Hallucinations: Should data make laws? Yes, and here’s why

Hallucinations: Should data make laws? Yes, and here’s why 1920 1080 Raymond Blyd
Read time: 3 min.

As a society, we evolve and make new laws. Laws are based on opinions we’ve formed after processing new information. What is new information?

TLDR: Thursday, 23 February, we presented our vision of the future of law. And our dream is data.


We’ll focus less on numbers this outing. The numbers aren’t pretty, so let’s not pile on. On the bright side, it seems we’ve hit bottom. We calculated a recovery around February. A calculation we shared back in August 2022 with Evidence in support: the US Federal Reserve only raised the interest rate by 0.25 this February. Previously, they raised rates by 0.50 and 0.75. Don’t pop the champagne because we are not an economist. Worse, most economists are actually sober about what lies ahead.

Another bright spot we shared with Law360 in early 2023: an avalanche of A.I. legal apps focused on consumers. All running on OpenAI. Talk about building a house in your neighbor’s backyard. This follows two other insights we shared. First, OpenAI is an operating system powering a new paradigm of tools. Second, by their own admission, OpenAI, and most apps build on top, will struggle to turn a profit. Remember, ChatGPT is a killer app, built by a non-profit receiving substantial backing from those with foresight. Realize, that we lack these ingredients in Europe and most other places except perhaps China.

Yet, working on something as fuzzy as “artificial intelligence” feels delirious. Note that the OpenAI dataset cut-off is 2021. You can ask ChatGPT to check this fact itself. So whenever GPT is faced with something after 2021, it will hallucinate. According to Wikipedia: artificial hallucinationis a confident response by an AI that does not seem to be justified by its training data”. This brings us to the point of this analysis: can we distinguish fact from fiction, and will we care? Welcome to a world of weirdness, which is our reality.


Now humans fake it until they make it all the time. Heck, the entire venture capital ecosystem is predicated on one principle: confidently project growth without proof of product-market fit. We closed 2022 with $496 Billion in capital committed to 696 funds looking to invest. This boils down to the craziest stat we’ve ever calculated: $1.3 Billion a day. That is how much is available for those looking for cash. Who’s getting a check? Here is a calculated answer. Contrast this with the reality that fewer tech companies are being founded. And the ones that already exist will struggle to grow.

Now that we’ve established that neither computers nor capitalists need facts to make decisions, the rest of us do, right? Yes, but we rely on computers that are funded by capitalists. Since we’re banning TikTok everywhere in the West, it’s obvious we don’t trust computers from communists. While spying is often offered as the reason, the underlying fear is seldom articulated: influence. With Brexit and Cambridge Analytica still fresh in our minds, it’s clear what guides our decisions: algorithms. In “A.I. the struggle“, the mini-documentary shows the stats and stories which illustrate the challenge. The dollars behind the data we need for our decisions are too overwhelming to dampen.

Surely, the law and lawyers can stop it, right? Actually, legislators created this problem in the first place. And lawyers are ill-equipped to handle any of it. Currently, before the US Supreme Court, there are a few cases around a law named section 230. This law allows those who create algorithms to not be liable for their impact. Pretty sure the lawyers confidently presented a legal argument, with no legal precedent, to sway the Supreme Court. The exchanges that followed revealed that those arguments weren’t convincing. As Justice Kagan admitted about the Supreme Court: “These are not like the nine greatest experts on the internet.”.


It’s likely that the courts will kick these cases back to congress to legislate. Herein lies the paradox, neither legislation nor litigation solves these problems. In “A.I. the struggle”, we pitted the Video Assisted Referee (VAR) against Goal-line Technology. If you watch Football every weekend, you know the drama with VAR. The VAR is nowhere as consistent as Goal-line Technology. Ultimately, that is the dream: rational, data-driven legal decisions. More than a copilot, much like an autopilot. Call it Autolaw. Are we there yet? Promise, we’ll let you know when.

Meanwhile, catch this clip, which we made six years ago to illustrate this legal industry journey. And promise us to think about the path our society is on.

Funding Legal 2022: A Tale of Three Totals

Funding Legal 2022: A Tale of Three Totals 1920 1080 Raymond Blyd
Read time: 3 min.

Funding in Legal totaled $5.38 Billion, we also have $3.43 Billion and $4 Billion. What’s the difference? Allow us to explain.

Funding Legal 2022

Funding legal is a multiverse of investments in different areas. Usually, the legal tech space is seen as a horizontal market for legal professionals. In reality, the influence on investments in legal comes from different verticals. Vertical such as Dropbox acquiring Formswift for $95 million. Before we travel through the different dimensions of funding, here are our 2022 numbers:

Funding Legal 2022
  • Raised: $5.38 Billion – down 23%;
  • Deals: 457 – down 2%;
  • Investors: 1017 – up 14%;
  • Average round size: $11.8 Million – down 21%;
  • Average seed check: $1.7 Million – up 35%;

This is private capital funding and excludes any mergers and acquisitions. These totals tell us that in 2022, more investors invested less capital compared to 2021.

The analysis is a filtered view of the legal tech space. A closer look at the image will reveal the filters we used to achieve this view. We left out a €700 million credit raise from a Dutch conglomerate. Also excluded are Tax Tech and Consulting (aka Law Firms). Curiously, we find law firms raising private funding more often.

Funding Legal Tech 2022

Law360 collects its own numbers. Their analysis, included the Topicus deal and Governance, Risk, and Compliance (GRC). GRC is a big space that we track separately. Here is a concentric circle chart of funding in GRC (yellow) and Legal (purple). You’ll notice that GRC has more-, and bigger circles. Now, are you ready to enter the multiverse?

