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Feature

A Positive Disruption: The Transformation of Law Through Technology

Illustration by The Heads of State

The bar exam was looming, but it was hard to focus on studying. Nik Reed and Daniel Lewis, both Stanford Law Class of 2012, had other things on their minds—like pitching their company, Ravel, to a potential investor. That excitement coupled with post-graduation celebrating was making their last hurdle a struggle.

Then the call came in.

“We got funding three days before the bar exam,” says Lewis, who took the test anyway.

Feature illustrationThe launch of Ravel put the two on a career path in the law that they had not anticipated—legal tech—something that just a few years earlier might not have been possible to pursue at Stanford. Joining the ranks of mostly lawyers and engineers who are seeing potential for the transformation of law through technology, the two founders have high hopes for Ravel, a search, analytics, and collaboration platform that shows legal research through innovative visualization technology. Currently in beta, test users at law schools, law libraries, and law firms are using it to “see” search results that show the most relevant legal cases, citations between cases, and the evolution of legal principles over time—in very cool constellations.

Reed and Lewis have lofty goals—their aim to build tools that help lawyers better understand the law with nuance and sophistication and to make the law more accessible for non-lawyers as well.

The zeal that people in legal tech have for their work was on display at a recent Stanford Center for Legal Informatics 
(CodeX) conference, where in a packed conference room the conversation took on an almost missionary tone. Speakers, who 
included a range of legal tech experts from venture capital investors to company founders to code and design experts, enunciated the challenges and the opportunities they see in the field.

CodeX, a multidisciplinary legal technology research center at Stanford co-directed by Roland Vogl, JSM ’00, lecturer in law, and Michael Genesereth, associate professor in computer science, has become a common denominator for legal tech innovators, many of them faculty who have developed projects with the center, others students and alumni who joined as fellows after launching their own projects and companies.

The primary mission of the center is to explore ways in which information technology can be used to enhance the quality and efficiency of the legal system while decreasing its cost. And its work does not focus just on the legal profession. The center’s goal is to explore legal technology that empowers all parties in our legal system. Vogl, who is also the executive director of the Stanford Program in Law, Science & Technology, explains that such technology should help affected individuals find, understand, and comply with regulations; aid enforcement organizations in monitoring and/or enforcing compliance; and help regulatory bodies analyze proposed regulations for cost, overlap, or inconsistency.

The center’s core focus is on computational law, an 
approach to legal informatics based on the explicit representation of laws and regulations in computable form, which can be used to “embed” the law in systems and automate certain legal decision-making processes. Think TurboTax. But researchers in the field see huge potential for this technology touching all areas of life—from health care to safe driving to criminal prosecution. Vogl points to the self-driving car as an interesting 
application opportunity for computational/embedded law. The car must “know” driving codes and laws in order to navigate the roads safely.

It’s a bold vision for what is being described as a disruptive time for law, when a confluence of circumstances is forcing a profession steeped in tradition to join the Internet age—to innovate, to become more accessible and transparent. The economic downturn that hit lawyers hard is perhaps the most pressing factor, with unemployment and pressure on billable hours just two of many issues forcing introspection—and innovation.

With the legal profession still grappling with the great 
recession, why are the lawyers in the legal tech space so 
excited? The disruption they speak of is a positive one. A new generation of lawyers is looking at the profession in a different light—through the lens of technology that they have grown up with. As legal tech companies continue to launch, offering everything from coordinated divorce services to more thorough discovery tools to online legal services and research platforms that sort through complex data, some JDs are looking ahead—not only welcoming the changes but instigating them.

 


“We really are in a period in history when you can take the law and you can do with it what firms have done with every other area of practice, which is to try to ‘rationalize’ it,” says Mark Lemley (BA ’88), William H. Neukom Professor of Law at Stanford Law School, director of the Stanford Program in Law, Science & Technology and the LLM LST program. “Computer technology has gotten to the point where we can parse and analyze big data in a fashion that we just couldn’t before. And, besides, the raw material just wasn’t online—it wasn’t available.”

