Daniel Katz Launches Fin [Legal] Tech

It’s a big challenge to organize a day-long legal technology conference—but it’s not every day that organizers find themselves competing with five million people pouring into their venue. The inaugural Fin [Legal] Tech conference, held November 4 at the Chicago-Kent College of Law/Illinois Institute of Technology, started at 7:30 a.m.—as planes, trains, cars and feet were delivering exuberant fans to the Major League Baseball’s World Series parade to celebrate the Chicago Cubs’ win after a 108-year drought. (Their last win was in 1908, seven years before James Fields Smathers of Kansas City invented a new technology: the power-operated typewriter.)

But even though a few dads and moms decided to skip the conference to take their kids to the historic event, the inaugural Fin [Legal] Tech had almost a full house.

OPENING ACT

Daniel Martin Katz, Associate Professor of Law and Director of The Law Lab @ Illinois Tech, is the founder of the new conference. He kicked it off with “The Opening Act,” setting the stage for the ambitious event. Katz framed the concept that lawyers and law firms must start adopting finance tactics and tools if they want to continue to succeed.

Great lawyers, said Katz, “design systems that balance risk and improve transparency, helping clients correctly price risk internally.” Katz argued that lawyers need to help their clients predict and manage risks in transactional matters, and in litigation, to predict risk and exposure—and have better control over the expected value of a lawsuit.

In compliance, it’s important to “identify and prevent rogue behavior,” and help the parties monitor behavior in (near) real time, he said.

Experts, crowds and algorithms will all factor in the evolution into Fin [Legal] Tech, Katz noted, citing existing examples, such as predicting the decisions of the Supreme Court of the United States in FantasySCOTUS.

TED-STYLE PRESENTATIONS

After setting the stage, the remainder of the conference was presented in “TED Talk” mode. More than 25 speakers offered 13-minute segments, broken down into five sessions. The topics included:

• Quantitative Legal Prediction—From Costs to Outcomes (and Beyond.)
• Legal Underwriting/Characterizing (Pricing) Legal Risk/Legal Portfolio Management.
• Markets for Legal Finance/Legal Insurance.
• Computable Contracts, Blockchain and New Legal Information Infrastructure.
• Toward a Frictionless Delivery of Law.

The wide range of presenters included academics, startup CEOs, Biglaw attorneys, finance leaders, venture capitalists, independent consultants and analysts, pro bono executives, investment managers, insurance executives, and attorney/self-help service leaders.

The most provocative session discussed third-party litigation financing. The advantage, said the speakers, is that law firms and their clients can not only reduce the risk of the litigation, but can also reduce the cash flow that is needed during the early stages of the litigation (for example, e-discovery and depositions). Third-party financing also can help when a litigation goes to appeals.

In the client’s case, third-party financing can minimize the financial risk of funding legal fees and expenses, when the chance of success is still difficult to assess. In the case of the law firm, it removes some of the burden of fee pressure, and it eliminates the need to consider contingency-fee structures.

The event ended with a closing reception at the Chicago office of Dentons.

ATTENDEE OBSERVATIONS

• William Henderson: “This was a real watershed event. Through more than 20 presentations of practitioners, entrepreneurs, in-house lawyers, and law professors, Katz’s lens of ‘law as finance’ proved to be remarkably versatile and durable. There are new business models here that are clearly taking hold. This was a tremendous learning experience.”

• David Baker: “Law firms have been characterized as ‘late to the game’ in the use of advanced analytics employed by other industries such as transportation, military and professional sports…. Dan Katz is looking to change that through his work at Chicago-Kent and, in particular, this first annual conference focusing on legal analytics. The topics and discussions at the conference were more than engaging; they set the stage for growing visibility of the intersection point between advanced mathematics and information sciences as applied to both the practice and business of law.”

• Paul Lippe: “Dan Katz and Chicago-Kent …. pulled off an event that combined better integrating law and technology; developing better ways to think about how legal work product is used; and solving some of the hard problems in reducing friction in the financial system.”

• D. Casey Flaherty: “Dan is doing more than trying to change behavior. He is trying to change the way we think about the law, the value of lawyers, and the system of legal service delivery. I, for one, am captivated by his vision, and this conference demonstrated that I am far from alone.”

• Jennifer Schwartz: “This excellent exchange of ideas—ranging from theory to real-world application—has me wondering 1) how fast is the rate of change for legal innovation; 2) who are the early adopters; and 3) who will be the winners and losers be in the future delivery of legal services. Consumers of legal services …  will be the biggest winners, from large companies like AIG to indigent communities who need better, faster, and cheaper access to our legal system.”

• David Cowen: “While the practice of law may be slow to change, the business of law is about to evolve more rapidly in the next 10 years. Artificial intelligence, predictive analytics and advanced technologies are just too powerful to ignore.”

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Monica Bay is a Fellow at CodeX: The Stanford Center for Legal Informatics and a columnist for Above The Law. She also writes for Bloomberg BNA’s Big Law Business and is an analyst and consultant. A member of the California Bar, she frequently can be found at Yankee Stadium. Email: [email protected]. Twitter: @MonicaBay.