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Raymond Blijd

First Half of 2018 Legal Tech Raised $1.2 Billion in Cash
First Half of 2018 Legal Tech Raised $1.2 Billion in Cash 1024 417 Raymond Blijd

In the first half of 2018 Legal Tech raised $1.2 billion in cash. If that isn’t crazy enough, we are ignoring a possible $3.7 billion raised with initial coin offerings (ICO). We previously discussed those blockchain startups impacting legal but we didn’t talk about the elephant.

What’s more amazing is that we are only half-way 2018 but surpassed the amount raised in all of the past 3 years combined. Bear in mind, @Legalpioneer also registered 6 undisclosed rounds by private companies this year and we aren’t perfect so we could have missed others.

Year Total rounds raised
2017 $385 million
2016 $280 million
2015 $366 million
Total  $1.03 billion

A little nuance: some of the larger rounds were debt financing which is a bit odd but not unusual. The other concern is that seed financing in 2018 is trending downwards compared to previous years. It seems Venture Capital (VC) is more attracted to mature Legal Tech.

Year # startups receiving seed or angel funding # startups receiving later stage funding
2018 10 25
2017 28 48
2016 39 40
2015 23 31
2014 27 13

The Elephant

Also note: RiskTech startups grew not only in numbers mainly nudge by GDPR, their funding generally did as well.  Check out the huge rounds by privacy apps Signal and Orchid lab. Both dwarfed by the elephant called Telegram which raised a ridiculous ICO of $1.7 billion.

We still have 6 more months in 2018 but it seems we all value a fair society a little bit more these days.

How To Find New Legal Technology
How To Find New Legal Technology 1024 406 Raymond Blijd

Since January the Legal Industry has seen a flurry of maps, meetups, hackathons, awards, and conferences. All these activities are aimed at sizing the market and finding the next big hit. But what are we really looking for? And are we looking in the right place?

What is legal technology? More then Core

Before we can answer the question where and how to find Legal Technology, we have to address what it is. In general, there are two schools of thought on defining legal technology. First is the technology that makes legal work more efficient for experts or non-experts alike. At its core, it is the technology that infuses lawyers with superpowers. Software such as eDiscovery, Draft- and Research Assistants enable professionals to process more legal work with fewer experts. For consumers, there are marketplaces and Do-It-Yourself (DIY) services that provide exclusive legal support at fixed or lower costs.

Second is a broader view of Legal Tech which looks at whatever technology impacts the law in a meaningful way. Looking at areas where engineers develop smarter ways of protecting legal rights. The same protections previously provided by law experts using contracts, litigation, and regulation can now be resolved with technology such as Blockchain. Here are 11 examples out of 209 we found, ranging from protecting ownership of personal data to securing transactions for anything of value. If we could digitally own our personal data by locking it on the Blockchain, we wouldn’t need the EU General Data Protection Regulation (GDPR).

Data revealed how this trend slowly emerged in the areas that face the most regulatory scrutinies like Finance or Health. Better yet if you measure by either institutional investment, acquisition or initial coin offering (ICO), the most lucrative Legal Tech sector is managing Intellectual Property rights with technology. If we want to effectively document this displacement of the legal industry, we have to take a broad view of what legal technology is.

Where is legal technology? Beyond the Beacons

The quickest way to get up to speed with core legal tech companies is to follow the industry beacons. Here’s what we use to follow new tech:

  • Newsletters;
  • Bloggers (and their Twitter streams);
  • Legal Tech Maps & Country lists;
  • Accelerators & Incubators;
  • Awards;
  • Hackathons & Tournaments;
  • Conferences.

We previously shared some samples from the list above. This year we joined the Global Legal Hackathon in Warsaw, Poland and we were the unexpected keynote speaker. Another highlight is our Dutch Legal Tech map collaboration which garnered over 15,000 views on LinkedIn. It also provided inspiration for this monster collection of Legal Tech maps.

Yet, if the news and announcements zip by too fast, you can always stop and search company directories like Angellist, Crunchbase, or Producthunt. Most databases include a tag for Legal or Legal Tech. If you like to dial back the noise, there are a couple of legal industry lists like Stanford or Robert J. Ambrogi. The Germans even went as far as to locate Legal Tech companies on a map by address. Something we also twice experimented with in Barcelona (video) and in New York (video).

However, one challenge most databases face is how to classify the different types of companies. Something we uncovered while hunting for legal apps is that fixating on categories may limit us from finding more. There is a risk of creating an echo chamber of Legal Tech because protecting our rights goes beyond technology. It isn’t driven by one specific business model or destined to be practice by one profession. You’ll find it in many places and in the weirdest forms.