While much of the innovation in legal technology is coming from practitioners, it is also starting in academic research and classrooms at Stanford Law School where scholars and 
students live, breathe, and study the law, often digging deep into empirical data for their research. But now, with new technology and drastically improved computer capability for data storage and retrieval, legal scholars are able to more easily share their data. Research that might have ended as a published 
paper can now serve a wider purpose. Increasingly, legal 
scholars are thinking about the afterlife of their research—and even starting companies with it.

By about 2005, Lemley was growing frustrated with what he calls the “weather prognostication” in IP law.

“People would make all kinds of claims in policy debates that were presumably empirically testable but were radically different from each other, you know with one saying patent suits are 50 percent of all lawsuits and another saying, no, it’s 1 percent,” says Lemley.

CodeX Co-Director Roland Vogl, JSM ’00, LawGives Co-Founder Tony Lai, LLM ’11, and Law Dojo Founder Margaret Hagan, JD ’13

CodeX Co-Director Roland Vogl, JSM ’00, LawGives Co-Founder Tony Lai, LLM ’11, and Law Dojo Founder Margaret Hagan, JD ’13 (photo by Lenny Gonzalez)

So Lemley decided to create a database with reliable information about IP lawsuits—because there wasn’t one. He started the Stanford Intellectual Property Litigation Clearinghouse (IPLC) as an academic research project to map every electronically available patent litigation event and outcome, aiming to bring openness and transparency to IP law and better inform future policy. Modeled on the Securities Class Action Clearinghouse, which was started by Joseph Grundfest, JD ’78, W. A. Franke Professor of Law and Business, and with the expert help of CodeX, IPLC became a sophisticated database. And Lemley soon realized it would require significant management to 
continue.

“We started this in 2006, and the database has now got upwards of 150,000 cases. So managing all of those cases and all of the docket information in them clearly couldn’t be done by hiring a couple of interns,” says Lemley. So the project was launched as a separate legal technology company in late 2008 with outside investment. Today, it is a thriving company called Lex Machina, Inc.

These projects are often time-consuming, the data requiring significant human input and oversight—a labor of love perhaps best suited to academics. For Michael Klausner, who is working on a project similar to IPLC, it’s been a five-year affair.

“The amount of effort required for this is really enormous, with lots of research assistant and IT time,” says Klausner, Nancy and Charles Munger Professor of Business and professor of law. He set out to gather data to look at how securities class actions reinforce SEC enforcement. “Some of what we’ve found is surprising. For instance, I’ve discovered that half of class action settlements occur before discovery—at the pleading stage. This is contrary to the standard thinking that these are long drawn-out cases with lots of discovery,” he says.

 

Judicata co-founders Adam Hahn (BS '08), Blake Masters, JD '12 (BA '08), and Itai Gurari at their San Francisco office Photo by Kyle Kirchhoff

Judicata co-founders Adam Hahn (BS ’08), Blake Masters, JD ’12 (BA ’08), and Itai Gurari at their San Francisco office
(photo by Kyle Kirchhoff)

Klausner is writing about his findings and that’s where it all would have ended—before the advent of big data storage. “I would have written my two or three papers and the data would never have been seen again,” he says. He and his project manager, Jason Hegland, think there may be broader interest in and use for the information and data retrieval software that has been built around it, academically and perhaps commercially, so they also are talking to potential investors.

“You don’t usually think of a law school as being a source of entrepreneurial activity and innovation, but Stanford Law is,” says Karl Harris, JD ’12.

Like so many Stanford Law students, Harris, who has an MS in computer science, already had an engaging career when he decided to pursue legal studies. As a founding vice president of product management and engineering for Flurry, Inc., a mobile analytics and monetization platform, he had worked at the heart of tech innovation. He came to Stanford Law for a simple reason: He wanted to study the law. He did that, and much more.

“I was the first class to be fully on the quarter system and it was awesome,” says Harris, referring to the switch from semesters to quarters that aligned the law school’s academic calendar with Stanford’s and allowed law students to take courses everywhere on campus. One class, Strategic Management of Technology and Innovation, co-taught by XSeed Capital General Partner Robert Siegel, MBA ’94, brought Harris full circle. He joined XSeed as a fellow during his 3L year to help build relationships with XSeed and Stanford, including the law school. He helped XSeed connect with two Stanford academic/CodeX projects: SIPX, the Stanford Intellectual Property Exchange, an online service that manages copyrights and delivers digital documents for the higher-education marketplace, and Lemley’s Lex Machina. Both are now funded by XSeed Capital.

