As Anthony Scaramucci aka “The Mooch,” the recently departed White House Communications Director, would likely say, “Civil litigation is a total clusterf**k.” And on this, he would be right (he went to Harvard Law, after all)!
Civil litigation is nothing like Law & Order: it’s super-slow, procedurally confusing, absurdly expensive, and then, in the end, you win or lose based on a coin-toss the “preponderance of the evidence.” Rough justice at best. But hey, no one is going give up their liberty or end up in jail, so let’s split the baby and move on, right?
But, wait, if civil justice is going to be rough, couldn’t it at least be fast, cheap, and easy? Shouldn’t routine commercial disputes be more “push button”? Shouldn’t you just be able to type up your version of the facts, upload your basic evidence, have a unbiased mediator look at both sides, and quickly come to a reasonable outcome? Does the rest of the expense and process add any value?
In my half-decade as a Biglaw litigator, I always believed there had to be a better way (a thought I’m sure many of you entertained while drafting second amended interrogatories on a contract dispute).
Well, today there is hope. A Stanford undergrad and Stanford Law alum, Stephen Kane, is building some awesome technology designed to make courts obsolete in straightforward civil disputes.
Stephen’s alt.legal company, FairClaims, is starting small with . . . well, small claims. But, over time, Stephen believes that FairClaims will travel up the courtroom value chain, streamlining the costs in time and treasure for all kinds of civil disputes. He even believes that with his DIY process, many claims can be handled without a lawyer (you can still use one, if you are into that sort of thing), at a fraction of the cost.
Enjoy the interview, and note that Stephen agrees with my assessment that alt.legal billionaires are coming soon . . . and he went to Stanford!
Stephen Kane
Joe Borstein: So a Stanford undergrad, Stanford law alum is seeking to make the world better with technology (we’ve heard that one before) . . . but you are taking this to the next level – attempting to redesign conflict resolution itself!? Tell us how you got the idea for FairClaims, and how it’s going to change the world.
Stephen Kane: Haha, I know, how original, right?
I got the idea by representing my own clients – I kept getting calls from people with small disputes and (1) on the one hand, it didn’t make sense for them to pay an attorney $1,500 to potentially recover $2,500, and (2) they just did not want to go to small claims court (I could hear it in their voice). So I tried finding a solution to help them, and when I couldn’t find one I got obsessed with the idea there should be one.
It’s going to change the world because there are millions of disputes each year that go unresolved, where both individuals and businesses lose out for one reason or another, and we’re going help create a world where that happens much less often.
JB: I love it. So walk us though it – how do people use your technology and circumvent the madness of small claims court? Is it so easy you don’t need a lawyer?
SK: It is – like with small claims court, you don’t need a lawyer to bring a Fair Claim. And we’re on a mission to make it more and more “push button” over time. We offer a few different chat, settlement, mediation and arbitration solutions, including video arbitration and FairChat. With video arbitration, each side signs up, shares their side of the story, uploads and comments on evidence, and gets a 30-minute video hearing in front of a qualified arbitrator. They then get a binding, court-enforceable decision within about three weeks. And FairChat is our DIY chat-settlement tool where the parties can discuss their case but also see suggested settlement offers via predictive analytics.
JB: So how big does it get? Is there a reason it has to stop at small claims? Can you DIY more substantial litigation?
SK: Good question.
No reason it has to be small claims, that’s just where we happened to get the ball rolling. And yes, I absolutely believe we can get to a place where people DIY more substantial litigation — as long as due process, rules, and solutions match the claim in question. But we can get there, say up to $100k or so, possibly more. And that doesn’t necessarily mean lawyers can’t partake (know your audience, right) — we’re an alternative to court whether someone has a lawyer or not. In any case, since some 90% of people who need a lawyer can’t afford one, most people badly need DIY — something we think about all day every day.
JB: So do where do you believe the alt.legal segment of the legal industry is now? Are we ready for true game changers of the Uber/Airbnb/Amazon level? Or will it be incremental? Will there be a legal Jeff Bezos?
SK: This is alt.legal’s golden era; Uber/Airbnb/Amazon-level change is upon us. And yes, I believe we’re ready for it. Now that people are comfortable seeing legal and online side by side (thanks to LegalZoom and others), and now that tech plays such a major role in other heavy duty industries like insurance, health care, and banking, the foundation has been laid for even greater leaps of innovation. I’d take it one step further: people are beyond ready for it — they in fact expect it, demand it, and will embrace it.
For all these reasons and more, a legal Bezos is totally inevitable.
JB: How did you get the guts to be a legal entrepreneur?
SK: I got to a point where I couldn’t not do something about this problem. The more I dug into the justice gap, the more I realized two things: (1) judicial inequities are a vast and growing problem, even for small claims, and (2) these problems are entirely solvable, even for large claims (not easy to solve but definitely solvable). So the cost of my efforts are dramatically overshadowed by our potential impact. And whatever courage is required from me and the team is continuously re-inspired by our mission and traction. It’s endlessly fulfilling and exciting.
JB: What advice would you give those aspiring to change the justice system through technology?
SK: Start small. Get learnings. Experiment. All the same things that are important to any innovator. And in addition to that, if you’re working on something for non-lawyers, empathy is key. Not just because it’s the right thing to do, but because trust is critical when it comes to delivering legal services, and people won’t trust you unless you give a damn. You may have a handle on the legal system because you’re an attorney or read law review articles for fun, but most people don’t. Therein lies the opportunity!
Joe Borstein is a Global Director with Thomson Reuters Legal Managed Services, delivering Pangea3 award-winning legal outsourcing services and employing over 1800 full-time legal, compliance, and technology professionals across the globe. He and his co-author Ed Sohn each spent over half a decade as associates in BigLaw and were classmates at Penn Law. (The views expressed in their columns are their own.)
Joe manages a global team dedicated to counseling law firm and corporate clients on how to best leverage Thomson Reuters legal professionals to improve legal results, cut costs, raise profits, and have a social life. He is a frequent speaker on global trends in the legal industry and, specifically, how law firms are leveraging those trends to become more profitable. If you are interested in entrepreneurship and the delivery of legal services, please reach out to Joe directly at [email protected].