How to find legal technology? Robots & Reason

Once you sailed past the beacons, you’ll discover the sea of Facebook, Linkedin, and Twitter. Especially Twitter is a pretty rewarding space to find new Legal Tech so we partnered with Orhan Yalcin to build a special machine to find Legal Tech. We dubbed our bot Legalpioneer Recon and ran it a couple of times for it to reveal the other challenge databases encounter: duplicates. The first time we unleashed our baby on Twitter it was like drinking from a fire hydrant. But once you start filtering out the duplicates, the subsequent passes become nothing more than just a drip. Recon now processes between 300 to 400 startups each month to sniff out at best 22 or at worse 6 Legal Tech startups.

If you noticed some dark spots on the Legalpioneer Where map and wondered why that is. It is because our bot learned from us and we only taught it English. When we started Legalpioneer, our mission was to be a global community. One reason is that locals have a much better shot at discovering gems. Something we call the Holger Effect. This strategy resulted in us doubling the size of startups in Russia and Eastern Europe this May. And there was an additional side-effect: Telegram bots doing legal work. We found 9 of this new species of Legal Tech running wild in the Caucasus.

We’re still tweaking the algorithm on what to include in the Legalpioneer dataset. We started with private companies founded after 2010 which should at least have a unique domain name. With CivicTech and Hackathons, we have extended this to communities and projects on Twitter, Facebook, WordPress.org, and Github. We are contemplating incorporating App Store and Google Play apps just as Slack, Messenger, and Telegram bots.

Why look for legal technology? Rather be Safe, than Sorry

Legal Technology is actually an answer to a human riddle: what is fair? At some point in the future, we may trust Google Duplex to give us the best answer. Legalpioneer aims to estimate when we’ll reach that point, calculate our ETA and plot the safest route.

Course set, buckle up!

ICO particles
ICO: Fascinating Fields of LegalTech Dreams
ICO: Fascinating Fields of LegalTech Dreams 1024 364 Raymond Blijd

I looked at 304 Initial Coin Offerings (ICO) to find the ones impacting the legal industry. I was simply fascinated and slightly fearful seeing all the beautiful solutions on the Blockchain. Here are my notes and numbers.

Fields

I see Blockchain as a technology that is naturally suited to improve the law. If legal contracts were drafted to create trust, contracts on the Blockchain is a 10x improvement. To clarify, I’m still learning what Blockchain is and I quickly discovered that it isn’t synonymous with an ICO. Not every company raising funds through an ICO necessarily uses Blockchain in their proposition. Some just use the tokens to raise money.

My goal was to find the ICO startups impacting the legal industry. I did not see any that could help legal professionals do their jobs more efficiently, I did find many that make entire legal frameworks obsolete. One framework that is imminently threatened: Intellectual Property (IP) law, also known as the rules that help you monetize your data, knowledge, and anything in between.

Here are samples of how many we found that promise to help you earn money with Intellectual Property rights on the Blockchain:

A former 2014 Miss Iowa started her own coin to protect..cannabis. And it wasn’t her first cannabis tech company either. It’s why I called these the Fields of Dreams.

Dreams

Out of the 209 I ultimately ended up including in our dataset, about 32 claim to be either unique or first. To be fair, some are clearly category-defying concepts which we can not shoehorn into existing contexts. Doc.ai describes itself as “Blockchain based AI that performs deep learning computations on quantified biology for predictive analytics and personal health”.

Ok, take a deep breath. Whatever it means, they’ll have to develop some HIPAA compliant, privacy technology in order to operate successfully. While I classify it as ‘RiskTech’ and tag it with ‘Privacy’, it actually could be ‘LegalTech’ since they choose to use Blockchain.

In any case, they raised $11 million with their ICO to pursue this dream of a virtual doctor. And while I was flipping through their site, I couldn’t help but replace the words ‘Health’ with ‘Legal’ in front of ‘care’. It shouldn’t be farfetched to use the same principles to alleviate legal risks as it is to avoid health risks. One can always dream.

This brings me to my other point: these 209 offerings collectively represent a value of $4.37 billion. 

To get a better perspective, on Legalpioneer Where select Market ‘LegalTech’. On the Stage toggle click on ‘Seed’ and ‘Known’ and then drag the date slider to January 2017, you’ll see 28 LegalTech companies that collectively raised $110 million in cash.

