While the last few years have brought an abundance of new and innovative legal tech products to market, the fact of the matter is that not every new product will succeed. Inevitably, for whatever reason, some products fail. But one thing for certain is that while some products shut down with a whimper, others go out with a bang.
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-entity model of both a law firm and a technology company. Its founder, Justin Kan, was a Silicon Valley wunderkind who 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 whopping $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-entity firm Clearspire, which opened in 2010 and shut down four years later. But those who 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 starting 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 show 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 crashing down after I reported in 2016 of Bluford’s settlement of a lawsuit charging him with impersonating a lawyer, forging legal documents and fraudulently swindling two clients. Following my report, QuickLegal quickly shut down. Later it appeared to be reincarnated in another similar startup called LawTova. After I wrote about that company, it too shut down. I then wrote about yet another startup that had ties to Bluford and QuickLegal, and which also then shut down.
If you think that was the end of Bluford, think again. In 2020, Bluford published a book in which he claimed to have become an FBI informant assisting in a political corruption investigation into the former mayor of Sacramento, Calif., Kevin Johnson, who was also a former star with the NBA’s Phoenix 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 started in 2014 at the University of Toronto as a student-built entrant in a cognitive-computing competition staged by IBM to develop applications for its Watson computer. It quickly gained momentum and international attention, drawing major investors, including Denton’s NextLaw Labs, and its founders were invited to participate in the prestigious Y-Combinator startup 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 potential future.
But the outlook for ROSS changed almost overnight when it was sued by Thomson Reuters in 2020 on allegations that it surreptitiously stole content from Westlaw to build its own competing legal research product. While ROSS vehemently denied the allegations, the lawsuit crippled its ability to raise new financing or explore potential acquisition opportunities. In December 2020, it announced that it was shutting down. Yet even though 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 products 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 product got off to a rocky start, with major performance issues, and it had difficulty gaining traction in what was fast becoming a crowded market. It later went back to the drawing board and rebuilt the product 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 started. 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 analytics company Gavelytics shut down in 2022, it was a shock to almost everybody but the founder. The company had been seen as one of the leaders in the fast-growing field of litigation analytics, and since its founding in California in 2017, it had significantly expanded the scope of its product 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, however, a somewhat happy ending to the story of Gavelytics. Six months after it shut down, another litigation analytics startup, Pre/Dicta, acquired the Gavelytics platform and its accumulated court data, and brought on Merrill as a strategic advisor.
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Bob Ambrogi is a lawyer and journalist who 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, hosts the podcast about legal innovation, LawNext, and hosts the weekly legal tech journalists’ roundtable, Legaltech Week. He is also cofounder of the LawNext Legal Technology Directory.
