Monday, December 12, 2016

LexisNexis Enters Startup Accelerator Scene

, Legaltech News

The legal research giant is looking to support legal technology innovation with access to its data sets and mentors.

Josh Becker of LexMachina.
The technology accelerator has long been a staple of industries like financial services, business and health care, but true to form, legal has been slow to look to these innovation support programs. But as the demand for legal technology has expanded, large industry organizations have started to invest in accelerator programs as a way to support and customize technology startups in the space.


LexisNexis is the latest organization to take on a technology accelerator, offering startups access to its data, tools and professional networks. Heading the effort is LexisNexis' Lex Machina division, the Silicon Valley-based legal analytics software providers acquired by LexisNexis late last year. Lex Machina hosts the newly launched accelerator in its Menlo Park, California, offices, and CEO Josh Becker will head the program.

Lex Machina itself has roots in the Silicon Valley startup scene. The company was originally founded as a collaborative effort between Stanford Law School professor Mark Lemley and members of the school's computer science department (a partnership that has since been formalized into Stanford Law School's CodeX center), before seeking funding from Bay Area venture funds like XSeed Capital and Costanoa Venture Capital, among others.

According to Becker, the major draw for startups, especially those with an analytics focus, is likely to be Lexis' enormous data set.

"Our biggest obstacle was getting access to PACER data," Becker told Legaltech News, reflecting back on Lex Machina's early growth stages developing its legal analytics software. "It's expensive. It's a significant, significant amount, and we were spending that as a startup," he said.

Becker hopes that LexisNexis' accelerator will be a way to open the door for other growing startups to leverage the broad-scale datasets LexisNexis has to offer. "Lexis has that data. They have a lot of other very valuable data as well for a lot of legal startups, who might have the tech chops and the ideas, but may not have the data to do what they're trying to do," he said.

Whatever approach startups take, Becker notes that timing is perhaps the more important facet of a potential partnership. A potential startup collaborator should be "far enough along to take advantage of what we have to offer, but not far enough along that they say, 'We don't need it,'" Becker said.

Other accelerators in the legal tech space have largely been projects at universities supporting technology overall, or major law firms hoping to adopt and customize new technology for their organizations. CodeX and Suffolk University Law School's Accelerator-to-Practice are just two of the programs housed in academic institutions working to support innovation in legal technology.

Startup incubators borne of Big Law have been picking up steam as of late as well. Last week, global megafirm Dentons' technology incubator Nextlaw picked up its ninth partner investment in contract learning tool Beagle, while Baker Donelson's cybersecurity-facing accelerator took on encryption startup Galaxkey.

Becker said that LexisNexis' new tech accelerator hopes to work alongside these other incubators to push legal-facing tech forward overall.

"You need an ecosystem," Becker said, adding that while other industries may have more fleshed-out innovation accelerators, legal is only now starting to support growth not just at the earliest stages, but at the more midsized growth stages, where LexisNexis' tech accelerator hopes to focus.

While linking a younger startup with a larger company with lots of resources may seem like a dream come true, Becker, who has been both an angel and venture capital investor over the course of his career, said he's seen many young startups stumble under the weight of a large corporate partner.

"The timeframe of startups does not always intersect with the timeframes of a large company," Becker said.

The influx of resources corporate partners provide startups can actually slow startup growth, Becker noted. "As a startup, there's a risk of engagement with any big corporate entity because you have to be very focused. More startups die of indigestion than starvation," he explained.

"You have milestones you have to execute on. If you're a large company, you might have different timeframes—you can take a little longer," Becker added.
Becker hopes to use his Silicon Valley expertise and Lexis' resources to help young startups find a way across the perils of a big corporate partner.

"One of the things we're hoping to do with this accelerator is really be guides with them within Lexis, help them connect with the tremendous talent there and tremendous resources there as far as content there and other resource," Becker said, adding that he hopes to give participating startups opportunities "that can really boost their business and not be a distractor, but be a huge multiplier."



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