I had the pleasure of talking to Mark Deuitch. Mark is an entrepreneur and the founder of two web-based startups, PeopleClaim and Rhubarb, both of which I asked him about in this interview. Mark is devoted to solving “societal issues that are not sufficiently resolved by the existing system.” Right now, that means fixing the legal system through crowdsourcing on the blockchain.
Tell me a little bit about your background. How did you get involved in the legal tech world?
I’m a recovering investment banker. I used to finance tech companies until I found the tech-geek side more interesting than the finance side. Law seemed like a great challenge for technological innovation--so we created an application to try to improve it.
The problem with law as we saw it was that the legal system has become too expensive and complex to serve its original purpose for smaller claims or less wealthy litigants. There’s also an obvious mismatch: the legal system is geared towards adjudication, while the reality is that most cases are resolved by negotiation. So we thought if we could create a negotiation-based process, it could save a lot of people the cost of gearing up for litigation only to negotiate a settlement after months of expense and acrimony.
An accessible and inclusive legal system is vital to any democracy--but by some estimates over 80% of Americans are effectively disenfranchised from civil justice because they cannot afford the time and money costs of court. In many cases they can’t even find representation unless their case can become part of a class, or be embellished to a higher potential payout. So, by providing an effective alternative for smaller claims, we felt we could help free up the courts and lawyers to focus on cases that require actual litigation while providing a more efficient alternative for the rest.
How would you define legal technology?
Technology is really anything that makes a process more efficient. A contemporary definition might be the application of digitization, blockchain, web, or AI processes to make legal processes more efficient. My preferred definition--or maybe it's better described as a goal--would be any application that increases access to justice, reduces the cost of dispute resolution, and/or makes the law simpler, faster, and cheaper. By that definition, there’s actually been very little technological advancement in 200 years, because most of what’s called legal tech has only served to increase profit margins at law firms or to reduce costs to courts, rather than to increase access to justice by reducing time and money costs to disputants. ADR and E-discovery might count. Decentralization has the potential to be a game-changer, though, since it both reduces costs and democratizes the process of rendering decisions.
What was the impetus behind starting PeopleClaim (and Rhubarb?)
I had a series of experiences that led me to want to try to fix the legal system via technology. One of those experiences was flying on 9/11 with a ticket purchased by a Saudi business partner. Ironically we were on our way to Lockheed Martin to help fund a new counter-terror technology. I ended up on the FBI’s 9/11 Persons of Interest list and the internet media reports made it sound like I was a suspect. That led me to want to create a mechanism where people could tell their side of any controversy on the internet. Another experience was getting a huge legal bill from a law firm in a case that we had won. I got nowhere disputing the bill, so I told the firm I’d put the bill on the internet and invite other law firms to opine on its fairness. They settled.
So, combining those two experiences, we created PeopleClaim as a public forum for the resolution of disputes with input from the public. The system worked well but was mediative only--feedback from some of our users led us to create Rhubarb, which is a blockchain application where we create very large scale public juries who vote on the blockchain to render consensus verdicts. Those verdicts can be used to either mediate or arbitrate disputes at zero cost to the parties, and usually within days rather than months or years for traditional arbitration or mediation. We also use a cryptocurrency--the RHU--to reward jurors for forming the consensus. This increases engagement through gamification and removes voting bias.
The most signification aspect of what we are trying to do is to try to change the economics of law. Rhubarb is a zero cost resolution process, which means the parties pay nothing. Consequently, it removes the money advantage inherent in today’s legal system. Basically, the jury members compete against each other to earn RHUcoins, thereby subsidizing the costs to the disputants.
So your jury could soon be 1,000 lawyers or mechanics, dentists, etc., depending upon your claim—instead of 12 people who may or may not be fully engaged in your case.
A lot of folks seem very interested in, but know little about blockchain. Others conflate blockchain with legal tech more generally. What are your thoughts on blockchain and its benefits and/or dangers?
Blockchain seems to be both an over- and under- hyped phenomena--just like the internet was in 1999.
I guess the reason why people conflate blockchain with legal tech is that self-executing smart contracts have such a big role in blockchain applications and seem destined to displace traditional contracts in regulating commerce, asset ownership, and other civil relationships. This raises a lot of interesting issues, including whether software developers will become ad hoc legislators and regulators by controlling the dos and don’ts of blockchain commerce via code, and whether contract enforcement will trend toward preemption through algorithm rather than after-the-fact litigation.
If a blockchain is coded to say you can’t do something, you may not be able to do it regardless of preexisting laws, jurisdictions, and rights. It will be extremely difficult to adjudicate conflicts and actions that are governed by distributed networks. Simply reversing a distributed ledger entry on a blockchain is nearly impossible. So legislators and regulators may have to intervene at the point of coding, rather than at the point of action as it does today.
So there are some concerns there, but also huge potential to simplify how we interact commercially with counter-parties. AI--artificial intelligence--poses an even bigger threat, by rendering both decisions and executing actions via algorithm. One of the things we are doing at Rhubarb is to create a human consensus decision rendering process that can serve as a counterbalance to AI and algorithmic decision processes. That's extremely important to preserve the ascendancy of human judgment over automatic process--a risk that's been well publicized by Stephan Hawking, Elon Musk, and others at the forefront of tech.
A lot of younger lawyers are interested in legal technology and/or legal innovation. What be your advice regarding how they can get involved/learn more?
First, read all you can--things are moving quickly and there’s no roadmap. Understanding those changes is a competitive advantage over those who fall behind. Second, if you have a good idea about how to apply legal tech, don’t wait for someone to do it--take the lead to develop it yourself. It's never been easier to access capital for great ideas. The lawyer of the future will need to be a technologist as well as an advocate. The convergence is inevitable, and it’s better to be out in front.