YC-Backed Casetext Takes a New Angle on Value Added Legal Research With Wikipedia-Style User Annotations

Why do law firms spend, collectively, billions of dollars on commercial legal research databases, when what they are looking up is law — which is in the public domain? How are these databases able to erect these enormously profitable paywalls? The answer is that they provide more than just the raw text of the law. They provide search tools and additional, value-added content on top of the law itself. The two legal research titans, Lexis and Westlaw, employ lawyers to read cases and other legal materials, categorize them, add commentary, and link them together. These services have legitimate value because they all save lawyers time, and time is money — especially in a profession that largely bills its clients in six-minute increments. That’s why these expensive tools exist, even in the Internet age. As one lawyer put it, after trying to get by on only free legal research tools, he tried Westlaw and was an immediate convert who now happily pays for the service.

Two young lawyers thinks they can disrupt the legal research giants by applying the lessons of Wikipedia and crowdsourcing their own comparable set of annotated law.

Joanna Huey attended Harvard Law School, where she was president of the Harvard Law Review, and Jacob Heller attended Stanford Law School, where he was president of the Stanford Law Review. They later served together as clerks for Judge Michael Boudin at the U.S. Court of Appeals for the First Circuit in Boston, and worked at law firms. Both were dissatisfied with the available research tools and their hefty price tags, which put the poor at a competitive disadvantage in the justice system.

Unlike many lawyers, neither Huey nor Heller are afraid of technology, so they decided to do something about it. Huey’s undergraduate degree is in physics, and Heller was a web developer before law school. They applied to Y Combinator, and were accepted. They’re now emerging from the program and ready to launch their company: Casetext.

The key idea behind Casetext is that the annotations that drive Lexis and Westlaw’s bottom lines can be crowdsourced. One obvious parallel is Wikipedia, with its hundred million man-hours of user contributed content, but Huey and Heller also point to Quora for its high quality answers by professionals and experts in various fields.

I asked Casetext’s founders why they thought they would be able to attract users to contribute. There are several aspects to their strategy. First, they focused on making contributing extra easy by concentrating heavily on UX. Users can very easily add tags to a case, or, more valuably, to paragraphs within a case. It’s also easy to link to other resources, including other cases or even outside materials like law review articles, which are the legal equivalent of scientific journal articles. Second, they’re hoping users will see some benefits in contributing content. Like Quora, users sign up with their real names, which incentivizes good behavior and means quality contributions can lead to real world reputational effects. Some early users — who the founders brought onboard by plain old hustling and tapping their networks — include well known law professors and lawyers. For example, Alexander Reinert, a law professor at Cardozo Law School, annotated Iqbal v. Ashcroft, a case he argued at the Supreme Court.

Screenshot of Casetext homepage

The core of Casetext – access to over a million cases, users’ annotations, and the ability to annotate – is free. So how will Casetext make money? Premium features. They’ve done some thinking and built features I haven’t seen in legal research before, like applying a heat map to show which parts of a case are most cited. (Ravel Law is another legal research startup that’s also innovating in search and display.) Even more basic planned premium features have value because the incumbent giants have simply missed them.

The one thing I could see holding Casetext back is its database, which is currently limited to the US Supreme Court, federal appellate courts, some federal District Court decisions, and Delaware. This is acceptable for some practice areas (such as patent litigation, which is exclusively in federal courts), but the great majority of lawyers practice in state courts, or at least have to deal with state law issues. The founders tell me California and New York are next, which makes sense because they’re the biggest legal markets, and more will follow.