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Silicon Startups

Publication Date: 
May 20, 2013
Source: 
LTN Daily Alert
Author: 
Tam Harbert

Professor Mark Lemley and Roland Vogel, executive director of the Stanford Program in Law, Science and Technology, spoke with Law Technology News's Tam Harbert about the many legal tech start-ups coming out of Stanford Law School, making SLS the "vortex of this activity" and a "hotbed of entrepreneurship in the field of legal technology."

Editor's Note: LTN's Editor-in-Chief Monica Bay interviews Roland Vogl Tuesday at LegalTech West Coast, in the Westin Bonaventure Hotel in Los Angeles, at 3:45 p.m. There also is a panel discussion about Lex Machina at 1:30.

Stanford University is a legendary breeding ground for startups — Silicon Valley giants Google Inc., Yahoo Inc., and Cisco Systems Inc. all came out of the Palo Alto, Calif., institution's computer science and engineering departments.

Now, Stanford Law School is getting in on the action. In the last four years, the school has become a hotbed of entrepreneurship in the field of legal technology. Since 2009, at least five startups have spun out of the school. The first was Lex Machina, a company that maps electronically available patent litigation events and outcomes to build a litigation database.

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"Our motto is legal empowerment with legal technology," says Roland Vogl, executive director of the center as well as Stanford's program in law, science, and technology. The center wants to help not only the legal profession but also serve the broader public interest, helping citizens get better access to legal services, he says.

Vogl ticks off the companies that have spun out of Stanford Law in recent years: Lex Machina, Ravel Law , Occam, LawGives , and SIPX. CodeX has drawn legal technology entrepreneurs from outside the school, as well. "These are folks who are working on their own legal tech platforms," he says. "They wanted to benefit from the brain network we have here."

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The blossoming of legal technology entrepreneurship at Stanford is the result of several factors that have converged over the last four years, says Vogl. First is the "crisis in the legal profession," a development with several dimensions. There is the poor economy. "Big Law is under pressure," he explains. "They can't hire as many people as they used to and they can't pay them huge salaries anymore." There is the breakdown of traditional practices and conventions, such as the billable hour. The legal system is finally entering the digital age (courts have made data available online only within the last decade) while technologies like data analytics have progressed enough to process the reams of data generated by the law. Meanwhile, young attorneys struggling in a tough job market are becoming more inventive, taking a fresh approach to practicing law.

At the same time, notes Vogl, there is a crisis in terms of adequate access to justice in this country. Ironically, while there are increasing numbers of unemployed or underemployed attorneys, a significant percentage of the U.S. population doesn't have access to a lawyer.

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And as legal technology becomes a hot market, there are undoubtedly other Stanford Law projects waiting in the wings, with principals chomping at the bit to monetize their ideas. Among them is Securities Litigation Analytics, which has developed a database of securities litigation. The plan, according to director, Jason Hegland, is to provide analytics so attorneys can mine the data for information to help inform legal strategy in cases. It's a similar model to Lex Machina,, he says. But because of the smaller number of securities cases (about 3,000), the idea has a more limited market.

Despite the small market and some technical struggles with building the database, Hegland hopes the project will either be spun out into its own company or acquired by an existing legal technology or perhaps insurance business.

"Startup culture is in the air here," says Lemley, co-founder of Lex Machina and a Stanford Law professor. "Silicon Valley is the most hospitable place in the world in which to start a company."

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Business: Lex Machina grew from a joint Stanford University Law School and Computer Science Department project called the IP Litigation Clearinghouse. Co-founders Mark Lemley, Joshua Walker, and George Gregory mapped every electronically-available patent litigation event and outcome to build a database of litigation. The company sells access to the database to law firms, attorneys, and corporate counsel, and provides free access to the government, students, and researchers.