- Prioritize Cybersecurity and Data Management: The release of new products aimed at secure document storage shows how significant cybersecurity and data management are in the legal profession. Law firms should strive to manage their data efficiently while ensuring that it remains secure from potential threats.
Briefing
Here's what happened in legal tech recently...
Several companies announced significant fundraisings and new product releases alongside some vital legal rulings and directives. Here's what you need to know.
Overview
From seed to acquisition, yesterday saw some big movements in capital. 11x.ai, a London-based startup developing AI workers for tasks in sales and HR, secured $2m in a pre-seed funding round. On the other end of the scale, Thomson Reuters completed its $650 million acquisition of Casetext, a legal research and AI company.
Meanwhile, The Contract Network, an AI-powered contract collaboration platform, raised $8m in seed funding. The day was also glut with product updates and releases. Agiloft introduced AI Trainer, while Clearbrief unveiled two AI features. Citrix's ShareFile tailored its secure document storage and sharing solution for legal with features such as security threat detection alerts. Autologyx has upgraded its operations platform Catalyst to integrate advanced document intelligence powered by Zuva.
In regulatory news, a federal appeals court ruled that employers can reduce workers' PTO without breaching the FLSA. Such a decision could significantly impact employment disputes.
Trends
Governance and cybersecurity continue to dominate discussions, as does AI's ever-growing impact on legal practices. Several companies yesterday introduced products that link these two trends. Agiloft's AI Trainer, for example, enables non-technical legal and corporate professionals to instruct AI models in identifying specific key terms and clauses within their industry. Products like these suggest the broader trend of law firms seeking efficient, secure ways to manage data and automate processes, especially in contract management.
Analysis
Two significant developments yesterday could shape the future of legal tech. One was the confirmation of Thomson Reuters's acquisition of Casetext. It indicates that heavyweight companies are increasingly investing in legal tech AI platforms, underlining its rising importance in the industry. On the other hand, the federal appeals court ruling on PTO shows that legal tech must not oversimplify the complexities of human resources and labour law. AI-driven legal tech tools need to be nuanced and up-to-date on current legislation to prevent misinformation or breaches.
Overall, yesterday's events confirm the continued strong interest in legal tech, with continued investment and development. However, they also underscore the need for these tech tools to be robust in their understanding of the law and its complexities. As the landscape continues to evolve, making informed, forward-thinking decisions will be crucial for professionals in the legal tech industry.
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Key stories
Thomson Reuters Completes Its $650M Acquisition of Casetext (LawSites)
The closure of Thomson Reuters' acquisition of AI legal research firm Casetext, valued at a staggering $650 million, marks a significant chapter in this summer's legal tech narrative. The move, according to Thompson Reuters CEO, Steve Hasker, aims to expedite advancements in generative AI, transforming professional practices and enhancing productivity. For Casetext, becoming part of the Thomson Reuters family will amplify its scale and accelerate its vision to shape the future of legal professionals via AI. As the sector increasingly pivots towards technology, this transition could potentially open doors for innovative strategies that could enhance legal research accessibility and efficiency.
Practicing Law in the Age of AI (Attorney at Work)
Law practitioners and many industries are grappling with the threat of AI taking over jobs. However, Curt Brown, co-founder of Overture Law, insists the time is ripe to embrace the technology rather than dread it. Brown suggests that AI's capability of producing more efficient results than human lawyers shouldn't be feared, but rather seen as a standard to beat. He encourages law practitioners not to resist technology but to utilize it to optimize their practice and create more effective legal services for their clients. In an era where AI is inescapable, Brown highlights how leveraging AI and improving responsiveness can be the legal industry's trump card against the perceived threat. He also highlights referral networks as unexploited revenue opportunities.
A recent order by Richard E. Meyers II, Chief US District Judge in North Carolina, could create complications for law firms leveraging automated docket management tools. The judge has ordered attorneys to cease using services of companies like PacerPro, DocketBird, CourtDrive, and RECAP. The issue raised pertains to the mishandling of documents that should be designated as "under seal," which are subsequently distributed and later sealed. This misstep, however, appears not to be an inherent flaw of these legal tech platforms but a human error — presumably an oversight by a lawyer or clerk. It raises important questions on the balance between tech-enhanced efficiencies and the need for careful manual supervision to prevent such issues and suggests that there are still systemic kinks to iron out in these nascent technologies in the context of legal protocol.
