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The legal tech space has become explosive. Investors are pouring millions into legal innovation as founders excitedly plan to disrupt the legal space. Some attorneys are thrilled about the thought of new technology to better their practice while others are skeptical about the need for disruption — or even using the term disruption.
In any case, legal startups are big and getting bigger.
How Big is the Legal Startup Market?
According to AngelList, there are roughly 350 companies in the U.S. tagged in legal. If you break those down to legal startups, there are 101 listed. Josh Kubicki reported that legal startup funding is at an estimated $77 million year to date with the prediction that it will be much higher than the $458 million invested in 2013.
How Many Will Succeed?
David Perla, legal tech entrepreneur and investor, explains that, realistically, “a significant majority will fail.” When they do, people will say it is “evidence that the legal market is stuck in the dark ages, that it’s not ripe for disruption, that there’s no innovative … but the vast majority of startups in every industry do fail.” Watch the rest of this fascinating interview with Perla by Lee Pacchia:
Before we look at the startups moving to change the legal space, let’s talk about the legal startup recipe.
What is a Startup?
Paul Graham says, “A startup is a business designed to scale dramatically.” His essay “Startup = Growth” explains that a startup does not have to have venture funding or an exit to be considered a startup. The only essential thing is growth.
Eric Ries explains, “A startup is a human institution designed to deliver a new product or service under conditions of extreme uncertainty.”
While Steve Blank, Silicon Valley entrepreneur and Lecturer of Entrepreneurship at Stanford and Berkley among other institutions, describes a startup as such: “A startup is an organization formed to search for a repeatable and scalable business model.”
Next: the 2014 list of legal startups.