What we do: Casetext democratizes the wealth of legal information by creating a crowdsourced platform for researching legal documents. Created by former Presidents of the Stanford and Harvard Law Reviews, the free platform opens access to legal information by providing annotations from experts across the field.Why it's a big deal: Law firms collectively spend billions of dollars every year on commercial legal research databases. Despite the fact that the information is law--which, of course, is public domain-- law firms will shell out this money for services that provide advanced search tools and value-added content on top of the law. These services save lawyers their time, and thus their money. Casetext is completely disrupting this market by offering a crowdsourced annotation platform for legal research--for free. With 250,000 visitors every month and over 100,000 posts from 35,000 users, Casetext is capitalizing on the massive demand for a service that saves legal researchers' time and money. No wonder they rased $7M in Series A funding. Casetext is leading a revolution in access to useful legal information.
The key idea behind Casetext is that the annotations that drive legal research databases like Lexis and Westlaw can be crowdsourced. While the "core of Casetext – access to over a million cases, users’ annotations, and the ability to annotate – is free."
Imagine if you could combine a full-text case law library for research with crowdsourced editing and annotating in the style of Wikipedia and user rankings of annotations and references in the style of a site such as Digg? "Casetext reflects the sort of innovative thinking that will define the next generation of legal research."
There are many people who can enumerate the problems within the legal research field, but there are few who could develop a nuts-and-bolts solution. To be sure, this was an undertaking designed for no less than the former President of the Stanford Law Review and the former President of the Harvard Law Review.
Casetext co-founders Jake Heller and Joanna Huey sprouted the roots of their powerhouse team by first becoming friends in school at Stanford and Harvard, respectively, after meeting at a conference for law review presidents sponsored by Westlaw. Ironically, this is the very legal research company they seek to first augment, and then replace with Casetext, a platform that democratizes legal information by making it free and accessible.
“People without a lot of money don’t have access to the law, and for me, it’s more of a moral than a monetary issue,” Heller said.
Heller and Huey, now best friends and business partners, recognized early that the world of legal research could be perfected. The answer was Casetext, a community-driven legal research vault that operates on a freemium model, provides analysis on top of facts and also creates a two-way street equally valuable for both contributors and researchers.
Why The Existing Model Needs To Be Changed
Casetext projects it will be able to capture $1.4 billion of the current $8 billion market dominated by Westlaw and LexisNexis, two research platforms consuming a large portion of lawyers’ time and legal firms’ budgets. The two companies are used by 83 percent of lawyers and cost large law firms an average of $3 million, Emory Law reports.
Any attorney worth their weight allocates about 30 percent of their time researching, according to LLRX, Rebooting Legal Research in a Digital Age. But digging into legal precedent and studying which rulings have been overturned takes time and costs money. A current workload flow might include an associate doing research for partners, another person making annotations, and yet another printing and organizing documents.
And that’s been the standard process until recently.
But the recession incited many clients to disavow the value of legal fees that included research and other backend costs, the Wall Street Journal reported. Casetext represents a shift in how law firms are operating in general, as less expensive tools mean lower lawyer fees.
How Casetext Works
To overturn this model and create a democratized and cost-effective platform, Casetext allows a community of users, who create a robust profile for themselves using their real names, to contribute to a research collective in a user experience much like Wikipedia or Quora.
Annotations come from a variety of experts with every incentive to participate. Lawyers, for example, are motivated by the potential for referrals and increasing their base of clients. Professors are able to assert their expertise in their fields, thereby garnering speaking invitations or press coverage. Law students, expert witnesses, law clerks, and others also contribute to this information collective.
Casetext is currently free and open to everybody. It will make money through Premium features, which include private-in-firm annotations, advanced analytics such as a heat map that shows highly searched pages and topics, and tools such as saved search history.
Casetext as a platform also fits into the larger web trend in which the value of the community supersedes that of the expert. Casetext cites as examples Wikipedia replacing Encyclopedia Britannica or Yelp filling the shoes of Zagat Review.
In just seven weeks, users added thousands of contributions to Casetext, with annotations growing by 33 percent, visits increasing by 51 percent and page views jumping 27 percent.
Notable contributors include Richard Hasen, Chancellor's Professor of Law at the University of California, Irvine School of Law in Irvine, California, who added analysis to Shelby County v. Holder, the recent Voting Rights Act case. Gregory Fleischmann, Director of Marketing at Baker McKenzie, recently contributed his firm's articles and client alerts.
Heller said he eventually sees a grand vision of a platform that includes all the world's laws, free and fully explained.
"You can be in Nigeria, and you want to know the local plumbing laws, for example. All those laws that are hard to find will be instantly accessible," he said.
Why The Founders’ Backgrounds Matter
Both Heller and Huey said they are motivated not just by the desire to democratize information, but also by their own passions and interests.
Huey's background is in science and technology law, and she is interested in issues such as how patents might hamper innovation or why some diseases are allocated funding while others aren't.
Heller is passionate about voting rights and laws that curb corruption and politics, and sees information as the root of change.
The duo also possesses skills and passion many lawyers do not – they’re tech whizzes. Heller worked as a full-time web developer and Huey worked as a front-end coder and designer before launching Casetext.