Now just click on ‘ICO’ in the Stage toggle for the same period, and you’ll see 55 LegalTech startups raising up to $1 billion via coin.

ICO Cash

ICO Coin

*Numbers in image reflect dataset at publish date*

Woke

After eyeballing a hundred or so Token sales pages I started noticing a pattern. First, each site was meticulously designed to evoke trust. Every single one we included in our dataset had HTTPS-encryption. Crisp team photo’s, gorgeous roadmaps, cute videos and the omnipresent particles Hero. Social channels like Facebook, Twitter, Slack, and Telegram all had activity. This is a tip for any LegalTech company aspiring to launch a trustworthy product, check out the ICO playbook.

However, most sites were generous in communicating every detail except one: a known location. In some cases, it was extremely difficult to distill where their main operations were based. While I do understand that they’re all “distributed” and “decentralized”, you may still need a physical address to receive that 105″ curved 4K display..for the office. Trust starts with the ability to locate you and it’s one of the reasons we go to great lengths to map it in Legalpioneer Where.

Since I only looked at initiatives were the Initial Coin Offering already ended, I got an eerie empty feeling after visiting each site. It felt like I was part of the cleaning crew coming in after a wild beach party. But while I may have been wandering a wasteland of promises, I did feel a sense of missing out on something special (FOMO).

An EY research reported (PDF) that most white papers were heavy on buzz and light on substance. I only glanced at a couple of white papers to lookup their elusive whereabouts.  But the EY report was correct that the ones I saw were written in such a way, I felt stupid and smart at the same time. Using terms like “Turing complete” and “oraclized“. Well, I let you Google them yourself. While you’re at it, below are some links you could use to start exploring these fields of ICO’s. Let’s dream.

In memory of Geert

2017: Year of Recognition, Records & Reckoning
2017: Year of Recognition, Records & Reckoning 1024 576 Raymond Blijd

We’ve witnessed an amazing year.

Recognition

Legalcomplex

First some notable numbers from our main platform:

  • 1 Dark mode: go ahead and toggle it, your eyes will be sooo grateful;
  • 2 Charts on LegalTech and Regtech updated every month. I will get to the Law Charts one day;
  • 3 Products launched: Legalpioneer Where, Who (aka Status) and Why (aka Ambition). See our post: Where are Legalpioneers?;
  • 10 Videos and tutorials shipped for Legalcomplex & Legalpioneer Tour. Obviously, @Privaceee is still our favorite;
  • 12 Posts published which includes this one. Hires & Fires was our most popular;
  • 606,309 views across all channels…but who’s counting.

Legalpioneer

What’s the state of Legal and our Fair Society?

…then we had to take a little break when one of our robots broke down…we’ll survive.

Garage

Legalpioneer took most of our mind space but we still wandered into the Garage to unwind and tinker on weirdness.

Grateful

I’m a curious soul so I will keep doing this for as long as I’m able. Nonetheless, I’m humbled by each retweet, like and view. Therefore I’m especially thankful for the opportunity to share this alternative perspective in a #BakersDozen interview.

You could also imagine my surprise when we landed on the front-page of the biggest newspaper of The Netherlands. I was happy with the fact we could answer the question with analytics, not anecdote. I hope a larger audience has become aware of the importance of LegalTech and it’s role in our society.

The article illustration contained a mini-graph…that is Legalpioneer data!

Records

First, a general overview of some of the records in LegalTech for 2017. You can run each analysis below on our site and see the results instantly.

Legalpioneer Where

LegalTech map:

  • Most startups in one month: January, 17 (75)
  • Top City in LegalTech: London (306). London is tops in three categories:
    • Top in LegalTech startups: 98
    • Top in LegalTech AI startups: 19
    • Top in LegalTech Blockchain startups: 9
  • Top Country in LegalTech: USA (697). The US leads in:
    • Most LegalTech AI startups: 104
    • Most LegalTech Blockchain startups: 21
    • Most Funding: $1.7 Billion (which is 80.6% of all investment in LegalTech startups)

Legalpioneer Status

Tres LP dashboard:

  • Highest seed round in Legal: United Masters ($70 million);
  • Highest total funding in Legal: Kobalt ($805 million);
  • Most valuable Legal market: RiskTech* ($10.9 million average evaluation).

Legalcomplex Charts

Legal Startups Charts:

*Finally, here is one chart to put all of the above in a bit of perspective. Next year, we’ll delve deeper into Regtech and it’s adjacent markets to rationalize the value.

