Deloitte's Legal Tech Incubator Pushes Big 4 Deeper Into Law Firm Territory
Currently, law firms and the Big Four compete for clients. But with PwC and now Deloitte launching legal tech incubators, that competition could soon extend to attracting startups.
December 05, 2019 at 06:40 PM
3 minute read
Add Deloitte to the list of entities interested in steering promising legal tech startups into developing must-have tech tools.
Yesterday, the Big Four giant announced the launch of Legal Ventures, a program giving early-stage legal tech companies access to Deloitte's consulting, technology, legal and investment expertise. In return, Deloitte will leverage the startups' products and services.
Originally, law firms launched legal tech incubators to keep up with ALSP's legal talent and tech advantages. Over the course of five years, a host of such incubators including Dentons' NextLaw Labs, Cyril Amarchand Mangaldas's Prarambh, Clifford Chance's Create+65 and Allen & Overy's Fuse have come into existence. Now, it appears, the Big Four is encroaching on that territory.
Earlier this year, PwC became the first of the Big Four to join the legal tech incubator space, when it announced it was accepting applicants for Scale | LawTech, a 10-week program tasked with providing legal tech startups with pitch opportunities and individual coaching and business support.
Deloitte, meanwhile, prefers its program not be called an incubator. "This is not another incubator (the market is saturated with those). Deloitte Legal Ventures is a specific program to better shape and test the proof of concept process," a Deloitte spokesperson wrote in an email.
Saturation aside, the networking opportunities for legal tech startups are expanding, and companies are not wasting the chance to leverage both Big Law and the Big Four's varying expertise and networks.
Notably, contract automation tool Avvoka was named one of 14 companies in Deloitte's Legal Ventures program. Earlier this year in March, Avvoka joined Allen & Overy's Fuse incubator. (Avvoka didn't respond to requests for comment by press time).
What's more, the "app store for legal tech" Reynen Court, which obtained early investment from Clifford Chance and Latham & Watkins and counts those firms' chief information officers as non-executive directors, is also a member of Deloitte's new program.
For Deloitte's part, innovation and Legal Ventures lead Laura Bygrave said they aren't competing with any incubators. Instead, she noted Legal Ventures differs by intending to use their startups' products and services and offering them a long-term relationship.
To be sure, Allen & Overy's Fuse allows the firm to use the products that come out of its incubator, and, like Legal Ventures, does not seek to exclusivity.
Deloitte's program focuses on companies proving their product's proof-of-concept process through metrics. Each company's products, services, business models and strategies are evaluated through a "stress-test," that measures its desirability, feasibility and viability, Bygrave explained.
"The reason we would want to do that is because we want to help these companies scale up, given that the legal market is quite saturated," she said.
Indeed, the legal tech market is full of similar products, leading some observers to expect a wave of consolidations. Still, Deloitte does have some firsthand experience developing legal tech. Earlier this year, it released a Freedom of Information Act workflow tool, the first product created through its alliance with e-discovery provider Relativity.
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