Libryo interview: fight that regulatory complexity!
Last week we chatted with Nextlaw Labs to find out how the European LawTech scene looks to investors. This week we caught up with one of Nextlaw’s latest investments, Libryo, to take the startup temperature from the other side of the pitch. Garth Watson co-founded Libryo, which offers Software as a Service for regulatory law, in 2015.
LG: What was the problem you were trying to solve that led to Libryo?
Regulatory complexity and the need for time-consuming, expensive legal research. Nowadays simply knowing what the law requires of one is not available on demand. For multinationals, just knowing what one’s legal obligations are from operation to operation is difficult. Legislation and regulation are increasing and constantly changing from country to country, jurisdiction to jurisdiction, federal, state, local authorities, and so on. Because of prohibitive costs, both in private practice and in-house, and inevitable delays, compliance professionals often make do with uncertainty and inaccuracy. That leaves them frustrated and exposed.
Libryo is a software as a service (SaaS) that companies subscribe to so anyone can at any operation can know what the law requires of them, for any topic. The key to Libryo is its operation by operation configuration. Every unique operation has a Libryo, which is a configured set of the legal requirements which face that operation, depending on the jurisdiction and activity. Within that, it’s exceptionally user-friendly and is designed for non-lawyers to know what the law requires them to do at any moment. It’s about democratising legal compliance.
How did Nextlaw labs come into the picture, and how have they helped?
They’ve been fantastic – through Legal Geek we met Tom Wilson at Seedcamp, who, together with Nextlaw Labs, was conducting a callout to legal tech companies. 80-odd legal tech companies applied. We were selected to pitch, we did, and together Nextlaw and Seedcamp invested in Libryo and in Clause.io. Nextlaw Labs have a great support structure, based both in the US, and also in Europe. We’ve worked closely with them to focus on expanding Libryo’s offering internationally.
The value of Libryo to a company increases in relation to how complex their operations are and how many different legal jurisdictions they operate in. So our ability to service multinationals in as many jurisdictions as they need is key. We’re now able to offer global rollouts.
How do you think BigLaw is doing in its interactions with startups – what’s that culture like?
I haven’t had the privilege of chatting to a big enough sample of Big Law partners. But I have had some really enriching conversations with some. They’re excited about the potential of tech in the legal space. Although some lawyers are threatened by the rise in tech, many are also on the front foot to embrace new technologies.
Dentons as a firm are very innovative, and there are others like Allen and Overy, with Shruti Ajitsaria pioneering Fuse, and others with very exciting things going on internally, like what Alex Smith is doing at Reed Smith. The market’s at an interesting phase where you can’t deny legaltech anymore, and more and more lawyers are embracing it.
How does the funding environment differ in the different startup communities?
I think London and Europe have come a long way and have a long way to go. Many have said that insufficient access to decent early stage capital is the reason that few of the Googles, Facebooks, Amazons of this world have come out of Europe. It makes running a startup more difficult here than it is in Silicon Valley.
Not many VCs in London are truly seed in nature. However, Seedcamp and Nextlaw labs are truly seed thinkers, which focus on the quality of the idea, the large or growing market, the upside, and why the team is the right one to back.
Lots of so-called seed investors are looking for more of a due diligence-led round, focusing on mitigating downside and looking for metrics that would be typical more of a series-A size round. There are investors with too much of a private equity hat on. Having said that, Europe’s come a long way – we’re grateful to be based in London and there’s a significant startup ecosystem developing.
What excites you about new legal tech at the moment?
Legaltech has the potential to change how people and companies consume legal services very positively. I’m excited by the potential of legaltech to democratise legal services and make the practice of law more awesome with less boring robotic tasks done by humans. I think the winners will be those that make the most intelligent use of machine learning and natural language processing from a legal perspective, and those that can augment the job of lawyers and those that consume law / legal services, through applications with a great UX. Pure AI or machine learning companies without applications will not win out. I see AI being commoditised like electricity.
Companies need to fully appreciate the limits of machine learning and what it can’t do, and where the ball needs to be passed to a lawyer to run with. People always like to deal with people (as opposed to machines), and a lot of legal services are things that people like to consume from people. Companies that respect the human factor will succeed.