Eleven

I always handpicked the three most remarkable startups of the year based on my 20+ years of experience. Not anymore, I got fired and replaced by a robot. This year, all picks are data-driven. Don’t cry because we’ll always defiantly celebrate the startups on our @Legalpioneer twitter channel. You can follow your heart and like them on Twitter.

Introducing the Eleven startups our math calculated as most ambitious of 2017. They were founded this year and were able to raise money right away. These startups are ranked based on our experimental Ambition algorithm. I ran several scenarios and the formula kept coming back with unusual results and notable absentees like Altruim LTS. Eventually, I surrendered and saved this set since it may offer us a glimpse from beyond what I can see.

We’ll keep tweaking and release special dashboards going back till 2015 to rank startups founded in each year. We’ll also open up about the algorithm…after we figured out how these damn robots work.

LegalTech Eleven

Reckoning

Better yet call it an awakening. We have been awakened by the #MeToo and #NotMe movement on Twitter. That peace and stability are fragile. That we actually have a social contract to give power to a few. In return, we hope that those in power will protect the liberties for all.

And all that seems unethical or immoral, we can develop technology to reckon with it. Not just any tech…LegalTech.

Merry Christmas

 

ODR
Unexpected Trends of 2017 in LegalTech: Peace, Privacy & Party
Unexpected Trends of 2017 in LegalTech: Peace, Privacy & Party 721 797 Raymond Blijd

Our 2016 year review hinted Artifical Intelligence and Blockchain would make all the noise in 2017. However, this year’s data revealed three other signals which appeared on our radar.

Peace

We released a live sheet with now 78 CivicTech initiatives and an Online Dispute Resolution (ODR) dashboard. At one point this year CivicTech was the most valuable market in the Legalpioneer dataset. If CivicTech is the technology for policing our society, then ODR will be our court of justice. The main reason ODR appeared on our radar this year is the fact that out of 4 startups we registered using Blockchain to settle disputes, 3 of these were founded in 2017.

The political events this year have demonstrated how fragile a fair society is. How easy it is to lose stability in communities. And how expensive it has become for peace to prevail. CivicTech and ODR may be two ways to reclaim some civility and make our lives great again.

Privacy

In order to find startups in the Data Protection (GDPR) and Privacy space, we analyzed 197 providers of GDPR solutions and found 68 that fit our profile. Similar to what we had noticed in ODR, the dataset revealed a 100% growth of Blockchain startups in 2017. If you were to rank ODR, GDPR, Intellectual Property (IP), and Blockchain as separate markets, GDPR is the second largest based on a total investment of $151 million in startups founded after 2010.

However, it is not the reason privacy surfaced in our analysis, it was data indicating a polar opposite trend.

Payment provider Wepay did a study among small business owners to find out their single biggest problem: Fraud. RiskTech startups founded after 2010 which focus on fraud prevention by Knowing Your Customer (KYC) have a combined total investment of $1.5 billion.

Are you worried that your data may be stolen and appear on the dark web? This startup has you covered. But if you like online shopping, want to quickly get insurance or credit, be prepared to get naked.

Party

If PrivacyTech is the second largest market in LegalTech, Intellectual Property Tech (IPTech) is number #1 with approximately $1.2 billion invested.

Kobalt Music this year became the most funded ($805 million) LegalTech Company ever. United Masters is less than a year old and raised the current highest seed ($70 mln) of any LegalTech startup since 2016. By comparison, DoNotPay got $1.1 million seed in a seemingly bigger legal market with fewer competitors. Spotify spent over $150 million acquiring various AI (Niland) and Blockchain (Mediachain) startups to help it respectively find and managed music copyrights.

We mentioned before that LegalTech did not produce the profitable exits for investments. The exception is music copyright startups and they are leading the way once more in showing how lucrative the entertainment industry really is.

Finally, you can stop wondering where the party at.

Produce

To sum this all up: scholars called religion the earliest version of Virtual Reality (VR). If so then the Rule of Law is the most powerful VR game ever created. That is why we need CivicTech and ODR to keep the cheats in check.

We have given Google and Facebook more information about ourself then we may realize, just to find what we need or connect with our friends. Yet we are on the verge to volunteer more data for the convenience of online commerce. We won’t mind sacrificing our privacy for a discount and we’ll always click “Ok” to proceed to get what we want.

All this relentless automation will naturally lead to more leisure. Time we’ll use to indulge our creativity and be entertained. This will produce an economy of art that will rival the Renaissance. Some are already cashing in so let the party begin..

