At the time of publication: Series A | Total funding raised: ~24mn USD
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There can be no doubt that justice delayed is justice denied. But justice often has been significantly delayed. As we can see in the case of Purdue Pharma (Opioids), Wells Fargo and many other corporate incidents - things take too long to resolve even when hundreds of thousands of people and even millions are wronged. Justice and resolution take too long even in consumer friendly jurisdictions like the United States.
Can technology help bring justice faster?
Usually ‘legal tech’ startups focus on increasing the productivity of law firms once they take on cases - helping them research faster (eg. CaseText), automated brief writing (eg. Clearbrief), finding the right arguments faster etc.
Darrow.ai, based out of Israel, has a different and interesting approach. It wants to find winnable cases involving corporate wrongdoing which means a potential for class action lawsuits and damages payouts and hence good compensation for victims and a share of that as revenue for law firms.
Why does it take so long to get justice in corporate wrongdoing? Because there is no one shining the light on this which means it takes extraordinary effort from law firms to discover such cases. There are bits and pieces of information scattered around. If these can be weaved as a coherent pattern that tells a clear narrative about wrongdoing, then there is a potentially winnable case on hand.
Darrow (presumably named after legendary trial attorney Clarence Darrow) through technology assembles these pieces of info together and makes it easily discoverable for a law firm.
Darrow’s Co-founder Gila Hayat says:
"We identify companies that have violated the law and hurt people. Acts that resulted in wide-scale damage, usually to millions of people and sometimes also to tens or hundreds of thousands,"
"Most violations are never discovered. The information is available, but the challenge lies in finding it within the vast amount of online data and assembling the legal story from the bits and pieces scattered across multiple sources. This is where we come in,"
Lawyers can use Darrow to search for potential cases in the domains they are interested in.
One co-founder explains:
"The classic examples are from the world of privacy, like data leaks and misuse of customer information, but we have since expanded to areas like consumerism, and the environment. We don't lead the legal action but rather pass on the information to the law office with the best chances of succeeding in this case based on their track record.”
Apparently, the firms pay Darrow an initial sum for what they decide to take on and they get continued actionable insights and reports throughout the time they take on a case and Darrow gets some additional fee later on.
"We are not satisfied with merely discovering these violations," added Hayat. "In fact, we accompany law firms throughout the entire litigation process. Darrow provides the factual basis for the case, matches it with the best-suited law firm in order to bring it to court, and supports the firm throughout the proceedings."
I think the pricing model can potentially be fine tuned to a more subscription + revenue share model.
Darrow claims to work with some leading law firms and has already banked millions in revenue due to its appealing value proposition:
“Using Darrow, legal professionals gain a huge market advantage by receiving quality information about undetected legal violations, reducing investigation time and diminishing costs, ultimately ensuring successful litigation.”
Darrow calls its mission as ‘frictionless justice’.
Darrow has a great solution approach and in my view the outcomes can be potentially augmented by bringing on two more participants to its platform - funders and investigators/journalists.
The litigation finance market is constantly growing and a recent study puts the market size estimate as 39bn USD globally. Litigation Funders will be able to spot winnable cases on the platform and fund the law firms which will increase the number of cases taken up
Investigators/Journalists can use their skills to complete the narrative that Darrow highlights and this can be used by the law firms to increase their chances of winning cases. Also, publishing stories in public about the potential wrongdoing will increase awareness and the spotlight is good for outcomes. Investigators can be compensated out of the proceeds from damages
The founders of Darrow are all from the legal field themselves - they all clerked together for an Israeli Supreme Court Justice before deciding to start Darrow.
Darrow has a very good and different solution approach to a clear gap in the market; a very important mission; great value proposition of significant additional revenue for its clients; large market size that it can expand on; a tailwind of increased interest in financing lawsuits; evidence of early product-market fit (its client signups and revenue); good founder-market fit; Darrow is an exciting startup to watch out for.