Allen & Overy Fuse – an update

Allen & Overy’s tech innovation space Fuse has to date generated a significant amount of interest quite rightly, because it is in the only law firm we know of so far to create this kind of sizeable tech incubator within its own City walls.
In October we looked around Fuse and chatted to the current startup and not-so-startup occupants, as well as chairman Jonathan Brayne and Fuse head Shruti Ajitsaria, who unbeknown to many can be credited with getting the idea off the ground.
Fuse was, according to Brayne, a “recognition that we need to become plugged in to what technology is out there, what it can do and how it can impact our world and the world of our clients.” Technology will, he said, “perhaps profoundly affect the needs our clients have of us.”
Fuse came about after Ajitsaria, an A&O derivatives lawyer since 2002 who did a bit of angel investing on the side, was approached by a platform-based derivatives startup that said traditional law firm derivative practices have got it all wrong. “I came into work after that and carried on in the same way,” Ajitsaria said. “Fuse is about connecting lawyers with best in class technology and empowering them to do what makes sense for them.”
With a focus on exploring legal, regulatory and deal technology, earlier this year Fuse selected eight occupants from 84 applicants, with each appointed an A&O partner sponsor.
The eight span and are supposed to reflect the different A&O practice areas and are at different stages of development. Startups sit in an open plan area opposite A&O’s innovation team, who sit behind glass in order to satisfy confidentiality rules and regulations.
Speaking to the startups, the key benefits they’ve gained so far from Fuse are unfettered partner input and client access. Clients that have previously been hard to get hold of have reportedly been enthused to visit Fuse and discuss with the startups directly how their technology can help resolve problems.
At Opus 2 International, which is best known for its tech-enabled litigation solutions and paperless trials, the company is moving into the corporate space and A&O is helping to develop its transactional capability. Opus associate Josh Kirk said: “We’ve been able to short cut the development process and get straight to the pain points.”
RAVN Systems (now iManage) is looking to achieve more use cases in order to help productise its currently often bespoke offering. A&O this year signed up to iManage document management system and was already using RAVN’s software.
And at intelligent deal platform Legatics, A&O used the software before signing up Legatics and continues to use it. A&O has had input into the latest version.
Addressing the eternal dilemma over embracing technology that may cannibalise your own revenue stream, Brayne said: “If they’re going eat our lunch that will happen anyway: we aren’t going to wait until we wake up and our arm has been chewed off.”
While there is no assumption that A&O will take equity in the startups, it has done so in Nivaura, which automates and provides an end-to-end platform for issuing securities.
Here is Phil Smith, debt capital markets partner and the sponsor for Nivaura, with more on that investment.
What is the primary reason behind A&O’s investment in Nivaura?
We really want to be at the forefront of developments in this area. What Nivaura’s doing marries well with what we’ve been looking at for a long time; that is, improving efficiencies around securities issuance. Nivaura’s solution has the potential to be very important to our clients. We hope that will also ultimately result in revenue and profit for A&O.
Will the investment have any impact on Nivaura’s dealings with other firms?
We’ve said from the beginning that our relationship with tech companies in Fuse is not exclusive. They are free to work with whomever they choose outside Fuse. But there may be situations where we see a closer relationship if the level of input needed from us is significant.
Does the investment come from a dedicated R&D fund? Are you able to give an insight into the process you followed to reach agreement on investment?
No it doesn’t. The investment process was similar to that of other strategic financial decisions we have made as a firm, all of which require approval from our Board.
Are you looking at investing in other Fuse startups? Or other startups generally?
We won’t invest as a matter of course but it’s fair to say that we’re always open to the idea.
This article first appeared in the October Orange Rag. For your free copy sign up here: