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TORONTO PART ONE: The Incubator Scene

Added on the 2nd Aug 2019 at 1:09 pm
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Toronto has one of the most vibrant technology scenes in the world and in legal technology has given birth to the likes of Clio, Kira Systems and Diligen as well as one of the first, if not the first, global master of laws in innovation, law and technology at the University of Toronto Faculty of Laws.

It was said recently by a BMO Capital Markets report to be the fourth largest tech market in North America with around 214,000 workers in the sector.  Other names you might know that have come out of Toronto include Cisco and Oracle – in 2018 the third largest software producer by revenue behind Microsoft and Alphabet.

While I was there for an OpenText conference (FYI, OpenText’s global headquarters are in Canada), I had time to catch up with a handful of key people – thanks in no small part to the introductions of Toronto born former Baker McKenzie senior associate and legal technologist and, of course, Legal IT Insider contributor Dera Nevin.

One of the major themes that emerged during this trip was the role that government-funded incubators have played and continue to play in supporting the growth of legal technology.  This means that the A2J movement is thriving in Toronto. T here is also a strong connection with the education sector, in particular, Ryerson University.

The scene is in fairly sharp contrast to the UK, where most of the incubators or accelerators are typically run by law firms or the Big Four (PwC).

These incubators are by their nature biased but one of the advantages they have is easy access to the lawyers that shape the products emerging from the incubator.  And connections (potentially even funding) that may help smooth start-ups’ paths as they go to market.

The Legal Innovation Zone

The Legal Innovation Zone, commonly referred to as LIZ, was the first incubator in Canada – and possibly anywhere – dedicated to legal tech.

LIZ was founded around four years ago by managing director, former attorney general and Ontario MPP Chris Bentley, who before entering politics was a criminal defence and employment lawyer.  He also founded the Law Practice Program, an alternative path to qualification, and both that and LIZ are housed at Ryerson University.

LIZ supports start-ups, R&D for law firms and businesses and practical reform initiatives.  It grew from a conversation that Bentley had with the executive director of Ryerson about the university’s Digital Media Zone incubator.  “I said how many are doing something in law?  And the reply was ‘none’.  So, I immediately emailed the president and said, ‘you need a legal incubator’”.

LIZ can house 15-20 start-ups at any one time.  It is free to them, funded by the university and also paid for by projects underway at the incubator.  Bentley says: “It allows them to meet entrepreneurs and advisors”.  LIZ doesn’t take any equity or interest in the start-ups.

“We are trying to create change and help to build better solutions,” Bentley says.  “We want to give consumers better access to justice”.

Bentley has an interesting concept of what access to justice means.  “It’s about law in the way you need it, at the time you need it, without a thousand caveats.  That’s access to justice.”

The least able to access justice are often middle-income families who aren’t eligible for support and, for Bentley, it’s about “being able to access justice at the end of the day, after your day job.”

He is launching a family portal that will connect people who are separating or getting divorced with a lawyer who can help to triage their case.  “I’ve just announced that it will be up and running in January,” Bentley says with a smile, because he’s not sure how they will hit that deadline.  “We’ve been talking about access to justice for decades and it has to happen, so we’ve set a deadline.”

For more information and to get involved click this link: https://www.ryerson.ca/news-events/news/2019/07/ryerson-legal-innovation-zone-launches-family-law-portal/

111 innovation hub: Blue J Legal

Founded in 2015, Blue J Legal provides uers with AI-powered research and planning tools, helping them to work out how a court would rule in their tax and, more recently, employment cases.  At the end of 2018 Blue J raised US$7m in seed funding.

Co-founded by Ben Alarie, there is a big A2J side of Blue J, which at its heart has an ambition to democratise the law.

The company is based in tech hub OneEleven (written as 111), which houses around 30 diverse high performing tech scale-ups within 250,000 square feet of real estate.

111, which Ryerson University is a co-founder of, is in the heart of Toronto’s business district and a short walk to the companies and law firms it does business with.

According to VP of marketing Michelle Kwong, who has been with Blue J since April and has as yet unvested equity in the company, being part of an incubator is a hugely positive factor.  FYI the reason we mention equity is because Kwong has a successful marketing background, including a senior role at American Express but was attracted to legal start-up Blue J in large part because of its utopian ambitions.

While it’s hard to articulate any specific influence 111 has on product development, the energy and exchange of ideas with other like-minded techies – who currently focus on anything from using AI-based predictive analytics for industrial IoT to an online test for admissions teams to assess applicants’ people skills – is a huge plus.