Heller had originally convinced himself at a young age that startups couldn't have a great impact and that he wanted to go into policy. He interned in the White House Council Office, worked for local politicians before working as a law clerk at a litigation advocacy group.
"With all these experiences, I realized policy was really frustrating and slow and political," he said. "Things don't really happen in the best interest of people. I was kind of naive, and it was disenfranchising to see how the sausage was made."
He said he watched how Google, Reddit, Wikipedia and Quora, for example, were affecting people in a profound way. And it made him realize how much of a difference he could make.
So he melded together these platforms to create something that draws people to want to contribute to a collective body of work that was essentially helping everyone in their field -- while simultaneously building a name for themselves.
He sees Casetext as informing everyone from a critical mass on college campuses to people working in political and legal fields.
"I faced people working in politics who didn't fully understand what was going on -- just the big opinions. But when people fully understand, that's how change happens."
Why did you pick this idea?
Jake’s frustration with free legal research led him to code a browser extension for himself that replicated some of Westlaw’s functionality in Google Scholar. He realized that such a tool had a market when his firm told attorneys to use Westlaw less to cut costs, but the attorneys never did because there were no good cheap alternatives.
As lawyers, we know what features are important, and what’s missing. As law review presidents, we made connections to law professors and colleagues who will be key contributors to the community. And as coders, we know that what we want to achieve is doable. Our unique background makes us singularly qualified to solve this problem.
Who are your competitors?
Our main competitors are Westlaw and Lexis. They are comprehensive, but prohibitively expensive. Searching in some databases costs over $3,000 an hour
Free and cheap options exist, but their offerings are often limited to the text of a case (no case summaries or histories, no links to relevant information). No large law firm uses a cheaper option as their primary research tool.
What's new about what you're making?
Law firms currently pay for extremely expensive tools (Westlaw and Lexis) that hire thousands of employees to generate content (much like Encarta and Britannica used to do). Free or cheap tools often display only the text of the case, missing key functionality that lawyers rely on to do their jobs.
Instead of paying thousands of attorneys to aggregate and create information, we use automation and crowdsourcing. Our automated aggregation includes sources that commercial tools ignore. Our crowdsourcing harnesses widespread discontent with Westlaw and Lexis into something productive. And our platform encourages lawyers to share comments or engage in discussions alongside the case text--a feature exclusive to Casetext.
What do you understand about your business that competitors just don't get?
First, firms are desperate for cheaper legal research. In 2007, clients started forcing firms to cover research costs themselves, rather than adding them to clients’ bills. Firms now urge their employees to use cheaper tools, but attorneys refuse because the quality is inferior.
Second, other startups in this space focus on search. However, the true value of Westlaw and Lexis is their organization and summaries of information. Furthermore, we understand that lawyers love to discuss the law and would value learning which comments and sources other lawyers find most important.
Third, producing content does not need to be costly because much of the work can be automated or crowdsourced.
How do or will you make money? How much could you make?
We will use a freemium pricing model. The basic product will be free to encourage community involvement. Our premium version, with West’s pagination, the heat map, and other useful research tools, will cost $100 per attorney per month--a fraction of what Westlaw and Lexis charge.
The legal research industry (comprised mainly of just two companies) is an $8 billion market. Large firms pay for multiple research tools, so we could get market penetration as high as 50%. Selling to just 50 large firms would net an annual revenue of over $50 million. If we reach 25% of the 1.2 million licensed lawyers in the U.S., our annual revenue would be $360 million.
How do you get users?
Lawyers find and start researching on Casetext in a number of ways. First, SEO brings tens of thousands of unique visitors to the site a month, most of whom are lawyers Googling for a specific case. Because we are one of a few legal sites not behind a pay wall, we rank highly on Google.
Second, word has spread virally. People who annotate on Casetext post the link to the cases they annotate on blogs, Twitter, and through email.
Third, word of mouth has spread word of Casetext to thousands of attorneys in the month since we launched publicly.
We also use the connections we built as law review presidents, to target legal scholars. Because the 80/20 principle applies to legal resources, we can direct beta users to concentrate on important cases. The resulting high-quality crowdsourced content, plus search and aggregated links, will attract users.
We encourage content creation by having high-profile advocates (e.g., Jake’s mentor Larry Lessig), tying contributions to on-site and real-life reputation (points, real names as usernames), and making actions that benefit everyone also valuable to users themselves (e.g., your upvotes, which benefit the community, are also a list of your most useful cases). We will make our premium tool free for law students (so they push for it when joining firms) and focus on selling to firms rather than individual attorneys.
What's your biggest risk? What keeps you up at night?
We stay up all night -- working, not worrying -- to build a large community. The size and quality of our community will, at least in part, determine the success of our site.
Can crowdsourcing provide the same value for more obscure cases?
Yes. We will give higher reputation points to people who are the first to annotate a case, much in the same way Yelp rewards users who review businesses for the first time.
When will you start charging law firms?
As soon as our enterprise software is ready to the security standards that firms demand -- likely in six months.
How many law firms will you need to sign up to be profitable?
Not many. At $100 a month per attorney for our premium tool, signing up a single large firm -- which can have over 1,000 employees -- nets us $100,000 a month.
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