Stay tuned: we’ll wrap up this year on Christmas Eve with our 2017 review:

2017: Year of The Records, The Recognition, & The Reckoning.

USAfacts.org is CivicTech
Why CivicTech Is The Most Valuable of Them All?
Why CivicTech Is The Most Valuable of Them All? 1024 506 Raymond Blijd

Recently we celebrated CivicTech by posting 21 initiatives from across the world on the 26th & 27th of October. They are the most valuable of LegalTech and here’s why.

What is CivicTech?

Steve Balmer wasn’t going to donate to charity. He told his wife he paid enough in taxes. As she explained to him, it doesn’t work that way and to find out how it does work they donated $10 million to create USAFacts.org. A site dedicated to telling everyone how the US government spends tax dollars. The Balmer’s were exercising a basic human right to know the facts. Because without facts, Free Speech is nothing more than Fake News.

Over a 100 countries have established some kind of freedom of information law. Despite having access to all that data it still takes a considerable amount of tech to really get to the truth. The Panama Papers (11.5 million), Paradise Papers (13.5 million) and the little lighter Kennedy Assassination Records (13.000+) prove you need all the help you can get. Here’s a practical definition: CivicTech is whatever technology is developed to protect your civil rights. And most of it starts with knowing what rights we have.

Why is CivicTech so valuable?

Financial numbers tell us that it is. This July, Legalpioneer calculated the average investments per market and CivicTech came out on top but has since slipped to third. Unfortunately, not all have “Mr. Developer” money to invest in the importance of understanding our rights and how they affect our position in society.

But bear in mind, the US opioid crisis unveiled how much ($248 million) is spent to influence these positions. Equally, their presidential elections revealed how little ($46.000) is needed to nudge even the largest democracy. We were brought up to believe our vote and voice matter, the reality is that it can just as easily be bought and bargained. Those who pay for and play with our liberties bank on anarchy to be more profitable then stability and fairness.

If you acknowledge how important funding is for our individual rights, the above-mentioned amplifies how perilous we have become. It’s not just providing power to the people, also to the individual. Cyberbullying and Sexual Harassment are rampant and a real reminder that it isn’t going away with just saying you’re sorry.

Who will defend our civil rights?

When you distill it, it boils down to the following. You need at least $248 million to get your own law approved. About $10 million to find out the truth or defend your privacy in court. Around $40k to misinform a susceptible audience to become the new sheriff of planet Earth. But if you do not have the means and the “report abuse” button does not work. You have just a single vote to oppose injustice. That is if you are eligible and able to register.

There is Access to Justice (#A2J) movement across the world which is addressing a more affordable system. But it still begs the question: why is it so expensive in the first place? Maybe it is a lack of tech-savvy empathic professionals to make it more user-friendly and efficient.

I called them “Fair Defenders” and it is a slightly corny name which belies the immense responsibilities we entrust upon them. Challenges like rising income inequality, massive job displacements, environmental disasters and global disinformation.

These defenders acknowledge that the tech is mightier than the sword. They use Artifical Intelligence (AI) to stop Cyberbullying (video) and protect the LBGT community. Employ Blockchain to preserve citizens rights or simply create a community and start the conversation (TEDTalk). And as this court case proves, they can also stop AI from violating our civil rights. There is a list of about 64 examples below to inspire more of them.

You can bookmark or embed this sheet to have the latest in CivicTech. The sheet will be updated in real-time whenever we add more to Legalpioneer. Would you like to be notified of updates? Request an invite to our Recon project.

Recon 3
Whiskey, Wine & Water: How Funding Flows Through LegalTech
Whiskey, Wine & Water: How Funding Flows Through LegalTech 1024 544 Raymond Blijd

This year we’re on pace to set records in Legal Tech funding. Crunchbase and CB insights suggest it’s too early to party. Here’s an alternative toast.

Whiskey

CB Insights reported this October an uptick in overall venture funding of Legal Tech companies yet noted that seed money is down. This shouldn’t have come as a surprise since signs of winter were visible as early as last year. CrunchBase provided an extensive yet grim breakdown of Legal Tech funding. Both reported that the number of deals in Legal Tech was up however, a downturn in investments is affecting startups across all industries. This downturn even resulted in Crunchbase questioning if venture capital has peaked and Techcrunch declaring the end of startups.

