L-R Jake Heller, Founder and CEO and Laura Safdie, COO and General Counsel.
Artificial intelligence (AI) is quickly becoming the posterchild of legal technology. At times this notion can seem more hyperbolic than factual, ingrained in the psyche via spate after spate of new technology, the stories around it and the vociferous nature of many early adopters. However, the closing of a funding round announced today, coupled with a series of recent Big Law moves involving AI technology, are lending an air of substance to the hype that is AI.
The company receiving the most recent round of investments is Casetext. A legal research platform, the company leverages AI as part of its premium service, CARA (Case Analysis Research Assistant), to find cases that are relevant to briefs. Since its founding in 2013, Casetext has gathered a considerable array of Am Law 100 firms, including DLA Piper, Fenwick & West, Ogletree Deakins and Greenberg Traurig, the company noted in a release.
Closing at $12 million, the company’s series B funding round marks one of the bigger investments in legal technology. Leading the investment round was Canvas Ventures, whose partners have also invested in Evernote and Siri. Other investors included Red Sea Ventures, Union Square Ventures, and 8VC.
Casetext worked with law firm partners both preceding and following the investment round, Casetext CEO and co-founder Jake Heller told Legaltech News, but he noted that investors “bought into” his company “as soon as they saw that we could get Quinn Emmanuel attorneys … DLA Piper attorneys to pay tens of thousands of dollars” for its CARA product. “I think they immediately knew that this was the kind of technology that might a big wave in this field.”
Indeed, among law firms, AI-enabled technology does seem to be gaining traction. Major firms particularly appear to be creating positions and teams that involve dealing with AI technology adoption, such as Jackson Lewis’ recently created chief digital officer position and Littler Mendelson’s Big Data Initiative, led by global director of data analytics Zev Eigen. Further, Dentons’ technology incubator Nextlaw Labs partnered with software provider RAVN Systems in developing a tool that helps attorneys navigate Brexit. RAVN is increasingly popular among law firms as well, with users including DLA Piper and global law firm Linklaters.
With legal research specifically, ROSS Intelligence, a tool built upon IBM’s Watson for bankruptcy research, has also been picked up by a number of firms of varying sizes, such as Baker & Hostetler, Womble Carlyle Sandridge & Rice, Salazar Jackson, and von Briesen & Roper.
“I think the demand on lawyers has gone up,” Casetext’s Heller said. “At the same time, the clients are starting to say, ‘I don’t want to pay for a legal research tool. And I don’t want to pay for the time for a first year associates research.’ There’s this economic pressure to do more with less.”
AI’s impact on traditional billing models may be a driving factor as well. As found in a January report by the McKinsey Global Institute, immediately adopting “all new legal technology” would lead “an estimated 13 percent decline in lawyers’ hours,” reported the New York Times.
These pressures, in Heller’s view, may be pushing firms to create more knowledge management positions, the professionals behind which are typically tasked with adopting technology and overseeing its implementation and deployment.
Among those undertaking this task with Casetext for a major law firm is Patrick DiDomenico, chief knowledge officer at Ogletree Deakins. He told LTN that while the firm is “not seeking out AI for the sake of AI,” it evaluates opportunities with such technology.
“If a technology or tool is useful and will help us in our mission, we will consider it,” DiDomenico noted. He didn’t comment on ways beyond legal research that his firm is currently using AI, nor the firm’s first adoption of such technology, other than Casetext.
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Contact Ian Lopez at [email protected]. On Twitter: @IanMichaelLopez