Funding GRC 2022

The legal industry earns most of its money serving businesses. Essentially, legal helps companies get paid with contracts or avoid losing money in conflicts. Capital & Conflict analysis revealed the most lucrative work for legal professionals is generated at those extremes. However, most of the volume of legal work happens between those extremes. These are high-volume / low-value legal interactions. And the tech that supports those interactions attracts more capital.

Let’s pick one area which made our dashboards jump this year: eSignatures. While most view this as part of Sales or M&A. Electronic signatures extend way beyond legal contracts and contract management. The reality is that more areas drive investment into e-signature. You e-sign your package when it arrives or the company policies when you join. As a matter of fact: you sign freight, lease, loans, mortgage, insurance, and many documents in many areas. We sign documents to prevent conflicts.

E-sign is about prevention, and so is GRC. In 2022, Governance, Risk, and Compliance captured $36 Billion in capital and only dropped 4.5% in funding. This drop is far less than the broader tech market has experienced.

Besides prevention, we also have protection.

Funding GRC 2022
Funding IP Tech 2022

Let’s ignore the NFT madness for a moment. Last year we saw the copyright investment on top. This year, IP Tech alone captured $6.83 Billion and was up 32%. Yes, that is more than Legal, with Contracts, E-Sign, Tax, and Consulting combined.

… let’s pause and allow you to zoom into those numbers…we’ll wait…

To encapsulate the above in a little anecdote: Netflix’s new ad-supported tier had some hiccups after launch. A major reason is content licensing restrictions are crippling the free offering. Didn’t Netflix ask copyright cops to track down sign-off using contract tech? If your core product is copyright, these risks shouldn’t play a role (pardon the pun).

In short, Legal will rely more on GRC for growth with prevention and protection as opposed to deals and disputes.

Finding Deals 2023

One way to find deals is to follow the funding. Funding numbers and charts not only tell us the past, but they also help us project. As stated to Isha of we do not predict, we calculate. Now, we are able to offer something no one else can: projected deals for 2023.

The 2023 deals are projected based on the last funded date and burn rate. Due to the delicate nature of this data, we’ll select a limited set of customers to share this with. We will custom craft ten (10) reports with our famous line charts, last seen on Artificial Lawyer. You pick a segment or area like Legal or Contracts. You get an export with the names and dates of all funding, plus mergers for 2022 and the projected deals for 2023. On top of that, you get to pick over 34 specific charts to generate insights on.

Need this now? Check Spark Matter, for details on pricing, data, and delivery.

Will Investors Keep Investing in Legal? We Calculated

Will Investors Keep Investing in Legal? We Calculated 1920 1080 Raymond Blyd
Read time: 3 min.

The paradox of investing in a slow economy is that it forces investors to invest in slow growth. Now, where does one find slow growth?

Before we run our analysis on investors and investing, let’s set the stage. We received two significant signs this quarter: Salesforce growth slows, while DocuSign beats analysts. What happened? Software as a Service (SaaS) growth has peaked, but not all SaaS companies will suffer. Salesforce was a wild ride and a model for modern profitable businesses. What model is next? Stick around for the answer at the end.

In Bora Bora & The Bahamas.. 

Sam Bankman-Fried is arrested in the Bahamas after losing $17 Billion. Elizabeth Holmes defrauded investors out of $945 million and will serve 11 years in jail. Meanwhile, Adam Neumann received the biggest-ever check for a new startup. This after SoftBank lost $17 Billion on his previous one called WeWork. Collectively, those three misplaced about $35 billion of other people’s money. How? Now, we weren’t in the room when they pitched, so I won’t speculate on the state of mind of investors. Yet, investors should be taking smart, calculated risks. Clearly, there was no calculation, so it wasn’t smart. 

Sequoia Capital issued a rare apology for losing $150 million on FTX. This is an epic firm that made big returns on Google, Youtube, WhatsApp, and LinkedIn. Yet they aren’t a household name like Shark Tank’s Mark Cuban. While many in my circle love the show, I remind them that it is mostly fake. When asked, Mark Cuban admitted to losing massively on Shark Tank investments. The worst was seen partying on Bora Bora.

So Yes, if you fit a certain profile, you can get (away with) smart people’s money. 

..A Billion A Day..

Dude! It’s a recession, where is the money? Since January 3rd of 2022, we registered 574 announcements of new funds raised. This totaled $324 Billion in capital commitments. Basically, a billion dollars a day is set aside to pay founders. Let’s pause for a minute and take in the breeze of the Bahamas…

We can’t explain how this is even possible. I suspect the answer will be surprisingly simple. Perhaps committing cash to this cause somehow preserves it. Maybe prevents people’s savings from getting lost. Again, we aren’t smart enough to calculate how people commit capital. Here’s what we do know. In the announcements, we looked for the following: 

  1. Amount raised; 
  2. Type of fund e.g. Venture or Private Equity; 
  3. Location;
  4. Who they Target, e.g. young or mature companies.  

Especially that last point is of interest. Target tells us who’s likely lucky enough to get money. This is pretty straightforward: funds pick either a sector or a stage. For example, some funds will only invest in Blockchain or Biotech. Others aim for early or late-stage companies. Case in point: as a founder, you’ve probably got a call from someone asking for your revenue. If you answer none, they hang up. Those are Private Equity people. Nice and polite people, if you have at least $200k revenue annually. 

Hence, Yes. If you have income, you have a shot at a cash injection. 

