alt.legal: Silicon Valley-Like Accelerator + Elite Biglaw Firm = MDR LAB

Imagine Y Combinator of the tech world fame, but inside a law firm with open access to the partners, associates, technology infrastructure, and staff.

Nick West

On this 4th of July week, we Americans celebrate our independence from the UK.

But, as lawyers who love innovation, we should also take a moment to admire our innovative legal brethren across the pond — who seeded our common law, after all. While we come from the same legal roots, today the UK legal market is fundamentally different from ours . . . in many ways, better. Why?

Well, since the passage of the 2007 Legal Services Act, which allows non-attorney ownership of law firms (also known as an ABS structure) there has been an explosion in innovative business models combining great lawyers, business professionals, and technologists (think Riverview Law). UK Biglaw also seems to get that times are changing. A&O, for example, has actively reimagined the “obsolete” Biglaw model, and embraced the disaggregated future through launches of new and innovative businesses filling legal and quasi-legal niches! (I still want my interview with Biglaw hero, David Morley, if he’s reading this.)

Which brings us to today’s thought experiment: picture a red-hot UK firm running a mature, accelerator-like program for legal startups inside their walls.  Specifically, imagine Y Combinator of the tech world fame, but inside a law firm with open access to the partners, associates, technology infrastructure, and staff — who are all encouraged (from the top down) to help these legal startups solve THEIR problems. Now imagine the idea of this program is not just to accelerate legal technology, but to give their firm a meaningful (and sustainable) edge in their practice. Imagine being a Biglaw partner at such a firm, and being able to look your clients (or potential clients) in the eye to tell them which bleeding-edge technologies are game changers for them, and which are vapor-ware. You can do that honestly, because your firm helped design and test them. Of course, you’d also have to imagine a ridiculous world where recruiting new lawyers is about more than the billable hours minimum — it’s about offering  young lawyers the opportunity want to have one foot placed firmly in the future of the legal industry.

Welcome back.  You have just imagined MDR LAB.  It’s real, and it is run out of UK powerhouse firm Mishcon de Reya (a firm with over 500 lawyers which has been on a rocket ship of growth).  Last week, I sat down over coffee (should have had tea, damn!) with Nick West. Nick runs the program and also sits as the firm’s CTO (post an illustrious career running Axiom UK).  As CTO, if he believes in your tech, he can act on implementing it.

This is my column, so I get to have an opinion . . . I freaking love this idea! Now listen, I’m glad I called it quits after the half-decade mark in Biglaw, but if my firm had a program like MDR LAB, I might just still be there. It would be like combining all the fun of startup-life at WeWork with the sweet sweet paychecks of Biglaw. Also, you just might come to believe that the practice of law was a modern profession, which needs to do weird things like push the technological envelope forward every day to stay competitive — like every other business in the global economy.  Refreshing.

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Enjoy the interview!

Joe Borstein: Thanks for the time Nick.  Give me a bit a background on yourself.

Nick West: I trained and qualified as an antitrust lawyer at Linklaters, but knew quickly that practising law wasn’t for me. After a detour to McKinsey for a few years, I came back into the legal industry working with a range of legal technology at LexisNexis, where I worked from 2006-2013, eventually running the legal product suite in the UK. In 2013, I left to run Axiom in the UK and then joined Mishcon de Reya in 2016 as Chief Strategy Officer, with the mandate to rethink the business and practice of law, with a focus on new and emerging technologies that have the potential impact to revolutionise the legal market. Since 2018, I’ve been Chief Technology Officer as well with ownership over the whole stack of technologies.

JB: Thanks, but this is alt.legal, so please tell me about the MDR LAB?

NW:  MDR LAB is our legal tech incubator. We aim to find interesting new technologies that are changing the practice of law, bring them into our business for 10 weeks, wrap a team of lawyers around them, and help them develop their product. By the end of the programme, hopefully, we’ve helped them create a product that we’d want to use and that others in the market would too.