It’s become a bit of a cliché, but table tennis tables provide great decompression and while Kwong gave me a tour of the building, one of the team’s data scientists was absorbed in a game.

Note: Blue J has received support from The Creative Destruction Lab, which has helped nurture start-ups worth over £2bn in value and is coming to the UK beginning in September 2019, delivered by the Saïd Business School, University of Oxford

Saïd Business School is partnering with the Rotman School of Management at the University of Toronto to deliver CDL in Europe for the first time.

Currently CDL operates at five universities across Canada and at New York University’s Stern School of Business.

Caroline Hill talks tech in Toronto

Blue J meeting in process in one of the share offices

The newest office space of the fast growing company

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Amy ter Haar, blockchain consultant, Creative Destruction Lab associate and entrepreneur

 “What makes Toronto a natural home for the legal tech sector is the high density of lawyers.  There are also some close links between the academic and business communities.  For example, through the Creative Destruction Lab (CDL), founded at the Rotman School of Management at the University of Toronto, as well as the Legal Innovation Zone (LIZ).  Certain commercial in-house incubators are also effective.  For example, SecureKey just released a new legal tech product called Verified.Me.  We have an impressive and rapidly mushrooming community of legal hackers, are the host city for the World Legal Summit this week and are also home to a number of world-class legal tech start-ups.

“The growth of innovative, vibrant and successful value creation by legal tech hubs, incubators or accelerators depends on a large number of interrelated factors, such as technology vendors and enthusiasts, the proximity of customers and beneficiaries of legal services, access to investors, regulatory initiatives to foster new approaches, especially in a conservative profession like the law, and local law schools and legal education.

“Most incubators/accelerators have a specific objective or approach.  In Toronto, for example, LIZ focuses on building better legal solutions for the consumers of legal services.  On the other hand, the CDL focuses on providing the strategic insights needed to turn research innovations into high-growth ventures (not focused on legal tech but does have legal tech).

“One of CDL’s best functions is its role as a crucible of business acumen and technical expertise, bringing together a highly effective combination of entrepreneurs, investors, scholars, inventors and risk-takers.  This works extremely well.  CDL has focused on building a community of entrepreneurs, angel investors and thought leaders that commit to spending time with the companies.  It is the time, more than the money, that is what’s really scarce.  It is through providing the strategic insights that helps turn research innovations into high-growth ventures.

“Legal tech innovation is going to be driven in the future by trends that favour Toronto’s specific strengths.  Primarily, in Toronto this is the convergence of identity solutions, artificial intelligence and distributed ledger (blockchain) technologies.  It is our collaborative interdisciplinarity that will be the hallmark of tomorrow’s innovation breakthroughs.  All of a sudden smart legal agreements meet identity solutions and peer-to-peer payments meet communications – this is exactly where Toronto has a bench strength that punches well above its weight.

“This past spring, the Royal Canadian Navy (RCN) and the Canadian Special Operations Forces Command (CANSOFCOM) partnered with CDL.  This is an example of the Canadian government understanding that new technology is accelerating at a rapid rate and, in order to understand the network, you have to be part of it.  These types of initiatives provide a collaborative environment in which the government can directly engage start-ups and business leaders in the development of technology use-cases.  While this example isn’t focused on legal technology, it does provide an excellent approach to follow in order to realize the benefits of a collaborative approach.  A rising tide lifts all boats.  Success begets success and working together in this way seems like the best way to go about it.  Singapore is another good example of a government-backed initiative to drive innovation and to position the tiny nation state as a regional and global legal hub.

“It isn’t always easy to overcome institutional stasis (or bias) within a legal organization, regulatory body, law firm, corporate legal department or law school.  However, a public/private collaborative approach can best provide the strategic insights that helps turn research innovations into high-growth ventures.”

2 Comments

  1. Jonathan Litt says:

    This is the most thorough report I have seen about legal tech in Toronto. You spoke to everyone in the city who matters.

    I wonder though if Toronto has peaked. It happens with every city and it seems that the most active time was 2 or 3 years ago.

    It would be interesting to see a follow up about which of the most promising companies are still in business.

  2. Danish Singh says:

    I think this would be a very good series as I am interested how Toronto compares with other cities. I like that so many influential people commented who understand how to build successful law businesses.

Any Comment?