LP Status

This year we’re seeing bigger later stage rounds like Casetext raising $12 million for a total of $20.8 million or $24 million depending on who you ask. Likewise, we’ve witnessed record-setting seed rounds like Abfindungsheld $11.5 million (signup) or Atrium LTS $10.5 million. What we are looking at are anomalies which don’t represent signs of a strong legal market.

Here’s why: when the number of Legal Tech startups cumulatively rises each year but venture funding for this sector remains stable or declines, the net effect is less capital for the sector. This results in lower evaluations for younger startups. It’s also the reason why many are raising funds via Initial Coin Offerings (ICO) which further dilute evaluations. Samples are Smartcontract.com or Agrello. Just like a few good spirits will boost the taste in any blended whiskey, they also disguise the quality of the other added blends.

Wine

I stumbled upon this insight when skipping year by year in Legalpioneer Where. I noticed that the total amount raised remained stable or declined year after year as the number of startups grew, especially between 2015-16. The reason why this emerged from our database is the result of our tracking methodology which is different than Crunchbase and CB Insights.

The Legalpioneer database consists of legal- and regulatory startups with their approximate month and year of birth. Contrary to others, we go to great lengths to track dates to a month-level in order to provide this alternative view of the legal landscape. Adding the total disclosed investments for each startup enables us to expose the total amount of funding for a given generation of startups. Example: Peppermint Technologies raised its first round in 2015 but was founded around 2010 therefore we display them in the 2010 year bracket.

Tracking total investments for startups founded in a given year reveals the maturity of innovation in the legal sector in seasons. As Crunchbase noted as well: Legal Tech Class of 2015 was extraordinary. We noticed that 2011-12 is even better. That’s how I discovered: Legal Tech is like vintage wine.

 LP Where Timeframes

Water

Zooming out from quarters, seasons, all the way out to the entire lifecycle of startups offers another glimpse. One indicator for a healthy sector is the influx of capital, the other may be the return of that capital to investors. Barring death, there are two possible outcomes for startups: Aquisition or Initial Public Offering (IPO). Apptus is on track to IPO soon and is valued at $1.75 billion but next to them I have no others in sight.

We may even debate if Apptus fits the definition of Legal Tech but the fact is, IPO is an extremely unlikely exit for a Legal Tech startup. One reason may be that seeding startups with small amounts mean they have less time to prove their model works. Having a short runway in a market with notoriously long sales cycles is disastrous.

This leaves acquisitions as the most lucrative outcome. I’ve looked at over 80 acquisitions (signup) of companies in the legal industry stretching as far back as 1865. Usually, the price tags of these companies remain secret but it should be a safe assumption that it’s dropping with each new acquisition.

To summarize: an over-supply of new ventures in conjunction with a limited outlook on lucrative returns of investment is making the entire legal industry thirsty for cash.

Drink

This shouldn’t feel like a hangover. More deals means more activity and attention for the legal sector. Cheaper startups make more attractive acquisition targets for incumbents resulting in quicker not higher returns of investment. Increased competition for cash may actually produce more sturdy and diverse types of Legal Tech. Maybe these companies will broaden their horizons and not have such a strict view on what Legal Tech is supposed to be and who they should sell it to.

Here’s where Legalcomplex can help. Legalpioneer Recon (from Reconnaissance) is our next project in support of startups striving to succeed. We check if your company name is already used by any of the over 4000 startups in our database. You can match your concept against them and see if you are unique. Find out how many competitors you have and how much funding they have. Connect with like-minded companies and maybe partner with them. If you want this now, let us know here.

I’ll confess, I’m a single malt guy. Yet I’m open to any unique blend that lifts my spirit and that’s why I’m offering Recon for free.

Cheers!

Legalpioneer Ambition: The Future For A Fair Society Is..
Legalpioneer Ambition: The Future For A Fair Society Is.. 1024 533 Raymond Blijd

In June we stumbled onto something: we were able to machine-classify over 4000 startups in a unique way. Essentially, this enabled us to tell the story about the future of the legal industry. It’s all about Ambition.

Legal

After analyzing and classifying a wide gamut of private companies we believe operate in the legal space, we noticed a couple of shifts. First, between 2010-2015 about 124 legal marketplaces were created and some managed to raise $355 million like LegalZoom, Avvo, Upcounsel, and RocketLawyer. It looked like the beginning of a golden age. But after 2016 only 83 marketplaces joined with overall $3.2 million in investments.

