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IPOs, historic deals & weird Google results

Legit. | Legal News
Legit. | Legal News
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IPO
LegalZoom IPOs, again.
Image: Crunchbase
Image: Crunchbase
In an announcement suffused with deja vu, LegalZoom has filed to go public.
The legal tech company - which aims to ‘democratize law’ by giving small businesses legal and compliance advice - first filed for an IPO nearly a decade ago, but quickly pulled the offering to swerve into the arms of a private equity firm instead.
Now, on the brink of attempt #2, a forensic look into company’s S-1 filing reveals both the good and the bad.
The good:
  • LegalZoom booked $400m in revenue over the last year.
  • Digital enablement and the gig economy have accelerated small business creation, leading to a bigger addressable market.
Not in the S-1 but a personal opinioncreator toolkits (Substack, Twitch) have paved the way for ordinary individuals to market themselves as small businesses.
The result is a hyperloop-like scale of growth: the more content these individuals create, the more opportunities there are for monetization (whether through ads, brand deals or direct consumer relationships) - and the further these brands slide from personal hustles into business territory where legal and regulatory compliance lurk beneath every decision.
This opens up a whole new world for LegalZoom, who - if it wanted to - could easily capture this market. Imagine a creator portal on LegalZoom where a streamer could figure out, for example, how to correctly file his tax returns for his Twitch income. Creator economy dilemmas like this are such interesting (and pressing) untapped opportunities for legal tech.
The bad:
  • LegalZoom has a history of net losses and, with an anticipated increase in expenses, might not be able to maintain profitability.
  • The market is pretty saturated (cough Rocket Lawyer cough).
  • The US legal landscape is incredibly complex, making it difficult for any online platform to scale with use cases that are tailored to each local jurisdiction.
THE TAKEAWAY
The hoopla of LegalZoom’s first attempted IPO means attempt #2 can only go better.
On a personal note, I’m excited to see B2B and B2C legal tech portals try to capture the wave of new-age professions and the web of legalities entangling them.
Zoom out: legal tech companies have been historically avoidant of going public - but times are changing, with both Ironclad and Evisort eyeing IPOs within the next five years.
TECH
Incoming lawsuit in 3, 2, 1…
India’s Karnataka state is planning to send Google a legal notice after a search result showed Kannada, the state’s official language, as the “ugliest language in India.”
The search result quickly sparked outrage, with Karnataka minister Araving Limbavali demanding an apology from the tech giant:
  • “The Kannada language has a history of its own, having come into existence as many as 2,500 years ago. It has been the pride of Kannadigas all through these two-and-a-half millennia.”
Amidst the hoopla (and suggestions on Twitter to jail the person responsible for the search algorithm) Google issued a statement apologizing for the “misunderstanding.”
  • “The way content is described on the internet can yield surprising results to specific queries. Naturally, these are not reflective of the opinions of Google.”
THE TAKEAWAY
This is nothing more than a tech company getting caught in an awkward position because an algorithm spat out a haywire result.
What’s more interesting is how far algorithms can be liable, if at all, in situations with physical, tangible harm.
Take healthtech, for example. In 2018, a major healthcare AI vendor’s internal documents were leaked, revealing that the computer’s algorithms had produced erroneous and unsafe cancer treatment recommendations in multiple cases.
The company determined that the flaws could be traced to “synthetic” data: engineers had trained the AI on hypothetical data rather than real-world cases.
Situations like this are murky - the contours of legal precedent are court-developed, and we haven’t really seen many cases regulating AI liability before. Does liability fall to the last person who touched an algorithm, the first person who developed it, or a third alternative? We don’t know.
But, as more companies turn to AI (wisely or unwisely), these uncertainties will demand more clarification.
TAX
A historic deal
Image: BBC
Image: BBC
On Saturday, finance ministers from the G7 nations announced a landmark tax deal not-so-subtly aimed at tech behemoths Facebook, Apple, Google and Microsoft.
The backstory. Multinational companies have a penchant for ‘tax-efficient’ schemes i.e. using shell companies to shift phantom money to countries with low tax rates to help their bottom-line.
Under the G7 deal, companies would have to pay a global 15% tax rate in each country they operate in. Plunging the knife further into Silicon Valley, the agreement also calls for an extra tax on profits from the “largest and most profitable multinational enterprises.” 
THE TAKEAWAY
The deal is seismic in globally unifying the way we tax multinational corporations.
But the G7 still have a few hurdles to jump through:
  • The G7 ministers still have to convince countries like Ireland, who oppose the 15% minimum tax in order to attract tech talent, to join the deal.
  • In the US, the deal must be passed into law by both houses of Congress.
  • The deal may let Amazon off the hook, per Guardian.
LEGIT ONE LINERS
  • Facebook buys studio behind Roblox-like Crayta gaming platform.
  • JBS’s US beef plants forced shut by cyberattack.
  • Amazon is open to being sued.
  • China’s tech clampdown is spreading like wildfire.
  • Pakistani startup Tajir raises $17m in Series A led by Kleiner Perkins.
  • Supreme Court rejects Johnson & Johnson’s appeal of $2bn penalty in baby powder cancer case.
  • Elizabeth Holmes asks court to exclude evidence of customer complaints.
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Legit. | Legal News
Legit. | Legal News @anniamirza

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