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Mechanically, each year we ask for applications from the legal startup world. Ultimately, we’re aiming to select 4-6 companies to come in and spend 10 weeks in the firm. This year, for example, we had 136 applicants, we invited 16 to an in-person Pitch Day at our office, and we chose 5 for the MDR LAB programme itself. Who wins? For me, it’s the startups which have a laser-like clarity about what they do; about what problem they are trying to solve. So many startups talk about technology first — those are less interesting for me, to be honest. I need to start from a problem statement — if I recognise the problem, then I’m interested in how the startup might solve the problem and things tend to progress well from there.

On the programme, we agree with each startup on a clear goal for the 10 weeks and then we wrap a team of lawyers, technologists, legal engineers, members of our strategy and data science teams, members of our finance and BD teams, and other relevant people around them, and they all work together collaboratively against those goals. At the end of the programme, we have a Demo Day, attended by ~150 internal and external technology enthusiasts!

The startups come from all over the world — we’ve now had LegalTech companies from the UK, US, Germany, Israel, and India in the 2 cohorts to date, but we’ve had applications from over 20 countries. In fact, there are very few pre-requisites. First, they must be technologies that are relevant to the types of law that we practise — the LAB is not purely altruistic; whilst we want to help the emerging LegalTech sector, we want to transform our own practice, so they’ve got to be technologies that Mishcon de Reya could use. Second, they must be willing to spend 10 weeks in London because it’s not a remote programme; it’s demanding and hands-on and we’re trying to achieve a lot of actual product development in 10 weeks. And third, they must agree to an equity option ahead of the start of the programme — at a mutually agreed-upon valuation.

JB:  Sounds like a hell of an opportunity for them.  We all know how hard it is to get that Biglaw access.  Give us one exciting example of a company that has come through MDR LAB.

NW: Last year, we had a company called Orbital Witness on the programme. It was barely 6 months old and joined the LAB with nothing more than an idea. The business was founded by 3 men from the space and satellite industry who had a belief that they could use satellite imagery to help with real estate disputes. Over the 10 weeks, we helped them design the actual product through a series of design sprints. First, they realised that whilst there could be value in the satellite imagery, the disputes angle probably wasn’t scalable — yes, our real estate litigation lawyers do indeed work on boundary dispute cases, but only occasionally. Instead, through a set of interviews and shadowing of our lawyers, they realised that the scalable use case would be for the diligence tasks at the outset of almost every real estate matter — establishing title. Over the course of the 10 weeks, the founders built up a picture of what real estate lawyers do day in and day out and how a map-based application allowing the users to drill down into different layers of data for a given title/asset, coupled with the satellite imagery, would provide real value. By the end of the programme, they had a fully fleshed-out product concept. Over the next 6 months, they raised capital and started to build their product and since March 2018, we’ve been piloting their application in our real estate department, with real success.

JB:  How did you convince the firm to take the innovation plunge, which surely consumes time, effort, and billable hours?

NW:  I always get asked that question! It actually was not that difficult. Kevin Gold, our Managing Partner, is a true visionary. He understands that as technology is changing the world, so it will inevitably change legal. And when I got here, he asked me to spend 6 months just immersing myself in the firm. When I finally got to articulate some ideas to him, and suggested the idea of an incubator, which is really a proven concept borrowed from many other industries, he saw the value. I wrote a short paper to the board, and a week later it was done.

MDR LAB is only a component of what we do, however. We see the world in 3 technology horizons.

  • Horizon 1 is the set of existing legal technologies. Think Relativity, iManage, etc. We need to make good choices between these mature providers, ensure we’re getting value from what we’ve paying for and make sure that we’ve got good adoption.
  • Horizon 2 is the set of LegalTech startups — the companies you talk and write about. These are companies that are trying to look at current ways of working and making them better. They are technologies that could be ready for a firm like ours to use in 6-24 months. They are mature enough for us to understand whether they address a pain point that we have, but still young enough that we could actually have a bearing on their development. And so they are ideal for MDR LAB.
  • Finally, Horizon 3 represents the technologies that MAY change the world tomorrow. Think Smart Contracts. This set could be transformational for legal or could be hot air. I don’t think we should wait to find out, but instead should be involved in a number of the projects related to them — typically, we might partner with universities to explore these technologies.

