Legal Analytics is fundamentally changing the way in which lawyers litigate their cases. It combines data and software to provide lawyers with a winning edge by creating datasets never before available about judges, lawyers, parties, and the subjects of lawsuits, out of millions of pages of litigation information. With the objective of effectively using data, Karl founded Lex Machina which provides Legal Analytics to companies and law firms, enabling them to craft successful strategies, win cases, and close business. With this data, for the first time, lawyers can predict the behaviors and outcomes that different legal strategies will produce.
Based in Silicon Valley, Lex Machina emerged from Stanford’s Law School and Computer Science department. In 2015, the company was acquired by LexisNexis, a leading information provider and pioneer in legal content and technology. Today, almost 80% of the AmLaw 100 – the hundred largest law firms in the world, use Lex Machina. The company’s corporate customers include global leaders such as Abbott, Allstate, Baxter, Facebook, GM, Microsoft, Nike, Walmart, and many others.
As CEO, Karl leads strategy and operations at Lex Machina. Previously, Karl led all product development, product strategy, and engineering efforts at Lex Machina as CTO and Vice President of Products through Lex Machina’s successful acquisition by LexisNexis. As CTO Karl played a critical role in developing Lex Machina’s award-winning Legal Analytics® platform, expanding it from its initial focus on patent litigation to covering 14 federal practice areas.
Prior to Lex Machina, Karl worked as a Fellow at XSeed Capital Management, a seed stage venture firm and Lex Machina’s lead investor. He also served as Vice President of Product Management and as Vice President of Engineering for Flurry, Inc., the provider of the largest mobile analytics and monetization platform, where he was a member of the founding team before Flurry was acquired by Yahoo. Prior to Flurry, Karl spent five years building sonar systems for Applied Research Laboratories of the University of Texas at Austin.
Karl holds a J.D. from Stanford Law School, and while in law school worked in Fish & Richardson’s patent litigation and prosecution groups. Karl also holds an M.S. in Computer Sciences from the University of Texas at Austin and an A.B. in Computer Science from Dartmouth College.
Turning Legal Data into Strategic Insights
Lex Machina captures data by crawling legal data sources, such as PACER, the ITC’s EDIS, the USPTO, and state court data, every 24 hours. Lex Machina then cleans, codes, and tags this messy and unstructured legal data using its proprietary Natural Language Processing and Machine Learning algorithms.
For every case, Lex Machina’s platform extracts the players involved, including the attorneys, law firms, parties, and judges. It identifies asserted properties (such as patents), findings, and outcomes, including any damages awarded. The company also builds a detailed timeline linking all the briefs, motions, orders, opinions, and other filings for every case. Lex Machina then delivers legal analytic insights to its users through its web application.
The company’s customers use Legal Analytics to win in the highly competitive business and practice of law. Law firm attorneys and their staff use Lex Machina to win lawsuits and to land new clients. Corporate counsel uses Lex Machina to select and manage outside counsel and set litigation strategy and tactics.
Doing the Right Thing
Karl’s favorite leadership quote is by Peter Drucker: “Management is doing things right; leadership is doing the right things.”
Both entrepreneurial journeys that he has been part of have involved a strategic pivot to some degree. At his previous startup company, Flurry, they pivoted from being one of the very first direct-to-consumer providers of mobile applications to building the leading mobile analytics and monetization platform. This pivot led to the company’s successful acquisition by Yahoo! At Lex Machina, it was the company’s critical early strategic decision to take the platform beyond Intellectual Property litigation and bring Legal Analytics to all areas of the law. This mission continues today after its successful acquisition by LexisNexis.
“The key takeaway for me from both journeys is that it doesn’t matter how good you get at doing something unless you’re doing the right thing. Leaders need to be looking forward at all times to make sure that what their companies are doing today aligns with a leader’s vision for the future,” said Karl.
Leveraging AI to Drive Data-Driven Decisions
Karl feels lawyers traditionally are not drawn to math, statistics and numbers. AI has made it possible, that an entire profession, as conservative as the law, is changing the way they work. In the past, top lawyers would act on anecdata – stories they collected over their years of experience. Now, the same top lawyers are getting used to making data-driven decisions, which enables them to achieve better outcomes for their clients, but also for their own firm or department.
Further, Karl commented, “In the past, an army of paralegals would take days and weeks to research a new matter, by addressing questions like these: How long will it take to go to trial before this judge? How serious is the other law firm? What has been the performance of the opposing counsel in similar cases? When is a good time to make a settlement offer? How likely is it that the other party will accept it? What amount can we charge as an alternative to hourly fees? Now, lawyers and their clients can answer these and many other critical questions in just minutes, with a high level of confidence.”
Products Backed by Deep Industry Expertise
Talking about Innovation, Karl believes, “Our innovation is spurred by our close connection with our customers.” The company has been able to create a number of superfans of its products, who gladly share how they use its product, and what other capabilities would be useful to them. They roll out three to five new modules every year, and every launch is preceded by extensive consultation with lawyers, who are expert in that respective area.
One of the biggest challenges Lex Machina faced in the early days was that existing AI tools did not solve the problems it needed to solve. As a result, it came up with a custom Natural Language Processing platform to deal with the legal data that is at the core of Lex Machina.
“We spent nearly seven years perfecting this platform, during which we focused almost exclusively on patent litigation. With the platform complete, in the last 2 years we’ve been able to expand Lex Machina’s coverage to over 10x the number of cases and 14 total practice areas,” asserted Karl.
Being an Inspiration
When asked upon the most important attribute a leader should possess, Karl said, it is the ability to inspire others to follow. “Whether those “others” be customers, team members, investors, or board members, translating vision into a reality that inspires others is imperative because no leader go it alone.”
Further he advices emerging business leaders to “Think big and make mistakes through action rather than inaction!”
The Path Ahead
Commenting on the future, Karl emphasized, “Lex Machina’s mission is to bring Legal Analytics to all areas of the law. We will continue to drive innovation to empower lawyers to achieve the best outcomes for their clients and AI will play a critical role.”
A lot of changes are underway, from self-driving cars to intelligent healthcare applications. These are well covered by the media, although AI is still in its early phase. But clearly, there are many applications of AI that already touch the daily lives of people in most areas of the world, whether it’s smart cellphone technology, improved environmental technologies, robocalls, and more.