..Keeps Legal Away

Out of this massive mountain of money, there is just a particle of investors with capital focused on legal. Worse, if you read our last post, you’ll realize that they aren’t all nice and polite. Don’t despair and remember the first chapter: It’s not you, it’s them. Better yet, here is our final bit of data. And this is historic. 

For a brief moment, in the 3rd Quarter of 2022 something unique occurred. The number of seed-stage deals in legal surpassed that of later-stage companies. Take a deep breath and let that sink in. Nobody we know anticipated that this could ever happen. Especially now when access to capital feels impossible. Actually, now only long-term capital commitments are feasible.

Why? There is little to no growth in this economy. Our last post analyzed those quick paydays, and these aren’t in abundance. That is why funds are forced to accept longer horizons. We calculated a while back, we know one sector which has a stable growth curve. Albeit slow, so less sexy. How? Long sales cycles are repaid with slow churn. Customers of legal tend to stick around. They are calculated

In closing: Yes, legal will still get money even if we aren’t sexy. We can still rock in the Bahamas. 

Disclaimer: this post wasn’t written by ChatGPT. Better yet, ChatGPT can not ever replicate this outcome. You need our model running on top of our uniquely labeled dataset. So ChatGPT can copy this text but can never deduce this model.

Therefore the answer is models. They are the new model.

True Value: What Makes A Successful Legal Tech Exit?

True Value: What Makes A Successful Legal Tech Exit? 1280 601 Raymond Blyd
Read time: 4 min.

Answer: selling your company (stock) at the right time to the right buyer. Getting an exit timing right gets some really angry with us.

TLDR: Exit options are limited as capital gets expensive. Yet, who is buying and how they are financing it tells us that options have shifted.


A quick recap of how we ended up here. Legalcomplex started collecting companies that impact the legal industry. Our collection is broader than the companies that serve only legal professionals. We started with tracking the total amount of venture capital invested. We added mergers, acquisitions, investors, and the number of employees. Along the way, we made many friends. Apparently, we also made some rich, and influential enemies.

Those enemies reside in two camps: we don’t like how you classify our ‘legal tech’ and we don’t like you…period. We have an ongoing positive debate with the first camp. That last camp wants me to not exist. Why is all this relevant? Well, we got a reaction to our insight on successful exits by legal tech companies. By the way, I keep saying ‘we’ because I represent a community. A large yet less vocal one. One that believes in numbers, loves how we display data, and supports why we do it.

Let’s start with the numbers and, we’ll get to the anger. We started looking at who, and how behind acquisitions. Here’s what we found:

  • 901 in deals where 892 were unique and 16 changed hands more than once;
  • $59.1 Billion paid out to targets (adjusted for inflation);
  • 11.9 average age in years.

This is our third analysis on exits, and I recommend checking The Study section for the one we did with Law360. This new analysis will highlight the backdrop of acquisitions.


Why the anger? There is no free money, so it is a lousy time in tech to look for an exit. Who’s looking? Founders and their investors. One is chill. The other one, not so much. Why? Well, big payoffs are off the table for the moment. Investors overloaded unprofitable companies with capital. Now, the people backing investors want their cash back. Why? An economy in recession is going to incinerate wealth. Specifically, the wealth created when banks gave near-zero interest-rate loans also known as free cash. This wealth was never supposed to exist.

Where did that free money go? If you were good at spreading dopamine, you could get a lot of free dollars. In general, that isn’t a bad thing if one of these bets pays off big. But here’s the problem: big payoffs happened in a bubble of excess capital. That bubble popped after 2021. As energy costs keep rising, people will be spending less. This drives down demand for all goods and services. All companies eventually suffer because there is little growth. Yes, everyone, including those that operate in the legal industry. Some will suffer less and, it depends on which area of legal you operate. There are still areas of brittle growth.

What do the numbers tell us? We can pick several angles to find growth. In the video, we see the popular areas. Another angle can be revenue, but let’s not get greedy. Let’s pick the average age of an exit after the company started. For geeks: the median age is 11.6 years. Now guess which type of companies lie below this median? Has the age increased or decreased over time compared to the average? Bottom line: what (type of) company will earn you a big and fast return? One which operates in areas with naturally fast growth.


It is our policy to be careful using names. We have empathy for those who build a business because it is really hard. Bootstrapping one is even harder. But bootstrap gives a bigger return to founders. Venture Capital (VC) backed companies offer a faster return. VC ventures artificially power growth, while bootstrap relies on organic growth. Now that growth is scarce, we see how VCs act when they’re off their medication called cheap capital.

Enter Private Equity (PE) firms that offer early retirement to founders. Specifically bootstrapped ones because they show evidence of organic growth. Of course, there are clever companies bargain-hunting for attractive tech and talent. All this pushes VC big payoffs further into the future as founders opt out early. So what options do companies have? Here are the possible exits, we have seen in no particular order:

  • IPO
  • SPAC
  • Acquisition by a Public Company
  • Acquisition by a Private Company or Law Firm
  • Acquisition by VC-backed Company
  • Acquisition by PE
  • Acquisition by PE-backed Company
  • Merger

Each option has a fingerprint that reveals what made the exit happen. And the smoking gun is how they actually pay for a purchase. We reported that acquisitions by private companies or law firms, usually do not disclose the transaction sum. One reason is that it’s a bargain buy of tech and talent. Another is that buying a revenue-generating company is really expensive. Blame this fact on all the fake capital floating in our economy. It caused to inflate the value of companies. An inflated value calculated from expected exponential growth. Exponential growth, calculated using artificial growth.


