Focus On

Technology startups in limelight at CBA

Thursday, November 10, 2016 @ 7:00 PM | By Simon Hally

All that was missing was reality TV judge Simon Cowell. Apart from him, “The Pitch” had everything you’d expect from a talent competition, including bright lights, loud music, excitement and drama. But it wasn’t on TV and it had a serious purpose.

The contestants were legal technology entrepreneurs, the audience was full of lawyers, investors and innovators, and the unlikely venue for this slickly produced, hour-long extravaganza was the Canadian Bar Association’s 2016 legal conference in Ottawa.

“Essentially The Pitch was the Canadian legal innovation awards for legal startups,” says Aron Solomon, innovation lead for the LegalX cluster at MaRS Discovery District, which co-sponsored the initiative with the CBA.

Thirty-two early-stage legal technology companies entered the contest and were narrowed down by an online panel of judges to five finalists who presented their ideas on stage Aug. 12 at the Westin Ottawa.

“Even a few years ago we might not have had nearly as many entrepreneurs take part,” says Fred Headon, chair of the CBA’s Legal Futures Initiative. “It’s very encouraging to see so many minds focused on helping us improve legal practice.

“We had a two-fold goal: to give startups some exposure, connections and access to capital, and to encourage law firms to think about what they can do to improve their practices through the use of innovative legal technologies.”

“The event got a lot of attention globally,” adds Solomon. “Since The Pitch there has been massive interest from other countries about how to bring a similar style to their legal innovation events.”

Headon explains how the contest originated: “After the CBA Legal Futures Initiative was struck a few years ago, the idea emerged from a recommendation to create incubators for helping entrepreneurs. With the arrival of LegalX and the Legal Innovation Zone at Ryerson, we wondered how we could showcase some entrepreneurs. The Pitch was a bit of a test. It exceeded expectations so we hope to do it again.”

Nevertheless, a single event can only go so far in helping legal technology startups, says Colin Lachance, former CEO of the Canadian Legal Information Institute (CanLII), who represented one of the finalists, Rangefindr, at The Pitch.

“It was an amazing event for showcasing legal innovation and raising consciousness, but was it the best way to bring startups together with people who can help them? No. That’s largely because the contest only highlighted companies that already know how to get attention,” Lachance says.

“If the question is how do we give support to the startup community, we need to do it in a lot of small ways, with constant communication.”

At the event itself, the finalists each had seven minutes to describe their products, followed by five minutes of questions from an independent panel of judges representing the legal innovation and investment communities.

At the end of the hour the judges made their decision. And the winner was…

Cian O’Sullivan of Beagle Inc., developer of a productivity tool that reads contracts and provides summaries of their terms in seconds. He won a two-week residency with LegalX.

The People’s Choice Award, chosen by audience vote, went to Mona Datt of Loom Analytics, which offers an online system allowing for statistical analysis of case law. Her prize was a legal health checkup from Gowling WLG.

The other finalists, in addition to Lachance of Rangefindr, a tool that assists lawyers and judges in finding criminal sentencing ranges in seconds, were Adam LaFrance of Knomos, creator of a collaborative legal research and knowledge-sharing platform, and Benjamin Alarie of Blue J Legal, which enables lawyers to simulate court judgments in new situations using artificial intelligence.

“We’ve had a lot of traction as a result of The Pitch, with law firms approaching us for more information,” said audience favourite Datt, “but the main thing was the effort to get lawyers to be more accepting of legal technology.

“Adoption is an ongoing problem in any industry and there’s definitely resistance from lawyers. A lot of what people push back on is what they don’t understand, so having the event as a competition, with people standing on stage and talking about legal innovation, made it not so scary.”

Lawyers’ nervousness about new technologies isn’t the only reason entrepreneurs can have a tough time breaking into the market, says Lachance.

“Most buyers just aren’t ready for the latest and greatest technology. Startups may be competing with systems already being used by law firms. Incumbent vendors are often better positioned to move customers forward,” he says.

Another continuing challenge for early stage entrepreneurs is the conservatism of Canadian investors, says Datt: “They don’t invest in pre-revenue companies. We have to go outside Canada to get capital,” in particular to Silicon Valley.

Despite reluctant lawyers and risk-averse investors, however, there’s no shortage of legal technology entrepreneurs in Canada, Solomon says.

“There are no comparative statistics but I can tell you we’ve made Toronto into a global legal innovation and technology hub. We at LegalX have relationships with over 50 startups, a nice hunk of whom are from the Toronto area. This is extremely competitive on a global scale.”

Immediately after The Pitch, each finalist had an interview with Alan Yang, vice-president of the China Canada Angels Alliance, for consideration for the Chinese Angels Mentorship Program. If selected for the program, they could ultimately receive an equity investment of approximately $200,000.

“I was very impressed with the event and with all the finalists,” says Yang, who was one of the judges. “Other industries have more of a history of innovation but legal innovation is just getting started so this is an exciting time. Innovation depends on strong people, and great things are happening in law right now in Canada.”