Legal Technologists: Create Impact with VMV
Seems like legal tech isn’t a niche anymore. Just last week, several companies in the space secured impressive funding rounds:
Our space is booming, with VCs eager to deploy fresh capital. But for legal tech founders, this rapid growth can feel disorienting. With so much happening, it’s easy to lose focus.
This piece is for those building the future of legal tech. I highly encourage you to navigate the evolving landscape through the lens of your vision, mission, and values (VMV) and to continually strengthen your impact on stakeholders.
But this advice raises a crucial question: "What if I don’t have a clear vision, mission, and values?" Defining your VMV is essential before launching any venture — especially in legal tech, given its deep societal impact. In this age of intelligence, anyone with a phone or laptop can build powerful applications that shape our most important systems.
But without a clear vision, focusing on surface-level metrics like efficiency or scale could unintentionally create a world we don’t want, or create a role we don’t want in it. So if you don’t yet have them, stop for a moment, and establish your VMV.
Putting these principles into practice, here are three key lessons from recent shifts in legal tech, viewed through Darrow’s VMV.
Key lessons from recent shifts in the legal tech industry
At Darrow, our vision is to create a world of frictionless justice. We believe in a world where humans trust the justice system to care for them even when they aren’t actively vigilant about their rights.
When people trust the system, economic growth and human prosperity endure despite chaos and change. When the system works, change flows unrestricted by limitations on human choice, and innovation thrives as a natural byproduct.
A justice system we can trust is also an effective solution for the problem referred to as AI Alignment: the challenge of ensuring that artificial intelligence systems act in ways that are aligned with human values, goals, and societal well-being.
We know many people are working towards this vision. We work with them. Some of them are legal tech startups that we helped along the way. Some of them are in adjacent fields. Some of them even work directly on parts of our mission, to build intelligence to discover, assess and address every legal violation.
Our goal is never to stop those working towards that vision, or to beat them. Our goal is always to take part in the ecosystem that realizes our vision. We know we can’t do it alone.
I hope legal tech founders take this lesson: don’t waste time worrying about competition. If you do, you likely haven’t fully grasped your VMV. A truly broad vision, an impactful mission, and values rooted in the essential human traits for achieving them will turn any competitor into a partner, helping you build the world you set out to create in the first place.
Now, this is especially true because the legal AI market is still in its very early stages, with the market heading to a $1 trillion valuation in coming years.
The plaintiff space & contingency fees
Only a few years ago, it was rare for top venture capital firms to get involved in plaintiff work. The market for legal startups seemed very focused on defense firms, and specifically on utilities that speed up production of legal work products. Many raised the “ambulance chasing” concern.
But the biggest hurdle was the restriction on fee-sharing with lawyers, a rule that prevents non-lawyers, including investors, from sharing in contingency fees from legal cases.
This seems to have changed.
Plaintiff-side work and contingency models are now legitimate investments for VCs. VCs seem more inclined to invest in startups serving plaintiff firms, like EvenUp and Eve, than they were in the past. And their concerns over contingency-based models coupling law firm revenues and startup cashflows also seem to be fading, as seen with Justpoint’s raise.
Underwriting legal claims at scale is a challenge everyone needs to address
Wide VC flows into the plaintiff market shows the level of rigor achieved in underwriting of legal claims by plaintiff lawyers and litigation funders. Both Darrow and Justpoint have heads of capital markets within the company.
The plaintiff space is built on contingency because the liquidity of this market is quite limited, and therefore we have litigation finance in the first place. While it’s easy to assess some of the more repetitive claims at the stage of inception, nuanced legal risks with complex features and early signs of risk before victims step up are still extremely hard to assess.
We learned this the hard way at Darrow, needing to provide accurate underwriting for class and mass actions before victims even knew they had a case. This was critical to us, as we serve plaintiff law firms and litigation funders, who have deep expertise in assessing legal claims early on. We built our underwriting platform by employing learnings from both plaintiff lawyers and litigation investors, and got the stamp of approval from some of the most prominent players in the industry.
Quantifying legal risk and opportunities early on is critical for people in both plaintiff and defense roles, as well as in house counsel. And with the growth in legal technology funding, our work is cut out for us.
Everyone is working on agents, but where will the data come from?
It seems like many startups are exploring agentic workflows for legal purposes. But many times, the data necessary to power these machines requires years of expert curation, and constantly evolves and changes. Connecting to real world data is a challenge for legal teams wherever they are. This is true for both internal firm data as well as open web data.
Darrow began as a platform for scanning the web at scale for specific legal use cases, helping legal teams generate business. Today, users simply describe new use cases to our model, instantly building intelligent data pipelines that uncover legal risks or opportunities.
What started as infrastructure for our own work now powers legal efforts beyond Darrow. This happens across the board: we track hundreds of thousands of product prices online; millions of signals of environmental pollution; hundreds of thousands of economic vehicles like pension plans and asset managers; tens of millions of adverse drug reactions and demographic data; and even process the network traffic of millions of websites and mobile applications.
With the rise of agent workflow startups, we see immense potential for them to leverage Darrow for acquiring the right data needed to drive value for their customers.
Staying true to your VMV is not only good for your bottom line, but for building a purposeful business
Legal tech’s rapid changes offer endless learning opportunities. But without a clear VMV, it’s easy to get lost chasing trends, reacting to competitors, or building tools without a clear purpose.
Your VMV should be your compass, helping you decide what to build, who to serve, and why it matters. It’s what turns competitors into collaborators and markets into ecosystems. Darrow’s VMV guides everything we do, from how we uncover legal violations, to how we partner with plaintiff firms, litigation funders, and other legal startups in our space. It’s why we work alongside other innovators, knowing that real change comes from building together.
As the legal AI market grows toward a $1 trillion opportunity, those who stay true to their VMV won’t just survive the shifts, but will shape them. The market may change, but your VMV is what ensures your impact endures.