All stories
London-based startup 11x.ai has raised $2m in a pre-seed funding round led by Project A Ventures. The company is developing AI workers for tasks in sales development, HR, and talent acquisition. Its first digital worker, Alice, is a sales director representative. 11x.ai is also creating a no-code platform, Platform X, to facilitate the building of a digital workforce. The platform is set to launch within two months. The firm plans to hire 10 new developers by month-end.
Annette Choti, a lawyer and digital marketing expert, has written an article on the importance of Google's Core Web Vitals for law firm website optimization. The article, available in the LawNext Legal Technology Directory's resource library, explains how these user experience-focused metrics can influence a firm's Google ranking. Choti offers strategies for website optimization in her piece.
Contract lifecycle management firm, Agiloft, has introduced AI Trainer, a product designed to enable non-technical legal and business professionals to instruct AI models in identifying specific key terms and clauses within their industry or organization. The tool aims to improve automation in the contract process, allowing users to extract necessary data points. The AI Trainer is immediately accessible to Agiloft customers, but requires an extra purchase for the AI module.
Jay Baer's book, "The Time to Win," emphasizes the link between speed and revenue, suggesting that 66% of customers value quick responses as much as price, and 50% hire the first respondent. Baer recommends businesses improve their response time and consider a premium "fast pass" service, as 25% of customers would pay more for quicker service. His insights could help businesses gain a competitive edge and increase revenue.
Is Your Firm’s Cybersecurity Strategy Keeping Clients Away? (Technology Archives - Above the Law)
The article underscores the importance of robust cybersecurity strategies in law firms to prevent potential client loss. It emphasizes on the need for legal professionals to be prepared for potential security breaches. The article also refers to an anonymous survey to assess industry standards in cybersecurity, offering participants an opportunity to win a $250 gift card.
The complexity of legal technology stacks is causing inefficiencies in law firms. To counter this, firms are using software integrations like Tiger Eye Workspace Automate and Tiger Eye Send and Sign, which streamline workflows by enabling different systems to share data. These integrations reduce time wastage, increase productivity, and improve data security.
Mattern, a legal operations consultancy, has initiated the 2023 Information Governance Survey to offer law firms data on industry-wide data retention practices and insights into common challenges in implementing information governance policies. The survey will focus on data privacy, regulation, and compliance issues. This move was prompted by the observed lack of insights firms have concerning retention policies.
Curbing AI hallucinations before they start (Legal Dive - Latest News)
Satisfi Labs CEO, Don White, has cautioned businesses using generative AI tools to fully understand their limitations and data sources to prevent errors. White emphasized the need for thorough testing of these tools to ensure accuracy and consistency with their data sources. He also underscored the crucial role of in-house legal teams in reducing liability by drafting terms and conditions for AI tool usage.
How to avoid FLSA violations when requiring workers to use PTO (Legal Dive - Latest News)
A federal appeals court has ruled that employers can involuntarily reduce workers' paid time off (PTO) without breaching the Fair Labor Standards Act (FLSA). The court stated that PTO is a benefit, not a wage, and therefore not subject to FLSA deduction rules. This decision could impact situations where PTO is used to uphold FLSA exemptions and may lead to disputes if employers do not clearly communicate PTO policies to their employees.
The Contract Network, an AI-powered contract collaboration platform, has raised $8M in seed funding led by Tusk Venture Partners. Co-founded by former Seal Software president, Jim Wagner, and ex-Blackstone CTO, Bill Murphy, the platform converts contracts into data, offering context and insights for every amendment. The Contract Network, which can be paired with existing Contract Lifecycle Management platforms, seeks to simplify contract negotiations.
