Young and in Legal Tech: Are You Sure You Want to Make the Leap?

Legaltech News interviews Legalist CEO Eva Shang on the emerging trend of young law firm grads and associates founding legal technology startups.

Zach Warren
5/18/2020
Original Article

About five years ago, I took the LSAT. It was more of a challenge than a distinct goal at the time, but I was 25, had worked at InsideCounsel magazine for a few years, and thought I’d at least kick around the idea of seeing what the legal world was all about. I studied on my own, took the exam, and while I wouldn’t have gone to a top five law school, I did alright.

So, I asked a few lawyers—including a few GCs, since I was at InsideCounsel—whether going to law school was something I should do. And top to bottom, every single one of them said the same thing: Are you sure you want to do that? Are you really sure?

The implication was clear. The law firm world isn’t friendly, especially for those without connections or a square plan. Since I wasn’t committed, the prevailing thought was that it’d be a waste of time and money. Instead, I went about getting an MBA and moving to Legaltech News a few months later, where I’ve now been editor-in-chief for four years.

For those who did some quick math above, I turned 30 last week. It’s the exact age where newly minted law school graduates and young associates have to answer the question: What am I going to do in life? For many, it’s the partner track—the law firm world is the historical, and perhaps easiest, answer for how to break into the legal system. But it’s not the only answer, and the realities of today’s legal system may be forcing potential lawyers to find alternative routes. And legal technology is increasingly emerging as an opportunity—though not one without risk.

In speaking with younger legal technology founders and executives, I found that the biggest challenge facing young lawyers and law students looking to the startup world isn’t generational bias, or a lack of communication, or even a legal profession unwilling to change. Instead, their concerns take the form of a risk-reward calculation: Is going out on my own worth more than an increasingly difficult law firm model?

The Changing Tides of the Old Model

It’s important to note at the beginning that law firm associates aren’t going away. The emergence of legal technology isn’t a replacement to the law firm track, but simply another option.

“I think what I did is still pretty rare. More people than not take the Big Law approach, and that makes sense—they went to law school to be a lawyer,” Jake Heller says.

Heller graduated from Stanford Law School in 2010 and did a fellowship and clerkship in Massachusetts, then work at Ropes & Gray for almost two years. But he couldn’t shake his desire to do something different; he started legal research company Casetext in 2013.

Heller said he entered the legal tech world because “I felt like while you’re able to be creative as a litigator, that piece of me was not fully exercised.” But others who eschewed the normal law firm track felt the lack of creativity less in the jobs themselves and more in their job prospects.

Eva Shang looked into law school while at undergrad at Harvard, but ultimately thought the tech world would be more to her liking. Following a stint with Y-Combinator, she combined the two to help found litigation funder Legalist. She is now Legalist’s CEO, where she leads a company that has taken in more than $100 million in funding.

While she hasn’t been in the law firm world herself, she has interviewed a number of Big Law partners on the Rainmaker podcast. During those interviews, she has found, “The way to make partner at law firms is not necessarily to be the best associate in the world. They’re starting to seek out other opportunities, whether it’s at litigation funders, or legal tech companies.”

Jerry Ting, co-founder of contract automation company Evisort, saw something similar. He would go to lunchtime talks while at Harvard Law School, where he’d hear from general counsel, managing partners, and others. “The pattern that I heard in the advice was along the lines of ‘Keep your head down, do deals, review contracts.’ You go through your first year, second year, third year, all the way up to your sixth or seventh year as an associate in a big law firm, and the reason you go through that quote-unquote partnership model is so you could get more examples and build experience. … Do you really need to read a hundred assignment clauses to know what an assignment clause is? I would argue that you don’t.”

This line of thinking led him and other Harvard Law students to found Evisort in 2016 while still in school. “That’s where the idea came from, was listening to folks who were real experienced giving us advice as young lawyers, and thinking there has to be a better way.”

That better way is tantalizing for many. Combined with an increased sense of job fluidity—job hopping has been in vogue with the millennial generation—and it’s no surprise that the legal tech startup track is being seen as a legitimate option for young attorneys. Shang said that she was recently at a legal tech conference and a panelist joked that the startup world is now filled with “third-year associates solving third-year associate problems.”

But maybe that’s by design? Sam Garcia graduated from Harvard Law School this time last year. He went to work for Debevoise & Plimpton for a few months, but found the tech world to be more to his calling. He recently joined venture capital firm Amplo, where he now analyzes, among other companies, legal technology startups.