So are big exits impossible? Nothing is impossible, the question is big, for whom? Using the above framework, we’ve seen which exit happens more often. Which exit has the highest outcome? We can also track who is likely to acquire, looking to get acquired, or merge. In reality, few businesses are able to finance an acquisition from their balance sheet. That’s why we recently noticed a shift in two directions: where capital is coming from and where it is ending up. Ultimately, companies with low operational and capital expenses now get some breathing room. A room with fewer dope dollars and artificial growth. The space where we can spot true organic value.

Because we smell the burn from miles away, we can more accurately calculate the distance to the fire. Even though the reaction was needlessly vicious and inaccurate, we empathize with the anger. We do it out of love.

Editorial note

Usually, we load our analysis with hyperlinks to additional information.

This analysis has only one link.

Almost forgot:

The video above contains 1241 easter eggs.

One is about the future of our company and one is about the Marvel Universe. The other eggs tell the story of every single company that raised a disclosed amount of capital.

Stories made possible by true love.

GRC: Signs of Brittle Growth For The Legal Economy

GRC: Signs of Brittle Growth For The Legal Economy 956 499 Raymond Blyd
Read time: 3 min.

Growth in legal is noticeable in the earning reports by public companies and the funding patterns in private ones. What are the signs?

Recap: Growth in legal is picking up, but it relies on only a few areas in Governance, Risk management, and Compliance (GRC). This growth is fragile and depends on the price of energy.

Our latest chart on Artificial Lawyer, paints a depressing picture. To help us understand the pain, we answered some questions in our Capitals & Conflict. Essentially, the legal economy is a pendulum, which swings from deals to disputes. Between both destinations lies a string of risks the world wants to weigh. Those risks are the less sexy revenue boosters for both lawyers and legal technology. These boosters appear in funding and earnings. Let’s look at two of them.

Case in point: investment in procurement and legal spend analytics for corporate counsel is steadily increasing

Legal Tech Funding Continues to Decline – Artificial Lawyer

First Sign

We recently ran a report for a customer on the state of European Legal Tech. One of their requests was to show the new growth areas. First, you need a history of data to compare earlier funding with current ones. The algorithm then captures areas that see sudden rushes of fresh capital. Geeks will recognize these principles as standard deviation or variance. They are tools to tell us what suddenly goes up or down. And they told us that managing supply chain spending was a top priority for everyone. Supply chain means goods, services, and labor we need to produce. Supply chain impacts the legal economy because many want to:

  • Curb unpredictable spending like on legal support;
  • Draft better terms of services to receive supplies faster and cheaper;
  • Improve labor relations with better agreements.

This results in more demand for solutions that help you manage the above risks.

That sounds great, but why should we believe Legalcomplex? Fair question and one we asked ourselves every day. If you have data, you should rely on it. Are you scrappy, like us? A free resource you can tap into is the public stock market. We shared our top seven of the 31 stocks we tracked. Since we don’t want to anger the purists, we keep companies like Coupa, outside the thirty-one. This business spend management stock popped after reporting record earnings despite inflation. This Yahoo Finance video reports the Coupa surprise and the UiPath free fall. UiPath is a legal automation challenger and growth area according to some purists. Fun fact: UiPath gave Icertis a shout-out on their Q2 2022 earnings call.

What is Icertis? That is the #3 private legal tech company in the USA based on total funding raised. See more global rankings on Spark Map.


Public earnings are a late indicator of trends. The nuggets are usually hidden in how those earnings came about. This brings us to another surprising report by Australian Family Lawyers. This insider reported a 68% growth in full-year earnings. Not all growth is the same. Organic growth comes from a natural increase in demand, as opposed to cutting costs. The few publicly listed law firms provide us with this unique glimpse into what drives their growth. As previously mentioned, we can not share their deck, so we’ll just condense their tailwinds:

  • New (marital) legislation expanded the client base;
  • Economic pressures lead to more disputes;
  • The pandemic has reformed courts to process more disputes.

The AF Legal Group also elaborated on the use of technology for business development. Specifically, how they use behavioral analytics. AF has optimized its sales pipeline to capture customers based on their behaviors. In plain English: if someone needs legal support, they have the tech to reach them. Let’s be honest, the area lawyers would like to be more efficient, is how they can bring in more business. Let’s be realistic, the cost of acquiring a customer in legal is the most expensive for any industry. If you can not bring those costs down, any business is doomed.

If either one of these escalates, we will be in for some really tough times by February 2023

CLM Prices See the Most Inflation as Vendors Look Beyond Legal –

Final Warning

All the above insights are free for everyone to find. Like the glimmer of good earnings, DocuSign reported this quarter. Those numbers can change based on whatever is happening in the world. The one clear factor that is pressuring us all is our need for Energy. No need for fancy dashboards to watch inflation, go to any store and check the price of real meat. Vegetarians and climate-changers already warned us for different reasons. Price increases ripple throughout our lives, and legal is no exception. Essentially, legal is a luxury that can only raise prices when it has tailwinds. And the economic climate can change those tailwinds into headwinds.

In a world where the essential becomes expensive, luxury is the first casualty. This delicate growth the legal economy enjoys will evaporate once energy prices edge higher in Europe. This means: take out your economic compass and navigate towards growth. Currently, growth is visible in GRC, and you’ll see it in the second part of the video below.

They say: seeing is believing

Capital & Conflict: Five Burning Questions That Defines Legal

Capital & Conflict: Five Burning Questions That Defines Legal 900 385 Raymond Blyd
Read time: 5 min.

What is Legal Technology? Has it been successful? What are the top 5 Tools? How to make money and grow in Legal? Questions with answers.

