Knowledge Is Power – The Success Story Of LexMachina

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In one of the mythical scenes from the Matrix, Morpheus connects Neo to several electrodes and cables and “uploads” into him the knowledge and skills of martial arts within a few minutes. At the end of the process, Neo opens his eyes and says one of the most well-known sentences in the trilogy – “I Know Kung Fu”. Unfortunately, we have not yet attained this type of technology and we cannot yet recall masses of information. For this purpose, there are legal databases. Their role is to allow lawyers to find, to understand and to apply the law better, and having control over them is undoubtedly an important ability.

In many ways, LexisNexis is the pioneer of internet databases for legal material. The company, which now provides access to billions of case, has been allowing access to legal files since the early 1970s. Since then, LexisNexis has changed legal work from the ground up, and has profoundly influenced all the databases that followed. That is one of the reasons why it seems worth taking its last purchase seriously – Lex Machina.

The LexMachina story begins in 2006, as a project of the law school and computer science department of Stanford University. In 2008 the project turned into a company and a year later the initial product was available for use. LexMachina, a “legal machine” in Latin, provides a smart analytical tool for a smart analysis of legal information. The services offered by the company extract documents from many public databases, and offers various studies on demand. The structure of the data that the service generates, assists lawyers make informed decisions based on empirical data.

For example, a tool called the Early Case Assessor allows lawyers to quickly assess the chances of success of a particular case in court by entering the name of the plaintiff and the law firm representing him/her, the user receives a comprehensive review of the data and an analysis of the chances of success in the case. Another tool, called Motion Kickstarter, assist lawyers in formulating winning arguments by analyzing the types of arguments that have “worked” with a particular judge in the past. Other tools offer building profiles for judges, rival law firms, building legal strategies and more.

Prior to the acquisition of LexisNexis, the company focused mainly on the analyzing documents from databases with respect to patents, trademarks, etc. But now that it has access to the impressive LexisNexis databases, this issue is about to change. “The focus is now on expanding our existing services to other areas of law,” Josh Becker, the company’s CEO, confirmed in December 2015. The initial target, he says, is to analyze and add more than a million new portfolios to the database.

The acquisition attests more than anything else to the direction that E-Discovery has been moving in recent years. After decades of lawyers relying predominately on internet databases, just like Lexis Nexis, the rise of companies such as LexMachina throws a spanner in the works and marks a fundamental change in the way lawyers access information on the internet. With the help of these services, lawyers can save time and receive refined, concise and accurate information at the touch of a button.

Although the amount Lexis Nexis paid for the acquisition was not disclosed, we can safely say that it was a significant amount, in part because LexMachina had a respectable customer base even before the acquisition, with nearly half of the top 100 US intellectual property firms and companies like eBay, Google and others. However, LexMachina’s service is currently available only in the United States, and usage costs are still quite high. According to Becker, the expansion of the company into broader fields will eventually lead to a fall in costs. In the meantime, similar services are also offered at high prices, but it seems that the day is not far off when such powerful solutions will be common knowledge. Until then, we will continue to keep track.

We at Robus are leading Legaltech in Israel and are promoting innovation in the field. Do you have a LegalTech project that you would like to promote? Have a free consultation with us and we would be happy to share with you our vast experience in bringing your project to new heights.

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