CodeX Conference Panel "Legal Disruption: Why Now? Why Here? What Next?" l-r: Tim Hwang, Partner, Robot Robot & Hwang LLP, Richard Komaiko, Co-Founder AttorneyFee, Dan Shapiro, Co-Chairman Casemaker, Eddie Hartman, Co-Founder Legal Zoom, Joshua Walker, Counsel Simpson Thacher

CodeX Conference Panel “Legal Disruption: Why Now? Why Here? What Next?”
l-r: Tim Hwang, Partner, Robot Robot & Hwang LLP, Richard Komaiko, Co-Founder AttorneyFee, Dan Shapiro, Co-Chairman Casemaker, Eddie Hartman, Co-Founder Legal Zoom, Joshua Walker, Counsel Simpson Thacher

“It was awesome to be part of a VC firm that was interested in learning about law and legal tech and developing the relationships to do that,” says Harris, adding that XSeed may be a bit ahead of a curve. “It is one of the investors that sees there is a ‘perfect storm.’ The financial crisis that caused a shift in the way that clients consume legal services and how legal services are delivered is causing a big change, so there’s going to be a lot of innovation in that space.”

From the moment Harris arrived on campus and was introduced to legal research tools he could see that there might be a role for him in innovating in law and technology.

“I was at Flurry working in the mobile space when the iPhone and Android platform came out. It was all about pushing the envelope and making software so that people would find it super easy—so that they wouldn’t even have to think about what they were doing,” he says. “And then I go to law school and the technology tools require multiple training sessions just to figure out what you can do, much less what you want to do. I could see right away that the industry was going to change and change in a major way—that it was ripe for disruption.”

Harris is now the VP of products at Lemley’s Lex Machina. And he is excited about working in technology that’s complex—much of it developed at Stanford, such as natural language processing tools and machine learning tools. With this technology, the Lex Machina crawler can extract data and documents from all 94 district courts via PACER, ITC’s EDIS site, and the PTO site and, automatically, capture every docket event. Key district court case documents and every ITC document are downloaded and converted by optical character recognition (OCR) to searchable text and then stored as a PDF file.

 


Blake Masters, JD ’12, quotes U.S. Supreme Court 
Justice Holmes as inspiration for his legal tech startup, 
Judicata:

“For the rational study of the law the black-letter man may be the man of the present, but the man of the future is the man of statistics and the master of economics.”

Law, says Masters, is largely an exercise in prediction. “Given a dispute, and given all those that have come before it, what is the court likely going to do? How can lawyering impact 
legal outcomes?” he asks. “In 1897, Justice Holmes took a guess about what was to come. Today, substitute computer 
science for economics, and we aim to prove him right.”

Masters’ story is very much a Stanford one: After graduating from Stanford (BA ’08), he was an early employee at Box, then a small startup, before returning to Stanford for law school. Studying law in the heart of Silicon Valley, Masters found, offers all sorts of opportunities. Early in his 3L year, he linked up with Judicata’s future co-founders Adam Hahn (BS ’08) and Itai Gurari, who together decided that they could—and would—build legal research and analytics products to 
“dramatically advance what lawyers can do.” That involves 
organizing and understanding all case law by using highly 
specialized parsing and algorithmically assisted human 
review—“mapping the legal genome,” as Masters describes it.

Prominent lawyer-investors have taken great interest in 
Judicata’s approach; the company raised $2 million from Peter Thiel, JD ’92 (BA/BS ’89), in mid-2012.

“We’re thrilled to have such visionary investors who just get what we’re doing,” says Masters. “They almost intuitively understand how we can leverage the data we generate to build tools for lawyers that are an order of magnitude better than 
existing offerings.”