This is not a “…I often get asked…” pretentious post to signal: hey people! I’m the expert! Let’s set the record straight: I’m not an expert, I refer to numbers as the expert. Being an ‘expert’ will automatically take away my right to be wrong. It robs me of the joy of serendipity. The pandemic showed us what happens when we rely on ‘experts’ without data: people die. So I decided, a long time ago, never to judge ideas. I, much rather discover them. Ultimately, the market decides who’s right or wrong, I’m just keeping score.

Our Best Answers

Despite the above, friends ask me to chime in on topics. I report the numbers to the best of my ability and limit my opinions to possible explanations. This year, we’ve been quoted 14 times by the largest news outlets in Legal. In 2021, it was just 3 times. This is not a sign of success, it just shows more are getting interested in numbers. Even so, the majority of questions come from conversations I have with enterprises, entrepreneurs, and educators.

Last week, I spoke with academics from Norway about the definition of legal technology. As I gave them my answer, I encouraged them to come up with their definition. That conversation inspired me to write this. Some say we find the meaning of life, not in the answers we seek, but in the questions, we ask. These are five burning questions with answers.

What is Legal Technology?

1. The first answer I ever found was on Quora. I searched, but couldn’t find the original post. So I’m summarizing this from memory: software used by lawyers to process legal data. Currently, this definition covers a declining set of tools. It doesn’t include software used by companies and citizens to process laws. Respectively, these are labeled by us as RiskTech and CivicTech. Now, ‘Legal Tech’ is mostly a marketing term used to win business from law firms and lure participants to conferences.

We use a more general definition of software supporting the law (not just lawyers) to qualify profiles for Legalpioneer. However, that definition covers just 31% of companies we have in Spark Max. Do more businesses impact the legal industry? Insurance, Biometrics, Security, Supply Chain, and FinTech come to mind. Of course, we also include data analytics companies that sway public opinion and find bots on Twitter.

Has Legal Technology been successful?

2. No, was my answer at the Amsterdam LawHub debate. While it may have been so in the past, wins have been few and far between in the last decade. Thomson Reuters, Lexis Nexis, and Wolters Kluwer rode a lucrative wave of legal publishing into the digital age. However, that growth was fueled by copyright law, not technological innovation. While the world embraced disruptions like the iPhone, Airbnb, Uber, and Spotify, lawyers continue to rake in record profits with a millennia-old model.

Checking the stock market today, the big three still top every new entrant like Legalzoom, DocuSign, and FiscalNote. Even the eDiscovery providers are all lower than their initial listing. There have been spectacular growth stories and big acquisitions of Legal Tech companies. But these were little miracles. Like a startup in The Netherlands called Legal Intelligence. Despite being born in the backyard of Wolters Kluwer, they grew to break their monopoly. Likewise, Dutch SignRequest and Clocktimizer can both claim better exits than counterparts in major markets with bigger budgets.

What are the top five Legal Technology companies?

3. Based on usage? We got this question from Law360 and our answer was a bit controversial. I came up with two lists: my favorites and tools with a large user base. Here are the top five based on adoption and usage to process legal data:


Turbo Tax;




PDF tools are used by lawyers perhaps more than any other profession. Legal needs security and relies on continuity. In Gaslight, we highlighted these essential requirements for legal. In commerce, we use PDFs to lock up revenue in signed contracts. Wonder why Google may have dropped contracts analytics to bet on e-Signature? The same reason Apple launched their e-Signature tool, way back in 2017 WWDC. Yet, only after a smart question on our mention in, did it hit me where this is going. Keep reading, the reveal is below.

How does one make money in Legal?

4. The short answer is capital or conflict. Whenever there are big financial transactions or huge conflicts, legal talent will laugh all the way to the bank. It doesn’t matter where we are economically or politically in the world, these two conditions are always present. Did you click the link about the record profits big firms made in 2020? Don’t bother, we calculated revenue per employee for top Dutch law firms and came up with $18K a month [NL]. Just imagine: a starting salary as a janitor at a top firm could be plus $10,000,- a month. Just kidding.

Does technology help? Yes, the tech that closes the connectivity gap. The pager, email, and blackberry were all eagerly adopted by legal professionals. Research tools, which kept track of the competition, flew off the shelf. Tools that help professionals connect and be in constant communication with clients were instant hits. This could explain why many firms elect to build instead of buying legal tech. Noticed some firms partnering with outsiders? Essentially, they are looking to create a Robot Rainmaker: a tool that brings them closer to capital and conflicts.

How does one grow a business in Legal?

5. Like any other business, sustainable growth comes from identifying durable demand. For legal talent, the business from capital has fallen off a cliff. Companies struggle to raise money from public & private investors, banks, or other companies. The drop in deals occurred in initial public offerings (IPO), venture rounds, debt financing, mergers, and acquisitions. This leaves lawyers scrambling to find legal fees. Don’t panic, there’s still one space that’s delivering fat fees. So I’m very curious if the 2022 revenue numbers will top 2020-21.

Meanwhile, as the capital market collapses, we see conflicts everywhere. Case in point: Twitter is suing Elon Musk and claims damages. Correct, claims are the fourth catalyst for legal growth. So, don’t worry about legal talent, let’s worry about legal technology. We published a poll asking: If tech could help Elon or Twitter win. Most voted for talent, not tech to be the deciding factor. Why is it so hard for the tech, to succeed in Legal? Because, laws, made by lawyers, prevent it. This was our conclusion in our best-read analysis: copyright law boosted publishing, but it breaks automation. However, there is hope.

How can legal tech grow again?

