First off, can you introduce yourself and let folks know how you got into legaltech? I am a practicing lawyer in Baja California, Mexico,...
#LegalTechLives With Ozzy Gdalevitch, Director of Tech&Law Israel
First off, can you introduce yourself and Tech&Law Israel?
I am currently the director of Tech&Law Israel. Prior to that, I was a corporate lawyer in a large Canadian law firm. I have been passionate about legaltech and legal innovation ever since I participated in LawWithoutWalls while in law school.
Tech&Law Israel is the first legaltech community in Israel, and we bring together different players interested in legal innovation. Tech&Law realized that for the local legaltech scene to flourish, we needed to develop a community that brings together both lawyers and entrepreneurs. So we started hosting the first legaltech events in Israel. Tech&Law’s latest event drew more than 400 participants and more than 15 tech companies that showcased their solutions. Tech&Law also helps and consults Israeli legaltech startups and companies with product development, market entry strategies, collaborations, etc., and assists foreign legaltech companies in entering the Israeli market. Our vast experience and profound knowledge of the local market allows us to be an effective mediator between the technological and legal worlds.
Tech&Law Israel is an initiative by Robus, the leading strategic consulting company that provides business development services to Israeli law firms. Israeli law firms still struggle to adopt and implement legaltech solutions on their own. Therefore, Tech&Law Israel guides law firms through this process and finds the right legaltech solutions to meet their needs. We have also been successful in advising in-house legal teams on which legaltech solutions to implement.
It’s no secret that startups and Israel go hand in hand—why do you think that is?
There are several unique factors that have been a key component of Israel’s success as a startup nation. I highly recommend reading Start-up Nation: The Story of Israel’s Economic Miracle by Dan Senor and Saul Singer for an in-depth analysis on how Israel has gained this reputation.
One is compulsory military service. Most Israeli men aged 18 and over spend up to three years in the defence forces, while women serve two years. Rather than seeing this as a burden, many Israelis credit military service as a driving force behind the country’s high-tech success. Many tech specialists have come through the ranks of military intelligence units, including the famed cyber unit 8200. People who have been in the Israeli military view it as a rather entrepreneurial experience, even though in the rest of the world people don’t think of the military as a place that encourages original thinking.
Immigration is another important factor. Most Israelis are born to immigrant parents (or grandparents) or have immigrated to Israel themselves. By definition, immigrants are risk takers who have left familiar surroundings for a better life. Therefore, a nation of immigrants is a nation of entrepreneurs.
We also can’t forget to mention Israeli chutzpah—being blunt and straightforward. In Israel, you can walk down the street, see the CEO of a large corporation and approach them and say, ‘Hey, I have a company, can we sit together and talk?’ And many times they’ll say, ‘Let’s talk’, because if you don’t know this person you know someone who does. In countries like China or India, where the social hierarchies are very clear, acting in such a way would be embarrassing, but in Israel there are no boundaries. This chutzpah also means that Israelis don’t see failure as a big deal. You can fail at three startups, but when you pitch to investors for your fourth, you can advertise your experience with multiple startups as an advantage. I’ll leave you with a slide from Intel’s Working with Israelis guidebook on how to deal with Israeli Chutzpah. 😊
Why do you think there has been this rise of legaltech in Israel in particular? Is the legal community more open to tech generally, or is it out of competition? Something I’m not thinking of?
Israel has the highest number of lawyers-per-capita in the world—ahead of the U.S., Canada and Germany—with almost 600 lawyers per 100,000 people. Although the Israeli legal market is very competitive and law firms are constantly looking for ways to improve their service offerings, many law firms in Israel have yet to embrace the latest wave of legaltech. Most of the law firms still use simple, low-tech solutions such as Microsoft Word extensions and anachronistic practice management software. There are several reasons for this.
Israeli law firms are now willing to accept certain aspects of innovative technology in their offices. Partners’ forums in the country’s biggest law firms are being presented with the benefits of empowering their practice using technology, and many partners are now on board after learning about how legaltech is transforming legal practice worldwide. But despite rising demand, adoption of legaltech solutions by Israeli law firms has been slow. It is still a struggle for most firms to adopt and implement legaltech solutions. Each law firm on its own does not have the ability to look for relevant legaltech solutions abroad, nor to reach out to companies and convince them to customize their products for the Israeli market and the needs of individual law firms. This requires a level of effort and resources that Israeli law firms are not willing or able to invest.
Another issue facing law firms interested in legaltech is the cost of adoption and implementation. Israeli law firms charge much lower fees than their European or American counterparts. This leaves less room for expensive investment projects such as the adoption of legaltech solutions.
Fortunately, these are difficulties that the Israeli legal market can overcome. More and more law firms are now realizing that in order to work more efficiently and to meet clients’ constantly increasing expectations, they will need to harness legal technologies in their daily operations. In a fierce market like the Israeli legal sector, lawyers have to find ways to stay competitive, and new technology is one way to do so.
Moreover, a younger generation of lawyers who are more attuned to technology is entering the workforce. In fact, there are more and more tech-enthusiastic lawyers who are demanding tech solutions that will make their practice better and their working lives easier. Some of these young lawyers are even quitting legal practice to become legaltech entrepreneurs.
As discussed above, Israelis, and by extension Israeli lawyers, are typically less risk-averse than other cultures and are straightforward, informal and aggressive. Therefore, when younger lawyers express unhappiness with the way law is practiced and demand increased use of legaltech, they make their opinions heard and either affect change within their law firms, start their own innovative practice or become legaltech entrepreneurs.
