This post is part of our Future of Law series which interviews the leading founders and executives who are on the front lines of the industry to get a better understanding of what problems the industry is facing, what trends are taking place, and what the future looks like.
The following is an interview we recently had with Kevin L. Miller, CEO of LegalSifter.
1. What’s the history of LegalSifter? Where and how did you begin?
KM: LegalSifter was founded in 2013 by a pair of Carnegie Mellon graduates with expertise in artificial intelligence, machine learning, and natural language processing. Their original concept product, the Freelancer Scorecard, read software development contracts for independent contractors and gave them advice. The idea was to protect freelance software developers who often sign contracts without the help of an attorney, sometimes to their detriment. 4,000 users tried the product in days, but the founders were not ready with a sustainable business model to support it.
I joined the team as a CEO and an investor in late September 2015. We made our mission to bring affordable legal services to the world by empowering people with artificial intelligence. We launched our first formal products – ContractSifter and ContractSifter Service – in April 2016. We raised some capital and built out the team, all with a strategy of returning to the original Freelancer Scorecard concept – an A.I. product that read contracts and gave advice. We finally launched that product with LegalSifter (the product) in July 2017, and our world has begun to change dramatically as the market is realizing what we have built.
2. What specific problem does LegalSifter solve? How do you solve it?
KM: LegalSifter (the product) addresses a pain that is common to every contract negotiation. At least one party in every negotiation must review someone else’s contract, an unfamiliar document full of complex legal language. The recipient has three options: (1) ask colleagues or external counsel for help (expensive & slow), (2) review the document alone (challenging), or (3) skip the review, sign the document, and hope for the best (risky). All of these options have significant challenges.
Users of LegalSifter upload the first draft of a contract in DOC, DOCX or PDF format. Our Sifters – software trained to read text, look for a specific concept, and learn from experience – review the document and identify important concepts that demand attention or are missing entirely. The Sifters trigger in-context advice tailored to the customer’s business and position in the negotiation. Users may export the advice for redlining. The experience can dramatically reduce the time it takes to review and redline a contract.
We sell LegalSifter to organizations that are looking to improve the speed of their negotiations, reduce the cost of legal review, and lower risk. We also sell LegalSifter to law firms looking to enhance their margins and improve the turnaround times of contract reviews for their clients.
LegalSifter also partners with law firms who wish to co-brand our product and insert their best practice advice alongside our Sifters. Those law firms are reselling LegalSifter to clients that would otherwise not send a contract review to them because of speed or cost. LegalSifter offers a new way for law firms to offer their services in a manner that aligns with their client’s assessment of value and the speed of their business. The clients are happy because they are able to access the best practice advice from their trusted advisors 24x7x365. Law firms are happy because they make money while they sleep for often the first time in their careers.
3. What’s the future of law?
Prediction #1: Lawyers will use artificial intelligence to offer self-service and partial-service products to their clients. Lawyers think, read, and write for a living. Historically, they have not had technology that mimics what they do, so they have not scaled. They offer full-service products that are too expensive and too slow for much of the world’s transactions. Artificial intelligence has finally arrived in formats that will change that. Entrepreneurial attorneys will figure out how to combine their service with these new tools, inventing new ways to serve their customers in ways that makes legal services much more affordable than it is today. There are 7.5B people on earth and 80% live on less than $10 a day. Most people cannot afford a lawyer, but they all need one. In the future technology will allow lawyers to scale and deliver their knowledge to the world.
Prediction #2: Artificial Intelligence will help create far more jobs in the legal profession than it will destroy. The unmet demand for legal services in the business-to-business and business-to-consumer space around the world is huge. Today’s global market of ~$750B should be 3x that amount. Once lawyers figure out that artificial intelligence is the way to scale – see prediction #1 – they will start to serve more clients than they ever thought possible. While they will enjoy tremendous efficiencies, lawyers will still need people to hold client’s hands throughout the experience. As demand comes online, so will new jobs to meet that demand. They will look and feel different than the long-term full-service firm models, and in general, they will be additive to the overall legal service job market.
Prediction #3: Artificial Intelligence will not spell the end of the hourly billing model. The model works for lots of types of bespoke work. It does not align with risk and value for lots of other types of legal services, which is why so many of us complain about it. With new technology, new products will arrive with new value-based pricing schemes. Legal service providers will figure out how to offer both in harmony to their clients.
4. What are the top 3 technology trends you’re seeing in the legal industry?
Trend #1: The industry is aware and interested in Artificial Intelligence. I attended the International Legal Technology Association’s ILTACON 2017 conference last August. In one of the opening sessions, a moderator asked the attendees if they had some sort of A.I. strategy in their firm or organization. Nearly all of the hands of the ~1,000 people in attendance went up in response.
Trend #2: The industry has not yet implemented Artificial Intelligence. The moderator asked those attendees at ILTACON 2017 if they had successfully implemented their A.I. strategy. All the hands went down. The market is ready. The products are just now coming online. Over the next 1-4 years, we predict that everyone in that room will have successfully implemented some sort of artificial intelligence solution.
Trend #3: Lawyers are not averse to technology. I entered the legal technology space two years ago. My friends told me that lawyers were slow to adopt technology, and that I was nuts. Lawyers are averse to technology that does not help them do their jobs better. Because many of them think, read, and write for a living, and because much of the technology presented to them historically does not do that, they have not adopted much of it en masse. When they see products that truly get into the heart of their workflow in a positive way, they will adopt them just like every other function in the world.
5. Why is the legal industry ripe for disruption?
KM: Because the demand for legal services is largely unmet, the world is waking up to the potential of artificial intelligence, and because entrepreneurial attorneys see the possibilities. Combine that with an unprecedented, accelerating amount of investment into promising legal tech companies, and you have the right ingredients for an explosion of new legal products that change the nature of the industry. The good news is that everyone will win – attorneys, clients, and suppliers.
About Kevin L. Miller
Kevin joined LegalSifter in September 2015 as its CEO, Board Member, and an investor after nearly nine (9) years at Industrial Scientific Corporation (ISC), a global safety company committed to ending death on the job by the end of the century. Kevin completed his tenure as Chief Operating Officer. Prior to ISC, he helped launch an online version of Argosy University, with regionally-accredited bachelors’, masters’, and doctoral programs in business, education, and psychology. Before Argosy, he spent nearly six (6) years in a variety of roles at FreeMarkets and Ariba, its acquirer, in the global sourcing and procurement software space. Kevin holds a Juris Doctor degree from the University of Cincinnati College of Law, a Master of Business Administration degree from the Mason School of Business at the College of William & Mary, and a Bachelor of Arts degree in History from Davidson College. Kevin is also a licensed, albeit inactive, attorney in the state of Ohio.