By acknowledging why growth stopped. Most tech companies follow a familiar path: a founder gets frustrated with a problem and searches for a solution. They end up building one, convincing investors it is unique, and capturing curious early adopters. After the curiosity wears off and adopters churn, the dopamine and dollars run out.

Why did tech growth stop? Well, maybe you already picked up on two hints: “searches” and “unique”. Noted in ‘Challengers‘: most solutions aren’t unique because founders didn’t properly canvas the competition. Growth becomes difficult when customers have better or cheaper options. Growth becomes impossible when behaviors change and customers quit the product. The first is now happening to Netflix. The second is why some of you saw a Sony Walkman for the first time in Stranger Things. This is economics 101: supply and demand.

The Right Questions

One can forecast downfalls like Walkman or iPod, by measuring supply and demand using the CAT Method. Running calculations on close to $1.2 Trillion in deal data, Spark shows us where the action is. Following deal flow tells us that Biometrics will one day replace antiquated e-Signatures. However, history tells us that laws won’t allow it. Nevertheless, numbers reveal these spaces. That’s why we’ll keep taking snapshots and sending them back to earth.

So before you start running up that hill, check our two TikToks about markets and growth. The message: numbers will help you find new or different customers in bigger and better markets. Looking at current market conditions, entrepreneurs will have little choice, but to start asking the right questions.


Funding Legal: Feast on Funds or Hunger Games?

Funding Legal: Feast on Funds or Hunger Games? 2048 1192 Raymond Blyd
Read time: 3 min.

Go FOF yourself is the advice we got from Sequoia Capital, which means go find funds. Yes, there are plenty of funds, but where?

The Sequoia Capital story appeared in Fortune, which is behind a paywall. We won’t bother to offer a link. We find it ironic that you need money to access a story about saving money. Since we liked the tagline, we used Google to find the PDF. These stories all tell a familiar tale of The Hunger Games, which is either you earn or you burn. It feels like the Sequoia graphic below encourages us to burn as opposed to earn. Stick around for the end, we’ll share a radical concept.

Hunger Games

Times are tough and most companies working on dreams are in for a rude awakening. We posted OneTrust laying off 950. Law360 reported Notarize cutting a quarter of its staff. Both are extremely well-capitalized companies that have raised $1.14 billion in total…yes, a billion. Yet, there were signs of distress. OneTrust latest round was a “bridge” round of $6.4 million, which was nowhere near the previous $210 million round. Notarize last round was undisclosed.

Bridge rounds will become a reality for most. AirSlate raised a hefty $51 Million at a $1.25 billion unicorn valuation. Yet, their previous round was $50 million. So while round sizes are still big, they seem to be hitting a ceiling. Does this mean that the well of infinite capital is drying up? Actually, the opposite. Never before have founders had so much choice in financing options and instruments. And these aren’t just in the States.

Feast on Funds

Last Friday’s dope drop revealed the number of new venture funds in 2022 was 139. Well, by Tuesday, that number jumped to 153 funds announced. These funds focus on areas ranging from a founder’s background, a company’s stage, or its impact on our lives. They aim to support people and products through various stages of their lifecycle. If you are an early stage / no revenue founder, there is $2.9 billion sitting on the shelf awaiting your submission. If you have a bit of revenue, there is access to $11.1 billion. Ready to retire? There is $5.3 billion in private equity looking to buy you out. Remember, this is real money pledged in the last 6 months.

If all else fails, sprinkle in some blockchain and get a slice of $9.5 billion. No kidding, despite the crypto meltdown, it is the single biggest area of focus for the new VC funds. While it has dropped slightly over recent weeks, the average size of a crypto company’s first round is $8.3 million. Kidding aside, The beauty of this abundance shows us the hunt for unicorns is still on. However, if you want to be hunted, you have to come out of hiding.

Capital from Customers

Raising capital from investors can never be an end goal. Companies are rediscovering the lost art of raising cash from customers. This radical practice is known as generating revenue. Btw, this also opens up the option for Revenue-Based Financing. Google it, and you’ll discover many fellow startups offering this financing instrument. Speaking of fellow startups, I’m happy to report that three of our customers have recently informed us of revenue growth. One is on the verge of becoming profitable. What do they have in common? They are in the business of helping companies reach customers. And the way to reach customers is by coming out in the open.

Along with our customers mentioned above, we also noticed this growth. We added 168 new profiles to in two weeks. This is about 12 companies every day. Why the sudden surge? Companies need customers, so they are boosting their sales and marketing. The recently added weren’t all newly founded companies, but mostly dormant ones. Usually, these companies thrived on a few loyal, happy customers to grow via word of mouth. Perhaps now, the economy is shutting those customers up.


A founder’s reality is that a new product takes time for the market to adopt. Some ideas take longer than others to become sustainable. It takes crazy, slightly obsessive people from all backgrounds to keep going when the world tells them to stop. You can’t keep going if you and your loved ones go hungry or homeless. So we require money to eat, build, sleep. If more do this, it increases our chances to change the world, create jobs and a few bank accounts.

So where are those funds? They are now part of Spark Mini at, ironically, no extra charge.

Geo: Gauge Growth for Legal Tech Globally for Free

Geo: Gauge Growth for Legal Tech Globally for Free 1988 960 Raymond Blyd
Read time: 3 min.

What number would indicate growth for the legal industry? Well, there are several ways to measure this, but we’ll boil it down to one.

First, some unfounded fear is making the rounds about a recession. Relax, every crisis brings new opportunities. Legal services are usually required by law and therefore recession-proof. Legal technology, aimed at lawyers, is mostly a luxury. They may have a real fight on their hands. To survive, here are some tips:

  1. Lower your burn and pricing, it’s your superpower;
  2. It’s a great time to restructure your debt;
  3. Make friends with your customers;

These are the updates to our Recession guide. Now, if you came here to thrive, you are in for a treat. Especially now, new ways are opening up to grow. How do you track them? Keep reading.

