Austin Startup Lawful.ly Offers Open Source Legal Insight

By SUSAN LAHEY
Reporter with Silicon Hills News

Chris Murphy, cofounder of Lawful.ly

Chris Murphy, cofounder of Lawful.ly

Historically speaking, law is a tangled mess of arcane language wrapped around a maze of pitfalls and risk, and lawyers were the only ones who could safely wield it. But a new Austin startup wants to change that. Lawful.ly, founded by Chris Murphy and Bradley Clark, a couple of entrepreneurs who are both attorneys and IT guys, is a law crowdsource website. Users can get free legal documents as they can on other sites, but instead of just blank forms, the documents will be explained by commentary about what they mean and how to use them from lawyers and other experts.
“Having done my own startup a couple years ago, it’s amazing how much money I spent on the legal fees,” said Tony Frey, a product management and strategy executive who is advising the Lawful.ly team. “It’s easy to go find various resources, you can find these documents but if you’re not versed in legal issues you think ‘This sounded right to me.’ Then you go back to your legal advisors and they come unglued because they’re like: ‘You found this document? It’s a great document if you’re in California but you’re in Texas and you really screwed yourself with this.”
Murphy, started out in IT and then got his law degree, and now serves as an attorney at Dell. He doesn’t want to abolish lawyers but instead have them serve the function of counselors on complicated legal matters, not filling out forms.
“People who use contracts should be able to interpret them without having to go to a lawyer,” he said. “It should be understandable to you what is and isn’t allowed…. If you’re looking for auto mechanic advice you can go to a forum and find all sorts of great information. But it’s really hard to find that going on around legal advice. The other question is, ‘How much can I trust this advice?’ One thing we do differently is add that level of verification and trust. Explanations on documents will have been voted up, similar to Quora.”
Bradley Clark, co-founder of Lawful.ly

Bradley Clark, co-founder of Lawful.ly

Clark said he believed the legal profession was at a tipping point. The old guard protected the legal profession through language the deliberately obscured the meaning, so that only lawyers could interpret it. It was a kind of job security. Young people, he said, prefer more open source information. “There’s a distain among the younger generation of closed systems…. Wikipedia is a huge success; I think that’s exactly what this generation wants.”
The founders plan for the information on the site—including such documents as NDAs and series certifications of incorporation—to be free for the public. Business owners could use it. Lawyers, too. Murphy said that, as a corporate attorney, he’s familiar with corporate transactions but “I’m not a lot better than Joe-up-the-street at writing wills. Attorney’s tend to specialize.”
“When you go to law school they give you free access to Westlaw and Lexus, it’s like crack cocaine,” said Clark. But if you’re in private practice, those services cost a fortune. Last time they priced it, Lexus was about $2,000 a month.
The founders plan to monetize Lawful.ly through institutions like government agencies and law schools. Law schools, they said, give students access to expensive services like Lexus Nexus, but students could use even more.
Kyle Mitchell, a UT law student and open source coder who met Murphy through the site GitHub, is one of the beta users. As a law student, he said, he has access to all kinds of legal information through the library. “They give you a lot of information but it’s still rare and hard to find documents that explain themselves,” he said. With Lawful.ly, he said, it’s: “Here’s a form. Here are some comments that explain kinda sorta what these parts mean, what these words mean and not just the blanks for you to fill in. There are other services online that provide ‘Come and Take It’ legal services, Rocket Laywer, Legalzoom. They’re just providing forms with blanks to fill in and the ability to send them around and get them signed electronically.”
Lawful.ly is Murphy’s second company and he pitched at DEMO and applied with Tech Stars.
“When it comes to pitching I just tell him, make sure you don’t sound like a lawyer,” Frey said. “VCs are the farthest thing from a lawyer. They’re all seat-of-your-pants, all about what you feel. You’re going to want to make sure you have all your arguments lined up and they’re looking for your passion.”
“He’s making the transition very well. He’s articulate, comes across knowing what he’s talking about in this space and that’s paramount over everything. Legal scares everybody. Listening to Chris talk, he’s very even-toned…. Some of his success in the early beta is that he is good at connecting with people. People can grab onto that and make this community grow big, fast.”

Comments

  1. Really excited about what these guys are doing, particularly in Austin.

    With the cost of forming a startup dropping, many founders take the plunge and start building their company without any kind of legal budget. Look, I’m a startup lawyer and agree that it’s always better to hire a competent lawyer, but that’s sort of like saying it’s always better to have a car than not. Great if you can afford it, but we need to provide something for those who can’t. Too often those low-budget founders end up going to dirt-cheap, crappy legal providers who do more damage than good.

    Products like Lawful.ly (and others, like Docracy) are increasing the quality of DIY online resources so that those founders who are going it alone can at least keep things together and avoid a legal atomic bomb, while hopefully eventually raising some seed money to hire a (competent) attorney to clean things up.

  2. Thank you, Jose!

    As you know, having access to thousands of NDAs online, for example, won’t do anyone any good if the person using the NDA doesn’t understand (1) what’s in the agreement (and why), (2) what was left out of the agreement (and why), and (3) how the jurisdiction in which the agreement is to be used interprets or construes such agreements.

    Rather than having a database of thousands of NDAs and having to throw a dart and hope you hit the right one, we believe the crowd can build a better NDA by annotating the provisions in the agreement with definitions of key terms, explanations of key provisions, reasoning from relevant court decisions for particular jurisdictions [what I call the “legal annotations”], and perhaps most importantly, with annotations from business owners who have experiences in which to share with the community [what I call the “business annotations”]. We believe that by better understanding the employer’s or employee’s perspective on certain key terms or provisions (from their annotations) a better NDA can be built.

    Another great example comes from the commercial real estate world in which I primarily practice. Every lawyer has his or her own version of a buyer and seller Purchase and Sale Agreement (“PSA”). Over time, that lawyer’s agreements constantly evolve as new court decisions are handed down and better ways of writing are discovered. If a community of lawyers and CRE buyers and sellers collaborate on a PSA a better PSA can be built. Rather than having several versions of a PSA, one version which includes a buyer’s provision, a seller’s provision, and a typical negotiated provision would be included in a single PSA on Lawful.ly with annotations explaining why a buyer wants the buyer’s provision, why the seller wants the seller’s provision, and why the negotiated provision is a reasonable compromise. This benefits not only buyers and seller of CRE but lawyers practicing in CRE.

    We have so many great ideas with Lawful.ly and while the last 8 months have been very exiting, I am more exited about what lies ahead of us!

    Yours truly,
    Bradley
    @bradleybclark

  3. Kerry Koen says:

    You 2 are providing an awesome and very needed service. Many legal forms are very confusing, esp. if you don’t a law background. Just figuring which form you need can be challenging enough. Then trying to understand the 7 or 8 pages of instructions on how to complete the form is almost impossible without a Lawer/Legal terms to Layman’s terms dictionary. The instructions might as well be written in Greek.
    This is also esp. important for signing legal documents. A lot of people don’t even bother reading thru the often lengthy, very fine print lawyer speak paragraphs above their signature not knowing or fully understanding all of the details of the now legal contract they just agreed to..at This where Lawful.ly comes in. Who needs a Legal terms to Layman’s terms dictionary when you have Lawful.ly.
    BT;, the fact that I’m Chris’ little sister did not influence my comments/opinoins. He hasn’t been able to that since I was 3. 🙂 Best of Luck with Lawful.ly!

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