Welcome back for another week of What’s Next, where we report on the intersection of law and technology. This week, we hear from a Harvard dropout who is funding millions of dollars of litigation projects with the help of algorithms. Plus, a former trustbuster sounds off on the state of antitrust enforcement. And Facebook just can’t catch a break, with a new lawsuit alleging that the company’s “scorched earth” approach to cleaning up its Cambridge Analytica mess is crushing one of its former business partners. Let’s chat: Email me at [email protected] and follow me on Twitter at @a_lancaster3.
The team behind tech-enabled litigation funder Legalist (Photo: Hunter Day)
How Legalist Plans to Spend its $100M Funding
The origin story of tech-driven litigation funder Legalist is not all too different than many disruptive companies that came before it. Like Airbnb, fintech startup Stripe and self-driving car company Cruise, Legalist sprouted out of seed accelerator Y Combinator. In 2016, Eva Shang dropped out of her Harvard University undergraduate program to work with Y Combinator in hopes of developing a legal analytics company that scraped state court records. While there, Y Combinator Partner Jon Levy, formerly of Wilson Sonsini Goodrich & Rosati, tipped off Shang and her business partner Christian Haigh to “a burgeoning new asset class called litigation funding.” Today, Shang is the CEO of the lit funder that uses algorithms to perform due diligence on cases worth no more than $1 million, what Shang calls David v. Goliath cases. The algorithm crunches state and federal court records, digesting data points such as the judge, the court and the type of case to help the company’s underwriting attorneys rapidly perform due diligence. This month, the company raised $100 million in its second round of financing, and this summer retired Judge Richard Posner of the U.S. Court of Appeals for the Seventh Circuit signed on as an advisor. Shang shares just what Legalist plans to do with its newfound funding and her outlook on the evolution of the litigation finance industry.
