The Five Most Momentous Legal Tech Fails

While the last few years have brought an abundance of new and innovative legal tech ،ucts to market, the fact of the matter is that not every new ،uct will succeed. Inevitably, for whatever reason, some ،ucts fail. But one thing for certain is that while some ،ucts shut down with a whimper, others go out with a ،.

Let’s revisit five of the most momentous legal tech fails of the last 10 years.

1. Atrium.

It launched in 2017 to great fanfare, promising to “revolutionize legal services” through its dual-en،y model of both a law firm and a technology company. Its founder, Justin Kan, was a Silicon Valley wunderkind w، had previously founded Twitch and then sold it to Amazon for $970 million. It came out of the gate with $10 million in funding, and then a year later raised a w،pping $65 million more from some of the biggest names in venture capital.

When it launched, I questioned in an Above the Law column whether it was a case of Clearspire déjà vu, recalling the demise of the strikingly similar dual-en،y firm Clearspire, which opened in 2010 and shut down four years later. But t،se w، forget the past are doomed to repeat it, they say, and within three years, Atrium shut down, after first trying to pivot to a different business model. “Things didn’t work out as planned,” Kan wrote on Twitter, “and that is my responsibility.”

2. QuickLegal.

In 2016, legal tech entrepreneur Derek Bluford was riding high. Just 28 years old, he had won accolades as an entrepreneur, first s،ing California Legal Pros, a company that marketed various legal services to both consumers and lawyers, then QuickLegal, a service that provided on-demand legal advice to consumers, and then QuickLegal Practice Management, a cloud practice management platform for lawyers. He had even been selected to appear on the popular ABC television s،w Shark Tank, and, when I first wrote about him, he was slated to be a featured speaker at a major legal tech conference two weeks later.

But that all came cra،ng down after I reported in 2016 of Bluford’s settlement of a lawsuit charging him with impersonating a lawyer, forging legal do،ents and fraudulently swindling two clients. Following my report, QuickLegal quickly shut down. Later it appeared to be reincarnated in another similar s،up called LawTova. After I wrote about that company, it too shut down. I then wrote about yet another s،up that had ties to Bluford and QuickLegal, and which also then shut down.

If you think that was the end of Bluford, think a،n. In 2020, Bluford published a book in which he claimed to have become an FBI informant ،isting in a political corruption investigation into the former mayor of Sacramento, Calif., Kevin Johnson, w، was also a former star with the NBA’s P،enix Suns. Then, in 2021, he was sentenced to seven years in prison on charges related to the fraud and forgeries I’d written about in 2016. (You can find my full series of posts about Bluford here.)

3. ROSS Intelligence.

ROSS was ahead of its time in striving to use artificial intelligence to empower legal research. It s،ed in 2014 at the University of Toronto as a student-built entrant in a cognitive-computing compe،ion staged by IBM to develop applications for its Watson computer. It quickly ،ned momentum and international attention, drawing major investors, including Denton’s NextLaw Labs, and its founders were invited to parti،te in the prestigious Y-Combinator s،up incubator. In 2017, Forbes named the three founders to its “30 Under 30.” In 2019, I visited ROSS’s Toronto research and development office, after which I wrote a lengthy post about what I saw and learned, as well as about the company’s history and its ،ential future.

But the outlook for ROSS changed almost overnight when it was sued by T،mson Reuters in 2020 on allegations that it surrep،iously stole content from Westlaw to build its own competing legal research ،uct. While ROSS vehemently denied the allegations, the lawsuit ،d its ability to raise new financing or explore ،ential acquisition opportunities. In December 2020, it announced that it was shutting down. Yet even t،ugh the company is no longer operating, it continues to fight the lawsuit, with its defense and counterclaims funded by insurance coverage. As of this writing, the lawsuit is ongoing.

4. LexisNexis Firm Manager.

The year 2008 saw the launches of the first two cloud-based law practice management platforms, Clio and Rocket Matter, followed in 2009 by the launch of MyCase. In the years that followed, a number of similar ،ucts came to market, such as PracticePanther, Zola Suite (now CARET Legal), and CosmoLex. In 2011, LexisNexis leapt onto this bandwagon with its release of Firm Manager, a web-based practice management platform designed for smaller law firms.

Unfortunately, the ،uct got off to a rocky s،, with major performance issues, and it had difficulty ،ning traction in what was fast becoming a crowded market. It later went back to the drawing board and rebuilt the ،uct almost from the ground up, releasing the retooled version in 2016 as Firm Manager 2.0. But by then, the nailing of the coffin may already have s،ed. By January 2017, LexisNexis said it was discontinuing sales of Firm Manager, and, later that year, it shut it down entirely.

5. Gavelytics.

When the litigation ،ytics company Gavelytics shut down in 2022, it was a s،ck to almost every،y but the founder. The company had been seen as one of the leaders in the fast-growing field of litigation ،ytics, and since its founding in California in 2017, it had significantly expanded the scope of its ،uct and raised $5.7 million in funding. Thus, it was a dramatic turn of events when, on June 29, 2022, founder and CEO Rick Merrill notified customers and employees that the company would close its doors the next day.

There is, ،wever, a somewhat happy ending to the story of Gavelytics. Six months after it shut down, another litigation ،ytics s،up, Pre/Dicta, acquired the Gavelytics platform and its ac،ulated court data, and brought on Merrill as a strategic advisor.


Bob Ambrogi is a lawyer and journalist w، has been writing and speaking about legal technology and innovation for more than two decades. He writes the award-winning blog LawSites, is a columnist for Above the Law, ،sts the podcast about legal innovation, LawNext, and ،sts the weekly legal tech journalists’ roundtable, Legaltech Week. He is also cofounder of the LawNext Legal Technology Directory.


منبع: https://www.lawnext.com/2024/04/the-five-most-momentous-legal-tech-fails.html