To support all this, we have a great group of tech enthusiasts around the firm — lawyers, legal engineers, strategy managers, data scientists — who all work together in different combinations. Critical to our way of thinking is to include lawyers from the front line. Although I was a lawyer 20 years ago, I don’t really know what conduct of a litigation matter or a real estate transaction is like — but our lawyers do. I need some of those lawyers involved — working with our current suppliers to test product, working with the startups to develop ideas, working on university projects thinking about future use cases. So, we have a small cohort of lawyers who have had 20% of their fee-earning targets eliminated so that they can spent that time on technology-related projects.

JB: What has the feedback been from the associates and partners?

NW: The feedback has been great. Those who have been involved have really enjoyed it and learned a great deal from it — about how hard it is to run a start-up, about product development, about product management and feature prioritisation. They’ve also had their minds opened to the possibilities that technology brings to their particular field of practice. Obviously not every employee at Mishcon de Reya is involved, but the reach is wider that you’d think because we livestream events like Pitch Day and Demo Day. Overall, we have 30+ people acting as mentors to the LAB companies this year and many more working with them day-to-day.

What the LAB has done is to infuse a group of legal professionals who really love tech to have a common interest, a common platform to talk about how technology is changing the practice of law. Many of these people are the ones who are already working the 60+ hours a week, but because they are interested in new ways of working will still find 5 hours to pilot new technologies. There are now about 100 people like that in the firm. Some of those are the ones now spending 20 percent of their time on this work and have gotten approval to lower their billable hours to improve the technology of the firm. Some are even making their case for partnership through their work in the LAB.

There is no doubt that over the past couple of years we have gained a good reputation as a firm doing innovative things. And that’s helpful in client conversations and when we’re recruiting. This is not just MDR LAB, but all of the tech stuff we’re doing — the LAB has been a lightning rod, helping us to attract innovative, energetic people.

JB: Do you think there will ever be a legal Jeff Bezos in the next decade? (i.e., a billionaire who blows up the whole market)?

NW: That’s a tough question. And I’m probably the wrong person to ask. A lot of what we do is try to make the existing processes better and more efficient and to think of new and better ways to do things within the current confines, such as the courts’ procedural rules on how to litigate or the current paradigm for a real estate transaction. What’s really happening is that legal is catching up to the wave of digitization and automation that happened in other industries in the 1990s and 2000s.

What’s really needed is a completely different way — and it’ll probably need an outsider to do that. I mean someone who completely reconfigures transactions — diligence replaced by insurance, negotiation replaced by standard terms, etc.

How likely is that? Lots of people talk about it, but when you get into the detail it isn’t easy. Clients really just want to get the legal stuff done and move on, rather than rewire the whole system, and it’s hard for those of us in the system to revolutionize it. So, I don’t hold up much hope for the market blow-up… but if anyone out there has an idea, I’m all ears…

JB: Thanks Nick, awesome stuff!


Joe Borstein Joseph BorsteinJoe Borstein is a Global Director with Thomson Reuters Legal Managed Services, delivering Pangea3 award-winning legal outsourcing services and employing over 1800 full-time legal, compliance, and technology professionals across the globe. He and his co-author Ed Sohn each spent over half a decade as associates in BigLaw and were classmates at Penn Law. (The views expressed in their columns are their own.)

Joe manages a global team dedicated to counseling law firm and corporate clients on how to best leverage Thomson Reuters legal professionals to improve legal results, cut costs, raise profits, and have a social life. He is a frequent speaker on global trends in the legal industry and, specifically, how law firms are leveraging those trends to become more profitable. If you are interested in entrepreneurship and the delivery of legal services, please reach out to Joe directly at joe.borstein@tr.com.

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