Field Notes from Across the Pond: A Kira Systems tale

Inaugural columns tend to be filled with loads of words where the writer waxes on about what she or he hopes to write about in the column – without actually saying much of anything at all.

I’m not going to do that.

I’m going to give you a personal story of one Canada’s legal tech darlings, Kira Systems. There are few things in life more invigorating or exciting then being among the first to make a new discovery. The way I felt when I discovered U2 or Bryan Adams playing tiny obscure venues is the way I feel about Kira Systems.

I remember getting an email from Noah Waisberg several years ago, asking if he could show me some new technology that he and a colleague (Alexander Hudek) were working on. He claimed that his software could read leases and produce an abstract of important clauses – in seconds. As a real estate lawyer, I was intrigued by anything that would take that kind of drudgery out of my life.

We met in a small, crowded coffee shop in the dead of winter. People wandered by, bumping into us with their bulky coats or knapsacks. Noah balanced his laptop on his knees while I leaned in close to watch. The software was still a bit glitchy at the time, but I could clearly see the promise. And just as I didn’t understand why U2 and Bryan Adams weren’t instantly famous, I couldn’t understand why law firms were not falling over themselves to buy this product.

Fast forward four years, and Kira Systems seems to be constantly winning clients and awards for uncovering information in unstructured contracts/documents for due diligence, general commercial, corporate organisation, real estate and compliance assignments. And the more inventive clients are using Kira for knowledge management, contract search, analytics, and other tasks where visibility into contract provisions is critical.

A growing list of UK and Irish law firms, including multiple Magic Circle firms, has required Kira to add UK personnel. Meanwhile in the United States, Deloitte and others have signed on as clients. Unlike that cold winter day in the coffee shop, Canada’s Seven Sisters law firms have finally taken note and inked deals with Kira. And Noah still takes my phone calls.

Two things fascinate me about Kira.

First, it runs off revenue. There was no rush to obtain venture capital and there seems, at least at this point in time, little appetite for going public. An important lesson for legal tech start-ups who seem to be overly-obsessed with obtaining outside investment and giving up control.

Second, is that Kira’s five year, “overnight” success is counter-intuitive. The seemingly obvious market for Kira’s legal technology was law firms. However, this obvious consumer was less than lukewarm about software could reduce the amount of billable hours on a file. Law firms also could not get their heads around the fact that a machine could be faster and more accurate than a junior lawyer – despite their use of Excel and calculators on a daily basis. The surge in Kira’s success came when corporations began insisting that their law firms use Kira as part of an assignment.

A prime takeaway for legal tech entrepreneurs is that the legal market is not naturally predisposed to look for, or accept, new products. And while “innovation” is on every law firm’s website and in each of their press releases, the reality is starkly different. There will never be that, Apple or Facebook moment in legal tech. It will always be a slow, progressive uptake, driven mostly by client demands or behaviour – and perhaps a small handful of forward-thinking lawyers within the firms themselves.

I live and work in Canada’s legal technology capital, Toronto, and each future column will give readers a Canadian perspective on legal tech from this side of the pond. I hope you’ll continue to join me.

Mitchell Kowalski is the Gowling WLG Visiting Professor in Legal Innovation at the University of Calgary Law School, the Legal Innovation Columnist The National Post, and the Principal Consultant at Cross Pollen Advisory where he advises in-house legal departments and law firms on the redesign of legal service delivery. He is also the author of the critically-acclaimed book, Avoiding Extinction: Reimagining Legal Services for the 21st Century. His new book, The Great Legal Reformation: Notes from the Field will be published in early 2017.  Follow him on Twitter @mekowalski or visit his website