Dentons announced today that it has launched a Silicon Valley legal tech “accelerator” that aims to transform the practice of law.
Called NextLaw Labs, it is based in Palo Alto and will begin unveiling a suite of technological products in the coming weeks.
NextLaw Labs is autonomous but wholly owned by Dentons. While other law firms have internal R & D departments, external partnerships with tech companies and even external consulting companies, NextLaw is describing itself as the first external R&D company owned by a law firm – a legal structure that will allow it to raise money through capital markets if necessary.
“I guarantee you that there’s going to be other examples of law firms trying to” replicate this model, said Bill Henderson, a member of the advisory board and a professor at Indiana University’s Maurer School of Law.
Henderson, who studies legal tech and the business of law, said having a separate entity allows the firm to invest in technology while in compliance with rules against fee splitting profits with non-lawyers.
“The story begins inside Dentons,” NextLaw CEO Dan Jansen told Big Law Business. “Their strategy is to grow, integrate and reinvent … I’m the reinvent part.”
Jansen, a serial entrepreneur formerly with the Boston Consulting Group, is not a lawyer and said he has no legal background.
He’s serving his last term as mayor of Telluride, the chic resort town in Colorado where he said he met Dentons’ global chair Joe Andrew, who also maintains a house there.
Jansen pointed to his consulting background and disruptive tech investments as relevant experience. In 2013, he sold a company that created an online advertising model for virtual worlds, social networks and casual games. (He said a non-disclosure agreement connected to the sale prohibits him from disclosing more details.)
He and Andrew agreed that the legal industry is ripe for disruption, and Dentons agreed to back NextLaw to accelerate three types of technology products: those co-developed for the firm’s clients; those developed for the firm’s lawyers and existing technology that needs investment.
“We’re going to have the largest law firm in the world to not only generate ideas, but also to test them,” said Jansen.
He said there would be several big announcements in coming weeks, including one about an app co-developed with a Dentons’ client that will help the client manage risk by collecting information from field staff’s mobile devices. NextLaw also has a partnership planned with a major technology company, Jansen said.
“We want to have them all lined up first, before we announce anything,” he said. “I wanted to have a real flow of, frankly stories, in the pipeline.”
Dan Martin Katz, an associate professor of law at Michigan State University who writes about legal tech, is also on the advisory board, and said NextLaw holds a competitive advantage because it can test products in the vast Dentons’ ecosystem: it is the largest law firm with more than 6,000 lawyers including more than 1,000 in the U.S.
Dentons partners who have an idea for a tech product will have “an R&D arm available to vet their idea and try and bring the product to market.”
The key will be picking products that have appropriate buy-in from Dentons’ partners, he said.
Said Jansen: “I can go to a Dentons practice area leader and say, ‘Hey, you should try this new product, and, by the way, you own it. We think it’s appealing and so far it has been.”
He declined to disclose the size of Dentons investment in NextLaw, but said the firm has been “generous” with its office space, communications and IT professionals. NextLaw is currently looking to hire project managers and investment professionals who can oversee its portfolio. Jansen said there may also be space for potential investment companies in Telluride, Colorado.
“The market has talked about Big Law and New Law, but we want to be Next Law,” Dentons’ Global Chairman Joe Andrew said in a press release.