Trends & Traction

What trackers? Economists watch one metric to measure the economy, they watch jobs. More precisely, the number of jobless claims every week. Adding jobs is a significant sign of growth. Another way to follow growth is by checking stock prices for industry-leading companies. Specifically, check the percentage of a stock price increase or decrease over a six-month period. Also mentioned more often are reports of earning misses, profit warnings, hiring freezes, and layoffs. A new dashboard destination is, they track layoffs in the tech sector.

Why track these? Tracking helps to see where to focus energy in terms of business development. You may like to know which customers will grow and the ones that won’t take your calls. It helps us identify which areas are about to pop or drop. Example: during lockdowns, travel drops and tech pops. Cruise ship stocks fell hard, while Zoom meetings made record gains. After lockdown, these trends seem to reverse. If you were investing in Crypto and NFTs, you’ll know exactly how this feels.

Will this last? No one can predict the future. Speculating drops and pops, one can only plot data from the past and imagine the next dot. The pandemic was a pressure cooker that was stewing data on customer behaviors. This provided us with an important lesson on the difference between discovering trends and finding traction. We reported on legal trends like claims and estate. Checking these areas now, we see slowdowns or a return to pre-pandemic levels. In short, trends are a sign of growth and traction lets us know if trends are sustainable.

Capital & Conflict

What grows Legal? Companies and citizens buy legal services to operate within the economy. They buy contracts from lawyers to onboard employees, secure loans, and complete deals. They hire a counselor when these events don’t work out and there is a conflict. Contracts secure cash and courts resolve conflicts. Ultimately, regulating relationships is why we need legal. This need drives demand for different types of legal services and technology.

What grows Legal Tech? did an excellent analysis of May earnings reports for some public legal tech companies. Most legal stocks bounced back slightly after the reports. Yet, the public companies only cover a few areas of legal technology. The majority of trends we can track come from private investments. Where venture investors allocate capital show a trend and a glimpse of traction.

Where is traction? Contrary to popular belief, we can not directly correlate major investments with traction. Tiger Global and Softbank poured huge sums into startups and now respectively lost $17 Billion and $27 Billion. To understand how this happened, check E80 and E81 of the All-In podcast. If you can’t spare two hours, then just jump to minute 21:10 of E81 on YouTube and listen for two minutes. Now we made a layout of the land in two charts: one on legal and one in general. Each explains why the public rewarded legal for its stability and private investors gave more capital to fewer players.

Growth & Geo

What’s the one metric? For now, we’re using the total raised per area as a measurement for growth. To illustrate, we developed a special interactive board called Spark Map. You’ll see the top 3 companies in over 130 countries for the first time ever. And it’s free. Since the US is so huge, we made a special USA version with a state-level ranking. We hope it sparks debate on how and what to measure. As noted above, more money doesn’t always matter. Measuring something as elusive as market growth perhaps needs more nuance.

What’s the better metric? We’re adding growth in full-time employees (FTE) in Spark Max. This will be a version of jobless claims for legal tech. Can we measure all employees exactly? Yes, we can, and we do, however it may actually be imprecise. Kinda like counting every raindrop across an entire landmass. You can better measure this by the square inch. The key is to measure each downpour and compare them.

Wait, there is more! Legal is a niche, so may not get mentioned on That’s why legal deserves its own lay-off tracker to keep tabs and alert our customers. As noted in our legal tech unicorn analysis on, we’re checking burn and growth of every profile. We’re watching you. Now, go grow!

Editor’s note: This update completes stage 3 of 5 on, and I hope you’ll enjoy the many…many tweaks we made to the site.

Screen: Legal Tech To Safe Children from Gun Violence

Screen: Legal Tech To Safe Children from Gun Violence 2396 936 Raymond Blyd
Read time: 2 min.

There is so much going on. But none of it matters if we lose sight of securing the safety of the most vulnerable: our children.

Lately, Legalcomplex had some successes that we would love to share. It doesn’t matter because our mission is to help all legal technology succeed to create a safer society for everyone. This includes making our world safe for children. We refrain from addressing social justice issues. We did not analyze Ukraine, George Floyd, or any of the many ESG challenges. However, we do make one exception: children. Our first was LawKit: a legal framework to unlock smartphones inspired by Amber Alert. The second was Privacee: a video format to help children understand privacy in this complicated digital world.


This third analysis pales in comparison to the heartbreak of children mass shooting children. Maybe some see mass shootings as a typical American problem, but it also happened in Alphen aan den Rijn in 2011. I worked in Alphen at the time this happened, and it shocked us all. The parallels are that both incidents involve young people with known mental health issues legally acquiring assault rifles.

This brings us to what we can do to prevent gun violence. Obviously, this is a complicated matter without any easy fixes. One of these fixes is background screening. Here’s a quick reminder of our current reality: we’re actively screened on every aspect of our lives to determine purchase intent. Any action is tracked with or without consent through smart devices. This data is utilized for commercial purposes since that is the most lucrative business model. The question: is there a business model to save children from gun violence?


This is a very insensitive formulation of the problem, yet it illustrates the solution. Legalcomplex also captures FinTech and SmartTech companies along with LegalTech, RiskTech, and CivicTech. This provides a broader perspective on how technology impacts the law. While tracking and tagging investments across these spaces, we noticed something. The companies that build SmartTech to process data are third overall in total capital raised. After Payments and Credit technology, processing data is the most lucrative problem to solve.

