For years Slaughters epitomised City conservativism but, reports Thomas Alan, marquee clients and a clear structure mean its new law tech incubator is being closely watched
The value of legal tech incubators is much debated in the industry. The jaded in the tech community often decry such initiatives as marketing opportunities and even many start-ups themselves are sceptical, comparing some law firm incubators to ‘fish bowls’.
But when City leader Slaughter and May in February announced its intention to launch a second incubator focused exclusively on legal tech, anticipation grew in the start-up community. ‘It’s their clients,’ said one legal start-up founder when asked what distinguishes Slaughters’ Collaborate programme.
And Slaughters’ marquee clients have had a direct role in pulling the incubator together. GlaxoSmithKline, John Lewis Partnership, Santander, Standard Chartered and Vodafone are part of a client panel backing the venture, and all voted on the applicants for the first cohort.
‘The client panel is a major part of the appeal,’ says Slaughters’ head of innovation Jane Stewart (pictured), ‘but it’s also flexible. We’re not insisting they sit in our offices or can’t work with others. They can continue the relationships they have already been working on’.
Members also get access to test products and gain feedback from an ‘expert panel’, which includes Anna Donovan, the vice dean for innovation for the Faculty of Laws at University College London, the founder of legal engineers BamLegal, Catherine Bamford, and Andrew Burgess, an adviser on artificial intelligence (AI) and robotic process automation.
With applications open between February and 27 March, the first cohort was announced on 29 April, with the emerging names suggesting a focus on nascent start-ups. Logiak, Tabled, JUST: Access, LitiGate, StructureFlow and Clarilis make up the debut cohort. The companies are diverse, with JUST: Access a tool that automates the transcription of court proceedings, while LitiGate features as part of the growing pool of companies entering the market for AI-backed disputes tools. Clarilis is a contract management and contract automation offering, with one of its founders, James Quinn, an ex-Slaughters lawyer.
‘The client panel is a major part of the appeal.’ Jane Stewart, Slaughter and May
The stature of names differs significantly from that of Magic Circle counterpart Allen & Overy (A&O)’s latest Fuse intake, which saw relatively established technology players such as Avvoka, Legatics and Nivaura all remaining in place. Stewart says one ‘very’ established technology company nearly entered the Collaborate programme, but Tabled was preferred.
Though in the past some have dubbed Fuse a ‘zoo’ while others lamented a lack of structure in the incubator’s programme, A&O’s venture has achieved an enviable prominence in the legal tech community. It also remains the case that start-ups in the programme generally value it highly.
But in some respects, Collaborate more closely resembles Mishcon de Reya’s MDR LAB, with a 12-week programme providing a shorter, more intense spell than A&O’s Fuse. Slaughters remains agnostic on taking equity in another start-up. The law firm currently holds approximately 5% of Luminance, which is worth over £5m on the business’ current valuation. But – unlike MDR LAB – the taking of stakes in chosen members of its incubator is not general policy.
The architects of Collaborate also opted against having a physical space for companies, with Stewart suggesting initial research showed many companies felt indifferent towards such facilities. Nevertheless, one member of Fuse contests this, arguing that the lack of physical space at Collaborate was the primary reason their company didn’t apply. ‘It’s a shame it lacks the physical presence,’ said the Fuse inhabitant. ‘We find it promotes greater internal and external uptake.’
Across the 12 weeks, there are fixed dates for both demo days and focus groups, with exposure to the Collaborate client panel present throughout. Each company has been allocated two mentors: one from Slaughters’ innovation team and another a practising lawyer relevant to the company’s services. ‘The focus groups will vary from product to product as they will require different things,’ Stewart continues. ‘But clients have also volunteered to give sessions throughout the programme.’
Despite Slaughters’ reputation for conservatism, the move to create a legal tech incubator is understandable. Firstly the firm already has one, with its fintech incubator Fast Forward. Secondly, the firm has also helped establish one of the start-up scene’s most recognisable names in AI provider Luminance and win brownie points for being progressive into the bargain. It is also true that the legal incubator scene is becoming increasingly popular, with Dentons, A&O, Mishcon, Thomson Reuters and Barclays all having such programmes.
‘There’s no shortage of them in the City now,’ says one (relative) veteran of the legal start-up scene. ‘People do seem excited by Slaughters’ entrance.’ Exposure to such significant clients undeniably accounts for the excitement of start-ups, while Slaughters gets a means of re-enforcing its credentials in the technology sphere and demonstrating to plc clients its willingness to, ahem, collaborate to provide general counsel with more value. Whatever the reservations about the prospects of law firm incubators, there will be more firms joining the in-crowd in 2019.
For more, see our spring legal tech special.