In the same period after 2016, 121 startups in the legal sector claimed to employ predictive analytics, machine learning, natural language processing (NLP) or some type of artificial intelligence (A.I.). A similar effect appeared when looking for startups using Blockchain. More blockchain startups (26) appeared since 2016 than we have seen (25) in the past five years before 2015.

These smart legal startups gathered $26 million (A.I.) and $21 million (Blockchain) in funding. Please note: we can only track disclosed investments and initial coin offerings (ICO). Seeing the creative ways one can raise funds nowadays, our numbers may be just the tip.

A marketplace is an ambitious winner-take-all strategy in any market. Its success requires massive investment in service experience design or marketing to capture mindshare. Marketplaces also require many lawyers to sustain it and therefore we classify them as Law. If our algorithms sense startups use automation or prediction to reduce the need for lawyers, we classify it as LegalTech.

RegTech

If we need to hire LegalTech to help manage risks, RegTech is the Do-it-yourself (DIY) approach. Startups operating a RiskTech, Fintech, WealthTech or Tax business heavily rely on legal as a component to operate. They are developing a form of LegalTech Lite to cope. Health products need HIPAA and Cannabis operators face a slew of competing regulations. Basically, any business accepting payment will encounter fraud so they need to know their customers. And anyone going into business first needs to become bonafide.

Payment processor Stripe raised $440m to grow their business by getting customers onboard fast. Apparently, it doesn’t want to rely on any current legal service construct, like law firms or marketplaces, to scale their growth. Therefore, they build Stripe Atlas to process incorporating companies just as fast as it’s able to process their payments.

Hence startups offering compliance and security as an integral or stand-alone part of a product are being rewarded by investors. As of September 2017, Legalpioneer tracked about $13 billion in funding and 10 billion (76%) went to RegTech startups.

Ambition

In summarizing: since 2016, Law went from $355 million to $3.2 million while the total of Smart LegalTech startups received $47 million (57%) of funding with just 147 (15%) share of startups. In that same period, 26 Regtech startups with Blockchain captured $329 million and 42 AI Regtech startups received $72 million to gobble up all high-volume legal work.

It’s almost an unfair fight for legal industry incumbents: at the top, high-value work can be automated by smart LegalTech. At the bottom, better funded and equipped companies are processing it away from the legal market. In the middle, legal services are commoditized by marketplaces and legal spend analytics startups are stabilizing the prices.

This shift isn’t just to free up lawyers for higher value work there are trained for, rather it’s a shift towards higher value work they may not be equipped to handle. So if the traditional legal industry wants to survive, it has to look at the bigger picture, engage a wider audience and show the ambition to redesign itself.

If Henry Ford would ask Lawyers what they wanted, they would answer: Faster Documents

Here’s one that blew me away: a futarchy government (Wikipedia) is a society without legislation. Instead, governments run on economic policies coded in smart contracts and executed on the blockchain. Now before you ask me about my prescriptions, keep in mind: someone is actually building this and they got $12.5 million to succeed.

Dashboard

Remember, while LegalTech looks at AI and Blockchain as a hammer looking for nails, Regtech already poured both technologies into the foundation of their houses. Houses with no windows we all will reside in. Houses anyone can break into as the scale of Equifax breach revealed. The future of a well-balanced and safe society is to ensure it’s foundations are fair and the question is: who engineers that?

The mission of Legalpioneer is to figure out legal’s future so we created a couple of apps to achieve our goal. Legalpioneer Status app is updated daily with fresh metrics on the state of LegalTech and Regtech. We are still tweaking the algorithms on Legalpioneer Ambition but feel free to test drive it. To see this story come alive and visualized, play around with Legalpioneer Where. Check out the video below and see how you can run your own analysis in areas of interest.

Wondering something or have a suggestion? Reach us on Twitter: @Legalpioneer, Linkedin or email: Raymond-at-Legalcomplex.com.

My 7 Easy Steps to Stay Creative and Outsmart Robots
My 7 Easy Steps to Stay Creative and Outsmart Robots 1024 576 Raymond Blijd

Some say creativity is a gift. Others may see it as a curse. I value creativity as a dreamscape and here are my notes to help you do you.

What is creativity to me? The ability to describe the invisible. To be able to recognize what is missing by seeing what isn’t there. We all are creative but sometimes we treat it as a disease. We tend to pity the dreamers who can’t capitalize on it. However, a rich imagination builds a wondrous world where anything is possible. 

Here are 7 practical tips to nurture your inception:

1. Listen to new music: I take a different run route every week. Try to mix & match outfits as often as possible and gamble on diets.