Masters points to Palantir Technologies as a rough analogue, explaining that Palantir’s software can’t tell a CIA analyst who is a terrorist but it can identify patterns and make sense of massive amounts of information to help the analyst make that call. “Great legal technology,” says Masters, “will do the same—
assist lawyers in exercising their skilled, human judgment.”

Masters and his team are quick to acknowledge the difficulty of their task. But, in their view, it’s precisely the kind of big swing that the legal industry needs to move forward.

“Legal technology is at something of a crossroads. On one hand, it is notoriously inefficient and outdated and has been for quite some time. On the other hand, to use Marc Andreessen’s parlance, ‘software is eating the world,’ ” Masters says. “Truly innovative technology will empower lawyers to argue better and do more than ever before. The only questions are who will build it and when. We’re betting on us and now.”

 


Lewis and Reed have a similar goal.

“It was during my 2L winter when I first thought of Ravel,” says Lewis. “I was doing independent research for a nonprofit and I wanted to see how the case I was working on fit into the big picture.” He wondered: What were the other important cases I needed to know about? What were the smaller cases that circled around? Then “Ravel took shape in my mind, as a visual process,” he says.

Lewis and Reed invested a lot of their time during their 2L year working with Stanford Law’s Afghanistan Legal Education Project, delving into the complicated task of writing textbooks for Afghan law students. It was while immersed in this work that their partnership in Ravel really crystallized.

“Law is very text heavy—a hard, dense subject. And that becomes even more apparent when you’re trying to explain the law to people who aren’t necessarily fluent in English,” says Reed. “So when Daniel came to me with this notion of visually showing case law and doing searches based on visualization, it really resonated with me.”

They took Venture Capital II at Stanford Law School in the first quarter of their 3L year. That got them going on a business plan. At the same time, Lewis reached out to law and computer science professors and students for advice and referrals. They also successfully competed for a spot in the d.school’s 
LaunchPad course—and then placed second in the university-wide BASES business plan competition.

An example of Ravel's case search result displays

The legal tech company Ravel displays case search results, an example shown here, with related cases clearly visible.

While Reed, Lewis, Harris, Masters, and others who share a deep interest in and understanding of technology and law are starting companies, they are often driven by the desire to improve the profession and for their work to benefit society.

“This is a way to change the legal space and provide tools people can really use,” Harris says.

“Our system remains free to judges and IP academics. And we do a public interest demo once a week,” says Lex Machina CEO Josh Becker, JD/MBA ’99. “We take the public interest part of our mission very seriously. This is about the patent system and people are very animated about fixing it. And it’s not just lawyers who feel strongly about it, but engineers too.”

Access to the law could well create a better-informed public, with more people securing their futures with wills, trusts, and the like. It may also spur innovation.

“There are a bunch of technologies that are aimed at the less complex end of the legal market,” says Lemley. He explains that some legal tech companies offer online solutions that are less “handcrafted,” typically requiring minimal lawyer time. But the market expands as the cost of legal services is driven down, and more people can consume them. Along with reaching more clients, those clients may do more with the legal services they consume. Lemley points to Incbot, currently in development at CodeX, which will automatically incorporate a new business and could encourage the start of more companies, and more innovation.

While many legal tech companies have started in the past few years—Legal Force, Wevorce, and others—regulation of the legal practice is lagging, and that could stifle innovation if not addressed.

“In the United States some of the impetus for legal innovation has been blocked by restrictive bar rules on the
unauthorized practice of law,” says Deborah L. Rhode, the 
Ernest W. McFarland Professor of Law, director of the Center on the Legal Profession, and director of the Program in Law and Social Entrepreneurship at Stanford University. She points to the current prohibition on legal advice given by non-lawyers, adding that when it comes to online services we’re already in a world that is increasingly out of step with the bar’s licensing structure, which requires membership in the bar in the state in which the assistance is given.

“There’s so much assistance occurring online and crossing jurisdictional boundaries,” says Rhode. “Our whole licensing structure really needs to be revisited. Technology has opened our eyes to the ways that traditional licensing structures have impeded effective and efficient delivery of services.” And regulators at the highest level of government are starting to look at the problem, adds Rhode, who was invited to attend a recent discussion about technology, the law, and access to justice, hosted by the Obama administration.