From speaking with his peers, Garcia sees a different world than even 10 years ago, when a recession led people to prioritize job security. “It’s a lot more, ‘I’m going to be here for two-three years then get out and do whatever.’ I don’t know exactly how that’s changing the legal tech field, but I can’t imagine that it’s not benefiting it. There are a lot of people out there now who know how law firms work. It’s only a matter of time before there are all sorts of great ideas.”

Plus, there’s the ever-encroaching thought that legal technology isn’t just an option, it could fundamentally transform the way associates are treated in the very near future. Garcia says that in talking with fellow corporate associates and former classmates, there was a sense that they were aware their jobs could be automated at some point.

“They didn’t exactly know what softwares were out there, but they knew that somewhere, someone was working on a software that was automating their job. They were very aware of that,” Garcia explains. “There were some with varying degrees of denial, like, ‘You can’t automate this!’ And there were some that were very realistic about it and said, ‘Well, yeah, you probably could. We have self-driving cars, this is below that.’”

And this may be amplifying given economic realities, Shang adds. “Especially in the midst of a recession, you see a lot of big and midsize law firms that you would expect to be beacons of stability floundering a bit—conducting layoffs, having salary freezes. I think that really undermines the sense of confidence that a lot of young lawyers have had in these institutions for a very long time.”

It’s all about the finances of the situation, Shang explains. “The old model sounds great: If I could just go to law school, then graduate to a big firm and work there my whole life, make partner after six years, and then be a partner there where my salary gets higher and higher every year … that’s the best outcome. But because that’s not possible anymore, with the new economic reality of law firms, you see people taking different career paths.”

When to Make the Leap?

Add it all up and it paints a picture of legal technology as an attractive cove amid the rocky shores of law firm associate-ship. But especially for somebody either in law school or newly into their career, finding the time to start paddling isn’t an easy proposition.

Basha Rubin graduated from Yale Law School in 2010; she co-founded outside counsel management platform Priori Legal in 2011. For her, starting Priori fresh out of school was a “now or never” sort of vision.

“I had the thought at the time, which I think is not incorrect, that I had the fewest obligations than I would at any other time in life. I didn’t have a family I was supporting. I wasn’t moored to any vision of the future. I thought it was the moment to take a big risk. As you get further along in your career, the opportunity cost of making this decision is higher.”

That doesn’t mean it was easy. She views age as both a benefit and a drawback. The benefit was that people expect younger founders to have questions and are more willing to give them time. Her early clients were fellow Yale grads who wanted to give a young alum the chance; she says it’s “an opportunity you have when you’re young that you don’t have as you progress in your career in the same way.”

But at the same time, those chances don’t mean younger founders are immune to criticism, which means it will take extra effort to learn how lawyers with much longer careers function. Rubin says she spoke with one lawyer who said, “’Priori is the stupidest idea I’ve heard of in my 50 years on the planet.’ I thought wow, that’s a triumph, to be the stupidest idea.”

“There’s always a sense that younger people who haven’t practiced don’t know what they’re talking about, and in many ways I didn’t know what I was talking about,” she adds. “But there was a germ of an idea there that has really proven to be the way the industry is changing.”

For those going into legal tech, then, the question may be similar to what I received when I asked about law school: Are you really sure you want to do that?

“All of us were getting questions from parents, uncles at Thanksgiving, saying, ‘Oh, you’re really not going for a full-time offer?’” Evisort’s Ting notes. “There was culturally still a lot of pushback.”

And also unlike me, it’s important to know exactly why and how you want to get into legal technology.

“People who really start companies in this space and are eking it out day after day are some of the toughest people I know and the most committed people I know,” Rubin says. “Nobody would do this because they think it’s an easy way to make a quick buck. … I don’t often meet people who are unclear about whether they should be. They’re very clear about why they’re doing what they’re doing.”

That’s why, before making the final determination, everybody that I talked to had one simple but important piece of advice: Listen.

“It’s far, far, far too common for folks in the legal technology industry to not listen and to assume they know the answer,” Casetext’s Heller says. “To be honest, I feel like law students are the most dangerous crowd, because they think they know—like folks say, they know just enough to be dangerous. And it’s a really potentially negative situation where they think they know all the answers, and they don’t know anything.”

Listening is the primary way to help balance on a precarious tightrope, Rubin adds. “It’s a delicate line to walk when you’re starting a company between being humble and really knowing that you’ve never started a company before and you haven’t been practicing for 30 years. There are a lot of things you don’t know. But also having conviction that you have an idea that you really stick to and that you believe can be a serious changemaker in an industry that has struggled with change.”