We’ve written previously about Jason Mendelson’s disaffection for modern BigLaw practice. Mendelson, a BigLaw refugee (Cooley Godward Cronish) is a co-founder and MD at Foundry Group, an early-stage VC fund. He is also GC and MD at Mobius Venture Capital, an adjunct professor at Colorado Law, and author of Ask the VC.
Jason put his money where his mouth is. Foundry has invested an unspecified amount in FirstDocs, a “legal process automation company dedicated to providing business and legal solutions to in-house legal departments and law firms.”
He describes the rationale for the investment as follows:
We believe there is a large market for on-demand business solutions directed at law firms and legal departments. Both law firms and legal departments are constantly seeking ways to lower costs without suffering a drop in the quality of work produced. Legal departments are finding themselves overly constrained with regulatory and corporate compliance tasks. These burdens have increased as a result of Sarbanes-Oxley and are likely to become heavier and more time intensive with the regulations almost certain to result from the current economic crisis. At the same time, law firms are under intense pressure to decrease billings to their clients, while the cost structures of these firms have continued to bloat .
More about the product and “Law Firm 2.0″ after the jump.
One of Jason’s (pictured) long-running screeds is firms’ overcharging for assembly line work, especially venture fundings, which he believes are (or at least, should be) standardized by now. He calls that “Law Firm 2.0″ and thinks FirstDocs is a platform for a more-efficient system.
For law firms, automating this process allows for both faster and more consistent document creation – saving them time and money while increasing quality. For in-house legal groups, the company’s platform allows for unprecedented control and standardization of business documents which allows companies to more quickly meet their customers’ needs. The company brings together a deep understanding of how enterprises create, move, store, retrieve and derive information from their legal documents.
We’ve seen a lot of process-automation tools demonstrated but never used any extensively. Have you? Which work and which don’t? What are you looking for, or do you think they’re just an evil harbinger of legal services becoming even more commoditized?
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How’s legalzoom doing these days, anyhow?
How’s legalzoom doing these days, anyhow?
Most VC funds use standardized documents anyway – largely boilerplate. Any VC fund worth its salt knows this and has regular legal counsel that just takes docs down off the shelf and sends them to the target – for a very limited fee. There is low margin in VC investments from the legal work side, its all about getting the exit strategy work.
Most VC funds use standardized documents anyway – largely boilerplate. Any VC fund worth its salt knows this and has regular legal counsel that just takes docs down off the shelf and sends them to the target – for a very limited fee. There is low margin in VC investments from the legal work side, its all about getting the exit strategy work.