http://venturebeat.com/2012/03/20/legal-startups
http://startupstats.com/legal-startup-2012-03
One important question is "why now", which is partially addressed in the post:
The latter is clearly ideal. So why hasn’t it happened yet?
Why hasn’t software eaten the law? Our thesis is that it’s
actually quite hard. Lots of people have tried. Some are
still trying. But most are hacking at the branches.
Incremental change is not without value. But software can’t
actually improve legal decision making unless we aim
higher. Harder, but more promising, is to strike at the
root of the problem. The law is information. The future of
legal technology involves organizing and understanding that
information. ... The fusion of legal domain expertise and
engineering talent is key
Sometimes there are ideas that were just before their time; 1999's webvan.com didn't work, but today delivery.walmart.com or Amazon Fresh is available. Webvan failed because it was nontrivial to set up a nationwide infrastructure to deliver low-margin perishable goods. Amazon and Walmart built that incrementally; Amazon starting with higher-margin non-perishable books and Walmart with physical stores. And even Amazon Fresh is not yet nationwide.
Sometimes there are clear technological reasons why newer iterations took off. Six Degrees was one of the first social networks circa ~1999, but digital cameras weren't that popular and it was hard to get photos of faces online. Just a few years later, Friendster and then Facebook didn't have that problem.
And sometimes there are ideas that just require experience to build. A lot of the early cloud services were premature because people just didn't have experience operating large websites at scale. It's a lot easier to factor AWS out of experience operating Amazon, or App Engine out of experience operating Google, than to do it from scratch in 1998.
Infrastructure might be one of the most compelling arguments for "why now". Today, unlike ten years ago, every single lawyer is using computers and mobile devices regularly. Massive numbers of legal documents and patents have been digitally indexed in Google Scholar. And many judges and law professors have been blogging for sometime.
But perhaps the evolution of the legal market is the most important. Lots and lots of young lawyers are out of work or underemployed while paying off huge student loans. There is a newfound cynicism about law school and that means the young have started to think about doing things differently. Even those from elite schools who have no problem getting jobs can feel this in the zeitgeist. And, critically, these discontented young would also be the first adopters of any new technology.
So perhaps that's the answer. Why now for the boom in legal startups? Not because of a single new technology per se, but because (a) one can assume computer/internet/mobile infrastructure to be utterly ubiquitous [even in law offices] and (b) the market is ready because young lawyers are restless.
That said, Blake's broader point about the difficulty of the problem still stands, and we think the difficulty - not market trends - is why no one has done this yet. There is much technology and infrastructure that makes what we are doing significantly easier today than it was even 5 years ago. But underlying it all is still a lot of difficult technology that takes years to build.