New Era ADR announced its debut Tuesday as a legal technology company that aims to shake up the relatively staid world of alternative dispute resolution.
New Era said it has agreements with the National Academy of Distinguished Neutrals and Denver-based Judicial Arbiter Group Inc. to provide arbitrators and mediators for its nascent platform, a fully-virtual arena that seeks to resolve disputes within 100 days and save clients up to 90% in litigation time and expenses.
The growth and acceptance of remote work and a backlog of court cases from the coronavirus pandemic helped kick-start the Chicago-based startup’s plans for the new medium to mediate disputes out of court.
“The pandemic wasn’t a cause, but a catalyst, for the adoption of online dispute resolution,” said New Era co-founder and CEO Richard Lee.
While New Era has yet to score any clients, Lee noted his startup is in “advanced talks” with 10 to 12 organizations about establishing a pipeline of cases to utilize its platform for a flat fee.
He added that several law firms and organizations have also written New Era into almost 700 contracts, an important development since “arbitration is most commonly adopted through contractual agreements.”
Lee formed New Era after spending a half-dozen years as legal chief for Civis Analytics Inc., a political data science shop spun out of President Barack Obama’s 2012 reelection campaign.
Civis, also based in Chicago, received venture funding from former Google LLC executive chairman Eric Schmidt, a prominent proponent of big data.
Lee credited his fellow New Era co-founder, former Reverb.com LLC general counsel Collin Williams, for coming up with the idea for the company four years ago.
“The process of dispute resolution is broken,” Williams said in a statement. “In the 21st century we should not be spending years to resolve disputes.”
Reverb, an online musical instrument marketplace sold for $275 million in cash to Etsy Inc. in late 2019, hired Williams as legal chief two years earlier. The former in-house lawyer at Oracle Corp. previously spent a decade at Greenberg Traurig.
Over the last two years, Williams and Lee worked to refine their product and build a business model. Their one hang-up was how to get corporate clients and often technology-averse law firms to accept an online platform.
Then came Covid-19, which Lee said created an “interesting tailwind” for New Era as it brought a renewed focus on the amount of time and money it takes to resolve simple business disputes.
Litigation, as Lee sees it, is usually a distraction.
“It’s a problem that I’ve personally experienced as GC of two different companies,” said Lee, who prior to joining Civis in 2014 was legal chief for LiveVol Inc., a technology company sold the following year to CBOE Global Markets Inc.
Williams, who is now New Era’s chairman, added that “we need technology that assists litigants and their attorneys in actually getting to a resolution, not milling about in the system for years.”
A New Forum
Lee compared dispute resolution to the surging telehealth sector as being ready to embrace new ways of doing business as a result of the pandemic.
Within the past few months Lee said he’s spoken with judges, mediators, and litigators who have become accustomed to working remotely from states like Florida and have little desire to return to in-person meetings.
Many courts also remain closed due to Covid-19 with “only a trickle of civil cases” going through, said Lee, adding that when courts do fully reopen, criminal cases will be given first priority to move forward.
Lee said most litigants in the estimated 19 million civil disputes filed in the U.S. each year want to present their best arguments and evidence to get a decision in a realistic timeline, not become bogged down in discovery or procedural battles.
“We want to make the process more amicable,” said Lee, who also works with the Legal Services Corp. and hopes that New Era can eventually help bridge the access-to-justice gap affecting lower-income communities.
New Era’s resolution platform, which includes video conferencing, multi-party calendaring, and document management, has secured in-house endorsements.
The platform “gives clients the long-desired forum that enables much faster and more efficient dispute resolution,” said a statement from Lisa Young, a former top lawyer at legal staffing company Axiom Global Inc. who in January became general counsel for online lender LendingTree LLC.
Lee and Williams’ fellow New Era co-founders include Shane Mulrooney, of counsel at Chicago’s Litwin Law and a former general counsel at Home Chef, a meal-kit startup sold for $700 million in 2018 to Kroger Co., and former Civis director of compliance and legal operations R. Michelle Tyler.
Litwin Law and Croke Fairchild Morgan & Beres, a Chicago-based boutique founded by former Sidley Austin lawyers, are serving as outside counsel to New Era as it gets off the ground, Lee said.
New Era has also assembled a board of advisers that includes University of Chicago School of Law deputy dean Anthony Casey and serial entrepreneurs David Kalt, Peter Kadens, and Trunk Club Inc. co-founder and CFO Kevin Price.
Kalt, a founder and CEO of Reverb and OptionsXpress Holdings Inc., and Kadens, chairman of the nonprofit Kadens Family Foundation and a founder and chairman of commercial cleaning startup Azenity Labs, are also investors in New Era along with Price, Alumni Ventures Group LLC, and Motivate Venture Capital.
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