 


Some suggest that lawyers, no matter what their chosen practice area, will need to have some understanding of technology—whether it’s evaluating and purchasing the newest discovery and business management tools for their work or speaking with a technology client or designing new solutions for the law. This is Pieter Gunst’s contention.

 

LawGives Co-Founder and Code=Law Founder Pieter Gunst, LLM '11

LawGives Co-Founder and Code=Law Founder Pieter Gunst, LLM ’11 (photo courtesy of LawGives)

A technology lawyer with DLA Piper in Brussels before coming to Stanford Law School for the program in Law, Science & Technology, Gunst, LLM ’11 (see sidebar at the end of this article), thinks this is now a “must have” for all lawyers. So he started Code=Law last year to teach law students something about computer coding. And there is a lot of interest in learning this tool, judging by the 80 or so responses from law students that he received when he emailed an invitation to the first meeting. About 18 months on, more than a dozen law students gather each week in the basement at the law school for their tech lessons—even though they receive no academic credit for their efforts.

“I think the practice of law is actually more like computer science than people realize,” says Harris. “What you’re doing when you program is taking a set of rules and tools and applying them to solve new problems. And that’s what you do when you’re a lawyer—you take a foundation of rules and principles that are the past existing law and apply that to new problems, the new cases at hand.”

Tom Melling, JD ’94, calls this “bridging the geek divide.” A legal tech veteran from the 1990s (he co-founded Serengeti Law, the largest legal matter management, e-billing, and analytics system), Melling sees the emergence of the “legal techie” as a good thing.

“Having a legal degree and being able to contribute to a business by understanding law and policy is valuable,” says Melling. “But increasingly today’s leaders understand both technology and law. And it’s applicable to many areas—energy, criminal justice, etc.”

“My sense is that legal education in general and at Stanford in particular needs to better prepare our graduates to practice in a much more technologically sophisticated environment,” says Rhode. And while law students are taking computer 
science and business and entrepreneurship classes outside of the law school, some would like to see similar offerings in the legal curriculum.

“The law school enables a lot, but it’s possible to imagine it encouraging more,” says Masters. “What if there were an 
entrepreneurial track?”

Melling sees this as a time for great opportunity for Stanford Law. “Stanford is a place where people can learn about the technology and understand it on a much more fundamental level, as well as understand the legal profession and legal policy, which is a tremendous opportunity,” he says. “I don’t think there’s a place better suited than Stanford for bringing together law, technology, and entrepreneurship.”

“Lawyers have a great role to play as society, policy, and the law all grapple with advances in technology,” says Tony Lai, LLM ’11 (see sidebar, p. 25), who notes that the Law, Science & Technology advanced degree program he took at Stanford already does this. “Stanford is leading in this area, and we should continue to.”

 


In the last class of the Legal Technology and 
Informatics course taught at Stanford Law School in the fall of 2012, the discussion turned to the future of law and the capacity of computers to assume key functions in the law. The guest lecturer, Peter Thiel, challenged students to examine their assumptions about the application of technology to law and the 
effectiveness of the current legal system.

“Let’s look at our current legal system de novo. Arguably, it’s actually scary itself,” he said. Thiel talked about the number of laws on the books, their complexity, and the sometimes indiscriminate ways in which they are applied. “For some reason, there’s a big fear of automatic implementation … [but] it seems inarguable that at present, to a large extent, random and uncertain processes determine guilt or liability. 
“It may be that the usual intuition is precisely backwards. Computerizing the legal system could make it much less arbitrary. … There is no reason to think that applying technology is inherently draconian. Of course, automating systems has consequences. … Perhaps the biggest impact that computer tech and the information revolution have had over the last few decades has been increased transparency.”