New Knowledge Management and Innovation Conference for Legal to Debut in October in NYC (LawSites)
The Knowledge Management & Innovation for Legal Conference, a two-day event for legal professionals, will take place in New York in October. Organized by Patrick DiDomenico and Joshua Fireman, the event will offer sessions on AI implementation, knowledge management efficiency, and legal tech adoption. The conference aims to provide practical skills and networking opportunities for professionals of all skill levels.
Sharefile Makes Renewed Push Into Legal Market, With New Features Designed For Law Firms (LawSites)
Citrix-owned ShareFile is targeting the legal sector with its secure document storage and sharing solution, ShareFile for Legal. The platform offers law firms a secure, collaborative client experience with features such as security threat detection alerts, task management, and native integrations with QuickBooks and Salesforce. It also supports quick client onboarding, secure document management, collaboration, and automated workflows. Pricing starts at $50 per month for five users.
Seattle-based legal tech firm, Clearbrief, has unveiled two AI-powered features to improve its services for legal professionals. The Hyperlinked Timeline feature allows users to construct case timelines in Microsoft Word, linking to source documents supporting the events. The Ask Your Docs feature lets users ask specific questions of their documents, with AI providing suggested answers and links to source documents. Clearbrief is compatible with document management and e-discovery platforms including NetDocuments, iManage, and Relativity.
Displaying and Evidencing Contract Terms in a Post-Visual Era (DennisKennedy.Blog)
The Michigan State Law Review Forum has published an article discussing the complexities of non-visual contracts in the era of the Internet of Things and artificial intelligence. The author recommends simplifying contract terms, adopting medium-specific strategies, standardizing terms, promoting transparency, and exploring hybrid solutions. The proliferation of voice-controlled devices, code-level contracts, and invisible platform contracts calls for a rethinking of conventional contract procedures.
ECFX Should not be Impacted by Federal Judge Meyer’s E.D.N.C. Standing Order 3 (Dewey B Strategic)
ECFX CEO, Dan O’Day, criticizes the Eastern District of North Carolina’s Standing Order 3, claiming it unfairly shifts blame to lawyers for issues arising from incorrectly published documents. He maintains that ECFX, which does not store attorney credentials, download sealed documents, add extra recipients on accounts, or resell case information, is not subject to the order. O’Day also stresses ECFX's strict security measures.
Thomson Reuters has acquired legal tech firm Casetext for $650 million. Casetext, known for using AI and machine learning to enhance efficiency for legal professionals, will bolster Thomson Reuters' AI integration efforts. The deal will also support the company's partnership with Microsoft for a legal drafting solution. This acquisition aligns with Thomson Reuters' pledge to invest over $100 million annually in AI integration.
Autologyx has upgraded its operations platform, Autologyx Catalyst, integrating advanced document intelligence powered by Zuva. This will allow customers to create efficient workflows and boost productivity by using Zuva's AI to extract data from documents and return it in a structured format. The collaboration between Autologyx and Zuva aims to offer top-tier contract AI within a shared workspace.
Fulcrum GT has introduced RAPIDxâ„¢, a new feature of its Snap Direct platform, aimed at transforming legal service delivery. RAPIDxâ„¢ is designed to redefine the sourcing, management, and transaction of legal services by offering a transparent, standardized method, removing intermediaries and offering comprehensive analytics. The launch has attracted interest from several blue-chip companies.
Getting ahead of the AI culture shift (Legal Dive - Latest News)
Global professional services firm, Genpact, is integrating generative AI into its business strategy through a partnership with Microsoft's OpenAI services. The move, led by a cross-functional team including the CEO and CFO, is aimed at driving team integration and making use of AI's potential to transform the business landscape. Genpact underlines the importance of responsible AI use and a cultural shift within the organization.
How in-house legal teams can use cloud marketplaces to purchase tech (Legal Dive - Latest News)
Legal departments can optimize their technology budget by using unspent IT funds to acquire new legal technology applications from cloud marketplaces. These platforms offer a variety of pre-set software solutions, ease deployment and integration, and ensure trusted solutions. Through cooperation with IT departments, legal teams can manage corporate technology expenses, increase efficiency, and simplify procurement.
