Law Times

Law Times • February 8, 2016 Page 11 www.lawtimesnews.com Raising capital a challenge for startups, says lawyer MARG. BRUINEMAN For Law Times P articipating in legal in- novation is not for the faint of heart. Jump- ing into cutting-edge projects and startups means em- bracing failure and being able to source out venture capital, say lawyers. Aluvion's Monica Goyal should know. She began her pro- fessional life as an electrical en- gineer working in Silicon Valley. Now, as a lawyer in Toronto, she sees the Canadian legal profes- sion through a filter of potential and has created two companies — My Legal Briefcase, focusing on technology to provide docu- ments, and Aluvion Law. "I saw that there was a gap in terms of what was out there and what people were doing," says Goyal. Innovation is tough, says Goyal. She says that while raising capital is always a challenge for startups, it is particularly tough for legal innovators because it's not commonly understood how legal businesses operate. The upside, says Goyal, is that building innovative legal technol- ogies has a lot of growth potential. She describes Aluvion as offering a unique blend of legal, business, and technology expertise. It aims to reinvent and rethink how legal services are delivered and how to give clients more control over pricing. The firm's seven lawyers, she adds, practise law in the way they want. "One of the visions is to allow people to have a different work- life balance," she says. Lawyer and legal services consultant Mitch Kowalski, based in Toronto, says there's plenty of room yet for technol- ogy to transform how lawyers do their work. For example, he says there's technology by Vancou- ver-based Clio. The company developed a cloud-based case management app that it says delivers all the tools modern law firms need to run a successful practice. The mobile-friendly app allows for time tracking, billing, adminis- tration, and collaboration and integrates with other popular apps. It's been successful over- seas, with an office in Dublin, Ireland, as well as Toronto and Vancouver. Kowalski also points to Kira's machine-learning contract re- view software, which allows law- yers to more quickly analyze and organize information contained in contracts and export data. Kowalski also holds up Cara- vel Law, formerly Cognition LLP, and Conduit Law as examples of lawyers forging a new path through the Canadian legal land- scape. Caravel and Conduit pro- vide in-house counsel to small/ medium companies that Conduit calls embedded lawyers, which it says is cost effective. "My view is new things is competition and new ideas are always good for the market- place," says Kowalski. "Any new ideas . . . that can provide excel- lent service in an efficient man- ner that is cost effective should be welcome." He points to the intellec- tual property litigation tool Lex Machina in the United States. It crawls through litigation data, that can include the number of decisions by a particular judge that lean more toward one side or the other, to help lawyers de- termine the probability of suc- cess of a specific client file. That could well have a significant im- pact on the approach in one area of law and lead to lawyers devel- oping their practices in a differ- ent way. For example, Gowling Laf- leur Henderson LLP has devel- oped Gowlings Practical, a legal project management tool. Mc- Carthy Tétrault LLP is trans- forming its approach by cutting support staff, developing open- plan workplaces and adopting alternative billing approaches. And Toronto-based Thom- son Reuters is riding the crest of moving from textbook to digital through its Practical Law prod- uct launched in September. "It comes down to the way law is practiced now, particularly in the personal injury field," says Helen Hall, practice lead for the personal injury module of Prac- tical Law, a tool launched in the United Kingdom about 25 years ago and introduced in the Unit- ed States 10 years ago. "Everyone's really online, so it's addressing the changing legal landscape." The subscription product of- fers online tools, such as prec- edents and resources, which are constantly updated. It provides an alternative to the textbooks and looseleaf updates in a very fast way. How Practical Law differs from the upstarts is that it's a product that has been used in other countries, so the risks are reduced. And it is being launched by Thomson Reuters, a multi-national mass media and information firm that is publicly traded, so capital investment is- sues differ from those facing individuals who are launching new products. Innovation can take place on the small scale as well. Doing something different from your peers can be a large leap, says David McLean, who has a general solicitor practice in Ottawa. When he launched his practice in 2006, he called it The Mobile Lawyer, and brand- ed himself as a professional who would make house calls to cli- ents. While the concept was not high risk, it served McLean on two fronts: by making him ac- cessible and helping him stand out from the crowd. "I started because, at the time, there was a need for it and I want- ed to differentiate myself from others," says McLean. A decade after having launched his firm, he's been approached by other lawyers wanting to purchase the name, both in Canada and abroad, and the thought of fran- chising has crossed his mind. Part of the challenge for start- ups is overcoming a culture within the legal industry that stigmatizes failures, says Jordan Furlong, consultant and princi- pal with Edge International in Ottawa. Using Silicon Valley as an ex- ample, Furlong points out that innovative startups are frail and have "astonishing" failure rates. "Ten to 15 years ago, I didn't think there was any real push to innovate in any real way in the legal business," says Furlong. "There's a very strong culture of a resistance to change, skepti- cism of innovation, and a very intense fear of failure." But there's room for hope, he says. He points to title insurance, which, just a decade-and-a-half ago prompted heated debate in the profession. It is now ubiqui- tous and occupies a necessary position in the legal marketplace. And despite the hesitation of those in the legal profession and the high risk of failure facing any kind of startup, lawyers are start- ing to respond to the pressure to do things differently. "These innovations, these changes in the market are going to keep coming," says Furlong. "We're probably on the crest of another wave of options." LT FOCUS E V E N T S REGISTRATION FEE $ 595 Balancing client needs, business obligations and government mandates can be challenging. Lexpert's on-demand webinars provide a complete understanding of obstacles within your areas of expertise. Choose from our timely and relevant selection of topics including: - Corporate Governance - Advertising & Marketing Law - Information Privacy & Data Protection - Anti-Bribery & Corruption To learn more contact us at 1-877-298-5868 or visit www.lexpert.ca/cpdcentre Helen Hall says products that help lawyers access online information are critical, and address the changing legal landscape. These innovations, these changes in the market are going to keep coming. Jordan Furlong

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