In a weird way, the answer is Yes, there is a model, albeit morbid. If the majority of data processing is to find customers with purchase intent. Let’s agree that it does not help if the purchase intent is to kill. We want more customers, not less. This natural progression for sustainability is what drives industries like electric vehicles and ESG. One of the 21 examples, linked in the Spark Max pdf, is screening your Tinder date. Just Like Uber and Airbnb quickly realized, it hurts business if a service is not safe for customers. That’s why both deploy screening tech.


Let’s reiterate this point: this is not an easy fix. So far, financial security drives most successful legal technology advances. However, most data analytics solutions aim to save the economy, not society. They were built to protect companies, not citizens. Worse, when the government does the screening, the results can be pure evil. Clearview AI is a facial recognition company that sells mostly to law enforcement, as seen in the AI documentary. On May 23, 2022, the UK government fined them almost $10 Million for privacy violations.

On May 30 of 2022, the Dutch government acknowledge it is institutionally racist. Since 2001, the Dutch IRS used racial profiling technology to find fraud. What may surprise outsiders is there will be no civil or criminal prosecution, since everyone operated according to the law and was backed by the courts. Ironically, this tragedy is known as the ‘Childcare Benefits Scandal’.

Our lesson is that legal tech can be unconstitutional, even if it’s based on legitimate legislation. Our message is that legal data analytics is designed to take care of our cash, not of our kids. Our hope is that we built better screening tech to protect our future, which are our children.

Funding Legal 2022 Q1: China, Copyright & Carbon

Funding Legal 2022 Q1: China, Copyright & Carbon 1860 605 Raymond Blyd
Read time: 3 min.

This is about China, Copyright, Carbon, and a new post-credit. This is the State of Legal Venture Funding for the first quarter of 2022.


Let’s jump right in: $1.78 Billion was raised between January 1 and March 31 this year by legal ventures. This is 10.6% less capital than 2021. The global pullback of risk capital from private companies is hitting the legal industry. Weirdly enough, we found more rounds completed and investors participating in this quarter compared to last year. We found 108 deals and 337 investors participating. So we got more checks from more investors, but those checks got a litter smaller this year. Why?

In our ESG analysis, we noted the $300 Million round by PatSnap and $138 Million by Fadada in early 2021. To understand Asia, we did a mini analysis on Softbank and China with investors like Tencent. Especially, Tencent went quiet this quarter in legal. Some say the slowdown is caused by China’s crackdown on tech and trade tensions with the west.

We got a ping from a LinkedIn follower to join this particular take on China. Measuring venture funding in Asia versus Europe and North America, this graph shows an equal percentage increase for each region. On the surface, it seems there was no impact on venture funding. Yet on closer inspection, we discovered that India is picking up the slack in Asia. That’s how Bengaluru emerged as the mini Silicon Valley of Legal Tech in our interview.


Now venture capitalists are feeling less venturous. Yet, they still need to find opportunities, so where do they go? To see opportunities, one has to recalibrate our vision of growth. The NFT and Web3 are still generating ridiculous graphs on Spark Max. However, this announcement gripped us: Microsoft bought Activision for $68.7 Billion. It’s the single biggest acquisition in gaming and it cleared all anti-trust hurdles without a hitch. Huh, how?

The acquisition made every analyst play games and every attorney dream about those deal fees. Remember: lawyers have superpowers and some more than others. Copyright lawyers, like me, watching the new Halo TV series were thinking: Ooh this is the new Marvel Universe. They will be printing money in perpetuity. If you like to know what this word means in a copyright contract, ask Dave Chappelle.

If you like to really know what this deal means, pass the controller and pay attention. Noticed how iPhones got cheaper and their designs went backwards? It’s because all the attention is going somewhere else. Attention is going towards getting your attention. That is the most valuable asset and it is called Copyright.


Now, if lawyers aren’t calculating their cut on deals, they are litigating the conflicts between people. Usually, those conflicts arise when change collides with the need for things to remain the same. It is about the future we want versus the future we are going to get. That future is largely determined by our environment. While our environment consists of many chemicals, it is largely dominated by one: CO2.

Regulating and accounting for carbon across supply chains is generating even crazier charts on Spark. Supply Chain capture $2.60 Billion this quarter, which is a whopping 669% more than last year.

Up until this point, we only mentioned numbers from segment Legal. The supply chain and accounting numbers come from the segment Governance, Risk and Compliance (GRC). A single area within segment GRC managed to be bigger than the entire Legal segment and all its areas including Contracts.

That’s not all: accounting for carbon accumulated $172 Million of funding. This total set the radical record in GRC of a 933% increase over 2021.



You made it this deep, here’s your post-credit. Remember, we joked about analysts playing games? Well, we got slapped by this data. Most new NFT rounds aren’t about music, art, or virtual real estate. They are about games that render high scores as non-fungible tokens. Finally, you can say: Mom, I’m not just gaming, I’m minting NFTs, so gimmie the controller.

There is more: the average seed round for NFT games is $5.6 Million. The very first check these companies receive producing a website and nothing else is five million-plus in cash. That will give anyone street cred on Twitch.

  • Wonder how much your idea or company is valued? Spark Mini gives you the best answer;
  • Why didn’t you talk about LinkSquares and LawVu? That is Q2;
  • Will you discuss mergers and acquisitions? Yes;
  • When are we getting Funding Legal Q2? Leave your email in the footer below to subscribe for updates, and you get the analysis first;
  • Can’t wait? Ping me on LinkedIn.

Shelter Ukraine 🇺🇦

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