Judicata isn’t trying to knock out legal research giants Lexis and Westlaw—at least not yet. But the team of lawyers and engineers behind the San Francisco start-up certainly sees room to improve on their services.

Since early 2012, Judicata has been building technology to bring Google-like searchability and a user-friendly interface to the tedious—but essential—task of legal research.

The venture-backed company is part of a constellation of young businesses which are trying to modernize the practice of law with new ways of collecting, organizing, analyzing and displaying legal information.

The emerging crop of companies is driven in part by client demands for cost control and for data-based decisionmaking—and the hope of breaking into the $20 billion legal research market dominated by Westlaw and Lexis Nexis.

The new wave of startups share a broad interest in making legal information more open and transparent. Beyond that, the companies tend to break down into two categories. Some, including Judicata, are primarily trying to bring smarter technology and intuitive interfaces to traditional legal research, while others, like Stanford University spin-off Lex Machina, are working to amass large collections of data on filings and dispositions that can be mined for patterns and actionable information.

“Conditions in the legal information and technology markets are perfect for start-up market disruptors that are not held back by old coding languages, expensive pricing structures and large overheads,” said Hugh Logue, an analyst who covers legal research and publishing at research and advisory firm Outsell Inc.

“At the same time,” Logue added, “this is a complex market and success requires substantial investment, experience, and years of development.”

Judicata’s founders—including CEO Itai Gurari, a Jones Day lawyer turned software engineer—think they have the right formula.

For the last year, a team of engineers with experience at Google and Adapt.Tv have been working with lawyers to identify and map legal data. The approach mirrors what companies like Amazon or Zappos do with their inventory so that customers searching for a book or pair of boots are directed only to relevant products. “If you’re paying a lawyer, you want them to lawyer and not spend time fact gathering,” said Judicata cofounder Blake Masters, who graduated last year from Stanford Law School. “And if you’re the lawyer, you don’t want to spend time fact gathering either.”

The ultimate goal is to enable attorneys to “search in a really precise, targeted way,” he said. “We basically prepopulate every search out there and give the lawyer the result for that.” Judicata plans to roll out a beta-test product on California employment law to attorneys in the Bay Area in December. The fledgling company has already attracted $8 million in funding from some notable investors in the Valley. Among its backers are PayPal co-founder Peter Thiel; Box cofounders Aaron Levie and Dylan Smith; and Keith Rabois, known for his early-stage investments at PayPal, LinkedIn and Square.

Gurari, a former engineer for Google Scholar, said the company plans to expand its coverage to other areas of law and eventually hopes to build tools that offer actionable insights and help practitioners craft arguments. He calls Judicata a “supplement” to the offerings of Lexis and Westlaw—but also has a subtle dig for the market leaders.

“We’re not going to replace them anytime soon, maybe never,” he said. “But at the same time, we’re recreating legal research in the 21st century rather than relying on something that was done 140 years ago.”

ESTABLISHED PLAYERS

Westlaw can trace its roots in legal research back to the mid-1800s; Lexis Nexis has been around since the 1970s. Bloomberg Law made its play in 2010, offering a web-based product that’s modeled after the company’s flagship data-and-research terminals relied on by finance professionals. These titans offer comprehensive content as well as a suite of research and productivity tools.

But while the established players continually update their offerings and come up with new ways to leverage vast collections of information, they hardly move at Internet speed. As David Tisch, founder of the seed-stage venture firm BoxGroup, puts it: “The legal research space is stale. I was a lawyer about eight years ago and the tools in the space are basically the same.”

Law firm librarians and researchers say lawyers are interested in exploring the new products, particularly if they seem to offer a competitive edge. However, for now it’s unclear if the newcomers meet the need for a more efficient, less expensive research product—or merely fill a niche.

John DiGilio, national manager of research services at Reed Smith, said five years after the economic collapse, the legal industry is still feeling the pressure to economize and considering “how to get more done with less people or more efficiently.” Clients remain reluctant to subsidize law firms’ research budgets, and may balk at pursuing cases without evidence, in the form of hard data, that they’re likely to win.

Camille Reynolds, director of risk management and information services at Fenwick & West, said, “Clients overall are pushing back on cost, not necessarily that they want lower cost, but that they want predictability and the way legal research is rolled out is often something that clients do push back on.”

