While recent years have seen the market flooded with innovative legal technology products, the reality is that not every new offering achieves lasting success. Inevitably, for various reasons, some products will fail. It is certain that while some products fade quietly, others cease operations dramatically.
This article reviews five of the most significant legal technology failures of the last decade.
1. Atrium
Atrium launched in 2017 with considerable publicity, promising to revolutionize legal services through a dual entity structure: both a law firm and a technology company. Its founder, Justin Kan, was a prominent Silicon Valley figure who had previously established Twitch, which was sold to Amazon for $970 million. The venture commenced with $10 million in initial funding, followed a year later by a substantial $65 million raise from major venture capital firms.
Upon its launch, a columnist at Above the Law questioned whether the situation mirrored the earlier demise of Clearspire, a strikingly similar dual entity firm that opened in 2010 and closed four years later. As the saying goes, those who overlook the past are bound to repeat it. Within three years, Atrium ceased operations, despite an earlier attempt to pivot to a different business model. Kan publicly acknowledged the failure on Twitter, stating, “Things didn’t work out as planned, and that is my responsibility.”
2. QuickLegal
In 2016, legal technology entrepreneur Derek Bluford, then 28 years old, was experiencing significant acclaim. He had earned accolades for his ventures, first establishing California Legal Pros, a company marketing various legal services to both consumers and lawyers. He then launched QuickLegal, a service providing on demand legal advice to consumers, followed by QuickLegal Practice Management, a cloud based platform for lawyers. Bluford had even been selected to appear on the popular ABC television show Shark Tank and was scheduled as a featured speaker at a major legal tech conference shortly thereafter.
However, his success collapsed when reports surfaced in 2016 concerning Bluford’s settlement of a lawsuit that accused him of impersonating a lawyer, forging legal documents, and fraudulently defrauding two clients. Following the publication of this information, QuickLegal quickly shut down. It later reappeared as a similar startup named LawTova. After coverage of that company, it also closed. Coverage of another startup with ties to Bluford and QuickLegal also followed, resulting in its closure.
Despite these events, Bluford’s story continued. In 2020, he published a book claiming to have acted as an FBI informant in a political corruption investigation involving the former mayor of Sacramento, California, Kevin Johnson, a former NBA player. Subsequently, in 2021, Bluford was sentenced to seven years in prison on charges related to the fraud and forgeries that had been reported in 2016. (A full series of posts about Bluford can be found online.)
3. ROSS Intelligence
ROSS was pioneering in its ambition to leverage artificial intelligence for legal research. It originated in 2014 at the University of Toronto as a student entry in an IBM sponsored cognitive computing competition aimed at developing applications for its Watson computer. The company rapidly gained momentum and international recognition, attracting major investors, including Denton’s NextLaw Labs, and its founders were invited to join the prestigious Y Combinator startup incubator. In 2017, the three founders were recognized in Forbes’ “30 Under 30.” In 2019, a lengthy post documented the company’s history, potential future, and what was observed during a visit to ROSS’s Toronto research and development office.
The trajectory for ROSS abruptly changed when Thomson Reuters filed a lawsuit against the company in 2020. The suit alleged that ROSS surreptitiously stole content from Westlaw to develop its own competitive legal research product. Although ROSS strongly denied the allegations, the lawsuit severely hampered its ability to secure new funding or pursue potential acquisition opportunities. In December 2020, the company announced its closure. Despite no longer operating, ROSS continues to litigate the lawsuit, with its defense and counterclaims financed by insurance coverage. The lawsuit remains active as of this writing.
4. LexisNexis Firm Manager
The year 2008 marked the debut of the first two cloud based law practice management platforms. In the subsequent years, several similar products entered the market, including PracticePanther, Zola Suite (now CARET Legal), and CosmoLex. In 2011, LexisNexis joined this growing segment with the release of Firm Manager, a web based practice management platform intended for smaller law firms.
Unfortunately, the product’s launch was problematic, plagued by significant performance issues, and it struggled to gain market share in what quickly became a saturated environment. LexisNexis later undertook a comprehensive redesign, releasing the rebuilt version in 2016 as Firm Manager 2.0. By then, however, the product’s fate may have been sealed. In January 2017, LexisNexis announced it would discontinue sales of Firm Manager, and it subsequently shut down the platform entirely later that year.
5. Gavelytics
The closure of the litigation analytics company Gavelytics in 2022 surprised almost everyone except its founder. The company was widely regarded as a leader in the rapidly expanding litigation analytics sector. Since its founding in California in 2017, it had significantly broadened its product scope and raised $5.7 million in funding. The sudden announcement by founder and CEO Rick Merrill on June 29, 2022, that the company would close its doors the next day was a dramatic development.
However, the story of Gavelytics has a somewhat positive conclusion. Six months after its shutdown, another litigation analytics startup, Pre/Dicta, acquired the Gavelytics platform and its accumulated court data, and brought Merrill on as a strategic advisor.
Bob Ambrogi is a lawyer and journalist who has written and spoken about legal technology and innovation for over two decades. He writes the award winning blog LawSites, is a columnist for Above the Law, hosts the podcast about legal innovation, Human&Legal, and hosts the weekly legal tech journalists’ roundtable, Legaltech Week. He is also cofounder of the Human&Legal Legal Technology Directory.
