on Jan 13 2014
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.
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.
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.
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.
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.
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.
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.
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.
As soon as our enterprise software is ready to the security standards that firms demand -- likely in six months.
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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