Miriam Rivera, cofounder of Ulu Ventures and former deputy general counsel at Google, agrees. She says the lack of understanding about “whether your expenses are going to have an impact on achieving particular goals is not a sustainable practice” for in-house attorneys.

Ulu Ventures and several other investors have poured $10 million into Lex Machina, a platform that takes a Big Data approach to IP litigation. The company, which originated as a public interest project at Stanford University in 2006, has aggregated vast amounts of information publicly available through the federal court’s PACER system into a mega-database. The product is pitched to in-house lawyers as a way to research outside counsel and analyze the cost and likelihood of success on particular issues. For law firms, the sell is information that can be used to pitch new clients and strategize about cases. When Rivera joined the board of the Menlo Park–based company, she said, “If I was at Google today, I would be using the type of data Lex Machina can deliver to select and manage outside counsel, and I would want all my outside law firms to be using it.”

Lex Machina’s CEO, Josh Becker, said its services have spread “organically” and the company recently added a sales representative in New York. At the American Intellectual Property Law Association’s annual meeting last month, the group’s president elect announced a partnership with Lex Machina to a crowd of about 2,000 IP attorneys, according to Becker.

ON THE CUTTING-EDGE

Marty Kilmer, vice president of product platforms at LexisNexis, said his company is not ignoring the push for more analytical tools and capabilities. Those services, he said, are “front and center of virtually all of our conversations with influential law firms and legal departments that are on the cutting edge of legal technology.”

Westlaw representatives were not immediately available to comment.

Reed Smith’s Digilio said his firm has enterprise agreements with both Lexis Nexis and WestLaw, is “dabbling” in Bloomberg Law and has a few licenses for Lex Machina. He said his attorneys have been asking about the specialized, analytical products offered by the younger vendors. “Established vendors are doing what they’ve done for so long, they provide all of this information and there’s a place for that,” he said. “But there’s also time and place for something that’s far more precise, far more contextual.”

Nicholas Wagoner, an Austin employment lawyer and coauthor of “Lawyering in the Shadow of Data,” said that for now, a more quantitative approach to lawyering is “very much at the fringe,” but expects it will “creep up into the mainstream of the profession” as younger lawyers adopt the relevant tools.

Rivera of Ulu Ventures agreed that a generational shift is driving innovation. “There’s a big wave of young people saying we don’t want to practice law the way that it has been practiced,” she said.

This shift is not only driving the demand for professional products that are user friendly and intuitive, like those attorneys use in the personal lives, but it may also be inspiring a push for greater accessibility.

“There’s a feeling that access to the law shouldn’t be behind a paywall,” said Jacob Heller, a former litigation associate at Ropes & Gray and founder of Casetext, a platform that is crowdsourcing case annotation. Unlike the research giants that have hundreds of attorneys and legal experts on staff to provide editorial content on cases, Casetext offers a community-based approach, similar to Wikipedia. Since its launch from seed accelerator Y-Combinator in 2013, the company has raised $1.5 million, including funding from Ashton Kutcher.

Nathaniel Cooper, a litigation associate at Cooley, said he starts his research with Ravel Law, a Cooley-backed search and visualization platform built on information that’s publicly available. “If I’m trying to do it quickly or cheaply, I’ll try to go to [free] services to get started,” he said.

Ravel Law’s CEO and cofounder, Daniel Lewis, a Stanford Law grad, said, “The current research tools still require a lot of intelligence behind the wheel, a lot of thinking as you craft and refine your searches.” Ravel Law’s beta product offers a single search box and allows users to use natural language as they would in Google, he said.

Fenwick’s Reynolds said that the proliferation of legal research tools has led to “a bit of tool fatigue in the market overall.” Moreover, cost cutting isn’t always achieved through the adoption of a cheaper research product, she added. “Sometimes,” she said, “the soft cost of switching to a cheaper tool ends up costing more in the long run in terms of behavior change required and training.” Additionally, lawyers can’t afford to miss key cases. “When you’re in the midst of a very large deal, you need a service that has 100 percent of the content and provides 100 percent assurance that there aren’t gaps in the search,” said Anne Stemlar, director of research and knowledge services at Goodwin Procter.

Ron Dolin, an investor in Ravel Law who teaches a course at Stanford on legal technology and informatics, predicts radical change is still to come. “I don’t think it’s going to be five years, but certainly less than 10,” he said. “As soon as any of these new systems have a full database of full coverage behind them.”

Contact the reporter at npierrepont@alm.com.