Why: Our brain is like any other muscle in our body, it only grows by resistance. Therefore you have to actively feed it new pathways and discoveries. Be wary of routines, they are the sedative to serendipity. Only use them to be more efficient in boring stuff like brushing your teeth. Or try brushing with your left :).

2. Talk to people. I listen, really listen carefully and transport myself into their universe.

Why: Introverts are seen as naturally creative creatures and their secret is listening. Have a genuine interest and empathy for others. It will enable you to have new experiences which will seed your inventions.

3. Avoid safe: When faced with 2 choices: known and unknown. Depending on the context, I always force myself to go for the unknown.

Why: It’s the only option that will provide you an opportunity to learn. It’s the main reason why established companies only manage one disruption in their lifetime. That is usually when they startup.

4. Be open: I summon my inner child and suppress my life experiences for as long as I can before I pass judgment. I like being wide-eyed wowed all the time and I don’t much care if others perceive me to be naive.

Why: You should actually always reinvent the wheel but questioned it each time. It is only a total waste if you did not learn that you don’t need a wheel. Celebrate and savor your many trials and errors because innovation is often the byproduct.

5. Force pause: Avoid pressure and take breaks. I wrote here about kicking my smoking habit. I did not mention it most beautiful side-effect: a 5 minute -albeit drug induced- charge of inspiration.

Why:  Although constraints can be a source of creativity, time pressures mostly speed up the idiocy of finding the safest solution (3). I can’t remember ever having a flash of brilliance when forced to have one.

6. Let it Flow: I shower (7) with my splash-proof iPhone so when I get hits, I immediately jot them down and shelve them.

Why: Don’t delay or get distracted in capturing your lightning. Don’t worry about getting the entire concept or finishing your idea on the spot, just trust your instincts. You eventually be inspired again and be able to piece it back together.

7. Find your dawn: Early in the morning, late at night or after each nap I get bursts of brain waves. In the shower or the bathroom..well, you catch my drift.

Why: Finally, perhaps the single most effective tip I can provide is my discovery of not why I’m creative but when. As said: we are all creative but we, unfortunately, suppress our creativity by seemingly more important thoughts. I just love to surrender my mind to fancy so please indulge your fantasies.

Remember, your ingenuity is an irrational thunderstorm of thoughts, while computers are the opposite: logically calculated algorithms.

So our creativity just may be one of our best ways to outsmart robots.

Why We Hunt For Harmony in LegalTech
Why We Hunt For Harmony in LegalTech 1024 576 Raymond Blijd

After hunting 214 apps on Producthunt and gathering them in the Epic Collection, here are some new theories on what a legal app really is. Or should be.

Two years ago I had 3 insights:

  1. The top voted legal apps are least likely to come from legal professionals;
  2. Practical is popular with hunters;
  3. Blockchain is an epic technology;

About 143 apps later, I’ve noticed some other trends.

Contracts & Taxes

One of the 27 tax apps I saw was literally called Death & Taxes. Ironically, it has since died. Nonetheless, the most hunted apps help you run your startup and deal with..contracts. Since most apps help you generate contracts, I was a little disappointed in the number of apps that actually help you understand them. Nevertheless, I was charmed by the simple beauty of some generators like this homegrown one: Docontract.com

Privacy & Harmony

With just 30 apps totaling over 11,000 votes, Privacy and Civictech seem to be dear to our hearts. To illustrate this strange struggle: Arrest SOS can be classified as a Marketplace but it feels more like CivicTech. Because our reality of increased risk, surveillance, and scrutiny, shouldn’t diminish our right to a fair treatment by those in power.

In another spectrum, I discovered examples where privacy was exposed by choice to ensure safety. Apps like CitizenWatcher or Companion literally help you navigate your city like a Redzone or be a Vigilante.

Patterns & Warnings

If you visit the Epic collection you’ll see the top 3 mirror the pattern described above: first is a curated source for founders, and the third is a payment app called Privacy.com. However, it is the second on the list that had my attention. A message for the Legal Industry: #FinTech is here.

Btw, if you are a little confused by the methodology of tagging legal startups e.g. isn’t Patents part of Intellectual Property? Or when is FinTech a legal app? It’s tough and you can read here some of the challenges of classifying legal. Ultimately, tagging legal apps according to legal principles may not make any sense in the real world. Besides our lives are already complex, we don’t need legal to make it worse.

So the rationale is to capture the apps that seek to reduce complexity and restore harmony in society. I believe that is what the legal industry was trained and hired to do.

Join the Hunt