Most Israeli law firms, while motivated to start using legaltech products, have no legaltech experience whatsoever. Combine that with the fact that there is a real struggle to find the right products for them from abroad, and it is easy to understand why Israel, “The Startup Nation,” has not seen a significant technological boost in its legal sector.
What are some of the most well-known legaltech startups that have come out of Israel or have roots in Israel? Off the top of my head, LawGeex seems to be the biggest player, but who else would folks recognize?
Indeed, the Israeli legaltech sector’s poster child is LawGeex. LawGeex offers a machine-learning and AI-based product for contract review. In a study published in February 2018 where 20 experienced US-trained lawyers were pitted against the LawGeex AI algorithm, the AI achieved an accuracy level of 94 percent, compared to an average accuracy level of 85 percent across the 20 human lawyers. We were very happy for them when they received an additional $12 million in funding last month (April 2018). There are several other legaltech startups based in Israel. Surprisingly, a growing number of them are targeting the local legal market as opposed to the larger U.S. and U.K. markets. A list of all active Israeli legaltech startups can be found in our Database of Israeli Legal Tech Companies on Tech&Law Israel’s website.
It sounds like there are some really exciting things happening in Israel! What are some up-and-coming legaltech startups we should know about? What do they do?
We have seen quite a few new startups related to small claims. Platforms like Mishpat BeClick (Judgment in a click) and SueApp help individuals prepare and file small claims and other relatively straightforward claims directly to the courts online.
I recently met with an Israeli company called Legal Automation that has developed a platform that uses OCR and AI to automatically create court documents and related materials in the insurance and tort litigation space. You upload all the documents related to a claim (medical reports, insurances files, police reports, etc.) and the software will read through it all and prepare the necessary documents. They are currently in a pilot phase with a few Israeli law firms as well as in-house legal departments at insurance companies.
We chatted about this when we connected recently in Miami: how do you see Israeli companies dealing with scaling their products into English if they primarily operate in Hebrew? This is an issue many legaltech outfits face when building in other markets and thinking about scaling into the U.S., Canada, the U.K., Australia or other English-speaking markets. What’s your take?
Language tends to be a big factor in legaltech products, especially those that involve AI and machine learning. Although some of the larger Israeli law firms work in English when it comes to contracts and corporate work, most of the Israeli legal sector operates in Hebrew. Therefore, many Israeli companies are not willing to invest resources in developing legaltech solutions in Hebrew, a language that is only used by approximately 56,000 lawyers. This is also why the vast majority of international legaltech companies do not operate in Israel or target Israeli clients—the legal market is relatively small. Israel is the first in the world in terms of lawyers-per-capita ratio, but in absolute numbers it still has less than half the number of lawyers in the U.K., for instance. Israeli legaltech companies often aim for markets abroad, but we are seeing more startups using Israel as a sandbox for testing their solutions in Hebrew before translating them into English for the global market.
What’s happening with Tech&Law these days? Where do you see things going?
We’re busier than ever! A few months ago, we organized Israel’s first legal hackathon, as part of the Global Legal Hackathon, with over 80 participants. We’re also planning our 3rd annual Israel Legaltech Conference in the fall, which will attract over 300 lawyers, legaltech companies, VCs, regulators and more. We’re constantly meeting with an increasing number of Israeli legaltech startups that are seeking our help in getting their product to market and connecting them with the relevant legal players.
One of our main goals at Tech&Law is to increase awareness of legaltech in the Israeli market. We are really pleased that in the past few months, there has been increased media attention and interest in the legaltech sector. In the March edition of the Israel Bar Association’s magazine, there was a special feature on legaltech where we laid out some basic terminology and the latest trends. The two largest Israeli business newspapers also covered some of our recent activities and provided information about legaltech to the business sector at large. As the Israeli ambassadors to the European Legaltech Association (ELTA), we are also organizing regional initiatives to help promote legaltech.
We’ve seen some success in helping Israeli law firms and in-house counsel choose the right legaltech solutions and adopt them; but there is still lots of room for improvement! We hope to convince additional Israeli law firms and GCs to adopt some of the innovative and interesting legaltech solutions in the market today.
Who are some folks and companies within the legaltech scene in Israel folks should follow on social media to keep up-to-date? Of course, aside from Tech&Law!
There aren’t too many legaltech folks in Israel on social media (we’re trying to change that!) and many of them post only in Hebrew. Of course there’s LawGeex (Twitter, Facebook, LinkedIn). You can also follow Tech&Law’s founder, Zohar Fisher (Twitter) and myself (Twitter)!
Also, you can stay up-to-date with the Israeli legaltech companies database on our website.
Although not strictly within the legaltech space, we recommend following these accounts to stay up-to-date with tech and innovation in Israel:
- Israel Innovation Authority (Facebook, LinkedIn)
- Israel Tech News (Twitter)
- Nocamels (website)
- Startup Nation Central (website)
We ask everyone the same final question, and we’ve heard all sorts of fun answers. What non-work related invention would you like to have right now?
A laundry folding machine—I can’t believe there hasn’t been any progress when it comes to laundry since washing machines were first invented in the early 20th century! Maybe this problem can also be solved by AI and Blockchain….😉
CEO & Co-Founder of ROSS Intelligence. International speaker on the subjects of AI, legal technology, & entrepreneurship and has been featured in publications such as The New York Times, BBC, Wired, Bloomberg, Fortune, Inc., Forbes, TechCrunch, the Washington Post, and the Financial Times.
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