With much of the focus in legal tech on business efficiency and the delivery of services, Thiel offers a vision of, perhaps, a much wider application. Could technology help us to achieve a more just legal system, aided by computers—lacking in human frailties of prejudice, prejudgment, and emotion? As we look to the future of law and technology, it’s clear that we have only begun to scratch the surface of its potential. SL

 


Margaret Hagan: Designing her Own Legal Tech Curriculum

Icon - Law Dojo Logo - _fmt

(photo by Margaret Hagan)

It’s Friday night in Silicon Valley so there must be a hack-a-thon going on somewhere—and most likely it’s happening at Stanford. Margaret Hagan, JD ’13, had just finished the fall 2012 quarter of Legal Technology and Informatics, the subtitle for which is “Think Outside the Bar.” Taught by Ron Dolin, a lawyer/engineer/entrepreneur, the new course looks at this very current phenomenon of the transformation of law through technology and the possibilities that lay ahead for JDs willing and able to see them. Hagan is not your stereotypical Revenge of the Nerds geek, but a new norm. A comparative literature major and Marshall Scholar before coming to law school, she embraced the culture she found at 
Stanford—diving in head first taking, among other courses, the d-school’s Designing Liberation Technologies and Jonathan Zittrain’s law school course Ideas for a Better Internet–three times.

“Anytime there are people making stuff, that’s where I want to be,” says Hagan. And she’s revved up after Dolin’s class. “It caused a kind of revolution in my mind. We need to start thinking creatively about building our own legal careers because the market is really changing. We need to become JDs who are also masters of technology.”

For Hagan, that means planning a career that will encompass a full spectrum of paths, not just one, from law firm associate through academic fellow—and legal techie. Right now, she’s looking at developing solutions for all sorts of legal challenges. A talented artist, she started doodling in her 1L classes to help her
visualize the legal lessons. Since coming to Stanford, she’s learned a bit about coding too. She decided to develop a legal educational online game to help law students as well as non-law students to better understand the law. That’s where the hack-a-thon came in. Hagan explains the process: Gather on a Friday night, listen to presentations by VCs or tech company engineers, form teams, and then work like crazy building a prototype and a business pitch for your idea by Sunday afternoon.

“I go to these tech-a-thons, and the others are all 19 or 20 and on their third startup,” she says. “I don’t have the ‘whole life ahead of me’ feeling that 19-year-olds on campus do, but I do have the appetite. And I’m finding that it’s so easy to build stuff and put it out there and to hopefully make a difference. There’s huge energy around small ventures.

”
It was good prep for the very competitive process Hagan embarked on to secure a place in Stanford’s LaunchPad. The d.school course is a hack-a-thon on steroids, stretched over several weeks to fill a quarter. She made the cut with her law game idea, now called Law Dojo. And she’s busy making that idea a reality before she graduates in June.

 


LawGives
Solving the Legal Services Mismatch

Pieter Gunst and Tony Lai, both LLM 11, have caught the legal tech startup bug big time. They were practicing technology attorneys in Europe before they came to Stanford Law School to join the advanced degree program in Law, Science & Technology and study with Paul Goldstein, Stella W. and Ira S. Lillick Professor of Law, and Mark Lemley. But now they are putting down roots in the Stanford community and in the legal tech space, where they hope to make a difference. They came up with the idea for LawGives soon after meeting on the first day of their Stanford Law LLM program in August 2010. “We wanted to address some of the inefficiencies we saw in legal practice—to make it more fluid and transparent,” says Lai. “And we did pro bono work and saw a big need there that we might also address.”

Their company, LawGives, is an online marketplace for legal services where knowledge is shared. It hosts communities for organizations like StartX—the startup accelerator at Stanford where Gunst and Lai are resident entrepreneurs—and for lawyers, to share their knowledge, share their skills, build reputations, and then find more paying work within those communities and across the broader LawGives platform. The site strives to make the marketing and delivery of legal services more efficient, so lawyers can help more people, both for profit and for free. It’s currently in beta testing.

Lai and Gunst dug deep into the Stanford community, taking as many courses touching on innovation as they could fit in. And they too are on a mission to offer legal tech solutions.

“The access to justice gap is huge—something like 80 percent of low-income people who seek legal help do not get that help,” says Lai. “We see this as a tech
infrastructure challenge in the delivery of services, which we are addressing.

”
Through LawGives, “We are trying to solve the mismatch in legal services between supply and demand, particularly on the pro bono side,” says Gunst.

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