Shanti Atkins was warned that her career could crater when she left labor and employment firm Littler Mendelson in 2000 for a spinoff that became NAVEX Global, a software company and major provider of internal whistleblower hotlines and compliance training.

“A boss told me I was committing career suicide,” said Atkins. “At that time, a law degree meant the nice house, driving a BMW and a comfortable life.”

Atkins took a chance, and a significant pay cut, but she had faith in the venture.

“I knew I didn’t want to practice law, and I was excited to help build products for e-learning in areas like sexual harassment training,” she said. Atkins left the company in 2018 after becoming its global executive chair and seeing it grow into an industry leader.

Atkins’ decision to stray from the beaten path of legal practice for a tech-driven legal venture was unusual at the time, but it’s become increasingly common. More lawyers are opting for legal tech entrepreneurship as these companies become a force upending the conventional law firm world.

Investors are pouring cash into areas like e-discovery, electronic legal research, and legal AI at rapid rate. According to a Bloomberg Law analysis, legal tech funding in the first quarter of 2019 alone exceeded $400 million.

Finding Solutions

To create successful legal tech startups, attorneys may have to put aside at least one “lawyerly” trait.

“Lawyers are trained to be risk averse. That is death knell for most businesses so that’s one aspect you have to be ready to leave behind,"Atkins said.

Joseph Tiano, who had been a corporate transactions lawyer in Big Law firms, including as a partner at law firm Pillsbury, embraced risk when he left the law in 2014.

“The main thing about practicing law that was unappealing was the repetition over already charted territory,” he said.

In his legal practice, where he represented tech companies, he realized clients had only limited ability to gauge how much they would need to spend on a complex legal matter.

“Clients were seeing legal spend as a big black hole,” Tiano said. “And lawyers didn’t have a good handle on pricing. When clients asked the price for a merger and acquisitions deal, it could range from $400,000 to $900,000, for example.”

He co-founded Legal Decoder, which uses software to analyze legal spending data and allows law firms and clients to determine the best pricing. Law firms have a tool to help them estimate costs for various legal matters like a merger, and clients have an analytical tool to review invoices and legal work.

“We use data to make sure legal services are more predictable and efficient,” Tiano said. “We’re in a time of transformation of the legal industry and pricing counts.”

Hard Work and Sacrifice

Some new lawyers are bypassing law practice altogether. After he graduated from Harvard Law School in 2013, Jonathan Razi, for example, founded a fintech startup.

Razi said he now collects “a salary far greater than what I’d be earning as a Big Law firm associate.”

But, he added, “there was significant sacrifice along the way. In the early days I used to pay vendors and make payroll out of my own pocket.”

Lawyers who want to branch away from legal practice sometimes take the route of law firm spinoffs. Like Atkins, Lori Brown, also formerly with Littler Mendelson, made this move.

“I had been in the trenches for a couple of decades and I decided I wanted to see things from an operational perspective,” said Brown, who practiced law from 1990 to 2011. She left Littler for a stint as chief legal officer for a large security company.

In 2015 she became CEO of Compliance HR, a joint venture that combines Littler’s employment law expertise with technology to provide client solutions in such areas as worker classification and wage and hour questions.

She said she took the leap because “I wanted to blend some of many things I learned practicing law in an area that was starved for tools to help companies make the right decisions.”

Scott A. Forman, a Littler shareholder who founded case management platform CaseSmart, said though he’s remained with the firm, CaseSmart has provided a new career path for others.

“The old view is that you come in on the partnership track or you’re not employed, but now there are career options,” he said. “Some of our 100 attorneys at CaseSmart have come from our shareholders. It’s been a balanced split with attorneys we hire from outside.”

Atkins exited the law early, knowing traditional practice wasn’t for her. But she still sees those early career experiences as important.

“A law degree was an excellent preparation for logical thinking, organizing and advocacy— and those are critical skills when dealing with investors,” she noted. “Plus, no one is going to outwork a lawyer.”