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Guest post: Where are all the Legal Tech Incubators?

Added on the 7th Sep 2017 at 9:39 am
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If Charles Caleb Colton is correct and “imitation is the sincerest form of flattery,” then flattery has been very slow in coming to the legal technology space. Earlier this year, Toronto’s Legal Innovation Zone at Ryerson University (referred to as “the LIZ” by the cool kids) celebrated its second birthday, and yet, despite claims by some commentators that 2016 – and then 2017 – are break-out years for legal tech, there has not been a similar break-out of platforms to grow such technologies. This is both odd and troubling. With all the hype around legal technology (484% increase in legal tech patents and AngelList citing 1,588 legal tech start-ups across the globe with an average valuation of USD$4.2 million), why aren’t we awash in legal tech innovation assistance?

In other words, why aren’t there more LIZs? And by “more LIZs,” I mean more incubators. Incubators are not terribly fussy about a company’s stage of development, they’re built to encourage, assist and provide all the elements necessary to support growth and further innovation. So, LIZ looks for companies at any stage of development that have a “legal system or technology based innovation with high growth potential” and provides them with designated workstations in a shared work environment, meeting rooms, technology, connections to experts, advisors and industry leaders, educational workshops, networking opportunities connections to The DMZ business incubator for tech start-ups, as well as connections to Ryerson University resources, researchers and student talent. Selected companies are given an initial free four-month stay as well as further extensions and membership plans. My scouring of the globe has yet to find anyone who has put together the same mix of workspace, mentorship and community found at the LIZ.

What I’ve found around the world is an emphasis on “accelerators.” Unlike incubators, accelerators, seek later stage legal tech companies in need of that final boost of expertise, mentorship and money – it’s not unusual for accelerators to take equity positions in their start-ups – before launching out into the world. As a result, accelerators tend to provide shorter-term support and are more programme-based; think, army bootcamp – but for legal tech entrepreneurs.

Earlier this year LexisNexis launched a legal tech “accelerator” out of the offices of LexMachina (which it had purchased in 2016). The first five participants at the accelerator recently ended what was called a “rigorous 12-week curriculum,” which allowed them to gain “knowledge and expertise in a variety of topics including technology and product development…[as well as gaining] access to … enriched legal data and cutting-edge tools and technologies from LexisNexis, and will be able to leverage the company’s established relationships with Stanford University and other leading Bay Area schools, businesses, VCs and influencers to grow their companies.” The next cohort is about to start.

Also this year, Mishcon de Reya created MDR LAB to “work with a few select start-ups in a mutually beneficial programme [where start-ups can]… pilot their products with Mishcon de Reya, receive mentoring from legal experts at Mishcon de Reya, take part in an education programme and access funding from Mishcon de Reya and L Marks.” Its first cohort finished in July and another is being scouted for 2018. 2017 also saw Australia’s Mills Oakley create the Mills Oakley Accelerator, “a 13-week incubator support program” that includes office space and mentorship and culminates in a Dragon’s Den style pitch, where a lucky team can obtain funding from the firm.

Somewhere in the grey area between incubator and accelerator is a new offering by Allen & Overy. The firm’s new four-month Fuse programme is located within the firm’s London office and gives participants office space while also allowing them “access to A&O lawyers, technologists and clients …. to test and develop ideas with these groups.” Also in this grey zone is the Legal Innovation Centre at Ulster University which was created in 2016 to bring “together research into the application and impact of new legal technology and opportunities for the education and training of current and future lawyers in essential legal tech skills.” But only one element of its impressive agenda involves, “collaborative RnD …with stakeholders in order to capitalise on the benefits of innovative approaches to legal practice,” which makes it a bit difficult to classify as an incubator. And I’ve been told to stay tuned for an announcement from Australia’s Centre for Legal Innovation at the College of Law coming later this year.

Don’t get me wrong, these are all welcome additions to the legal technology ecosystem. However I’m concerned about the paucity of assistance at the incubator level, especially for legal tech that assists regular people; without this layer of support, many legal innovations may be prematurely overlooked and abandoned. Furthermore, entrepreneurship can be a very lonely endeavour and building a community hub where legal innovators can work day in and day out (without strict term limits), share ideas, commiserate, gain mentorship and energy is just as critical to success as money, especially in the early days of developing something new. Hackathons and meet-ups are great, but they’re few and far between; then it’s back to Mom’s basement or a small flat to work – alone. The creation of community is an important facet of the incubator experience, and it can be most readily and economically be built in the university environment, much like Ryerson did. And so, while it’s still early to put out wish lists for 2018, my wish is that 2018 will see a raft of new incubators being created to further the millennial generation’s fascination with legal technology.

Mitchell Kowalski (pictured)is the Gowling WLG Visiting Professor in Legal Innovation at the University of Calgary Law School, the Legal Innovation Columnist The National Post, and the Principal Consultant at Cross Pollen Advisory where he advises in-house legal departments and law firms on the redesign of legal service delivery. He is also the author of the critically-acclaimed book, Avoiding Extinction: Reimagining Legal Services for the 21st Century. His new book, The Great Legal Reformation: Notes from the Field will be published in September, 2017.  Follow him on Twitter @mekowalski or visit his website www.kowalski.ca

 

2 Comments

  1. Andy Stokes says:

    Having spent the first six weeks of my life in an incubator, I’ve always been happy about the fact that the NHS did no go on to claim 10% of my lifetime earnings.

    And I guess that summarises the point … Accelerator providers are looking for payback; they want early mover advantage – “I call dibs on this competitive advantage”. Whereas incubator providers have no call against any potential future success and are being, to a degree, altruistic (though of course such facilities do cost money in the same way that the NHS does).

    Given the Accelerator providers are commercially based then their approach is somewhat to be expected, though I agree with Mitchell that more incubation is a good thing – otherwise who knows what great innovation will never reach adulthood?

    To an extent I also see the same thing happening within law firms; the larger they get, the less agile they get and the chances for cross-fertilisation between their own technical people – the ability to incubate new ideas – is lost within myriads of specialist pigeonholes (instead they seek to fund external innovation). Big Law may think that this is the way ‘real’ business operates, but when you look at the likes of Google, Amazon, the Microsoft Garage project and others then we can see that this is not true. Perhaps, in a sensibly controlled fashion, Big Law should allow their own people to work more easily together to grow their own ‘next big thing’.

    Of course all this could be a moot point; after all we’re into Autumn now so in a few months we’re due for a change of Buzzword Bingo Winner … I thing ‘quant’ should feature in there somewhere; I’d certainly fund that.

    • Caroline Hill says:

      Thanks Andy, this topic has caused a lot of debate. Agreed that incubators are vastly different to accelerators – although the latter are still to be encouraged and it will be really interesting to see what comes out of A&O’s Fuse. We had a long and at times fairly tongue in cheek discussion on this topic on Twitter yesterday (7/9) – check out @MEKowalski or @chillmedia if you missed it.

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