Problem: A Trillion-Dollar Divorce Need

Our divorce system is an abomination. We take a family that has made the difficult decision to take separate paths. We then drop them into an adversarial court system that was designed for criminal charges and business disputes – mom versus dad, husband versus husband, families set against each other in a zero-sum war over toasters and couches. And how do we arm these people for that gladiatorial arena? 

Not with lawyers: in some courts, as much as eighty percent of divorce cases are filed by unrepresented parties. Jack Newton, founder of Legaltech unicorn Clio calls this latent legal services market a trillion-dollar untapped market. The legal industry calls it an “acces to justice gap,” and throws their hands up in despair at the size and scope of the problem.

Even if you do have a lawyer, the churn of billable hours to review financial records and exchange discovery demands with the other side can cost you an average of almost $20,000 per couple, more if you have children. 

The absurdity of the system can be boiled down to one simple fact: most states’ laws call for exactly – or close to – fifty-fifty. People spend years of their lives, and tens of thousands of dollars, to simply divide by two. Take a moment to consider that one more time: we’re using a court system designed to fact-find, interrogate, and cross-examine, to find the hardest-to-find truths, when we already know the outcome: Fifty-fifty. 

Solution: LexyAlgo

Divorce then is more math than law, and the simplest of math at that: divide by two. So why are we approaching divorce with forms and law rather than with math?  

LexyAlgo wants to use fintech components to help users assess their assets and debts, then divide by two. Court forms – the easiest part – will be easily populated and e-filed in the background while the part that matters to the users – controlling their financial futures – takes place in the foreground. Generally speaking, the software to build this isn’t particularly complex: a few data connectors to pull in assets, a pretty user interface to split assets, and a chatbot UI to get user data to populate those court forms, and you’re done.

Current Offerings: Soft-launched in Q4 2023, our initial product focuses on the Qualified Domestic Relations Order (QDRO) – a complex, federally mandated form for dividing retirement assets. This offering features a robust document generation stack tailored to meet the specific court formatting requirements of each state. Friction and user error has been reduced greatly by incorporating federal databases to pre-populate information on the retirement plans. Enhanced by analytics and session recording, our QDRO solution serves as the foundation for our comprehensive divorce documentation suite.

Fintech Platform: The next phase involves developing a fintech front end that integrates with APIs and Plaid. This will enable users to effortlessly import years of financial data, turning hours of financial discovery into mere minutes. If the parties wish, equitable division of assets and debts can be achieved through a drag-and-drop UI. This open-books approach not only streamlines the process but also complies with the transparency requirements mandated in many states. We plan to integrate additional APIs for asset valuation, such as Zillow for real estate, and the Blue Book API for vehicles. At an MVP level, the platform would export a full catalog of assets and debts, statements, and a spreadsheet listing proposed divisions with values.

AI-Assisted Mediation: In addition to bringing transparency to the books, there is nascent research and prototype legal aid bots that attempt to help parties mediate their divorce using an LLM chatbot. The bot moderates the users’ language and suggests compromises. The feasibility of an AI mediator will be fully explored and integrated at some point after the MVP launch of the fintech platform.

Document Generation Expansion: Our existing document generation stack, equipped with an interview-style UI, can be expanded to cover all divorce-related forms for every state. We also have the flexibility to enhance the user interface or utilize the stack through an API for a more engaging user experience. After the fintech MVP launch, we seek to integrate a full-stack uncontested divorce document generation solution for every state, along with guidance for users on filing the documents.

Future Coparenting Suite: Looking further ahead, LexyAlgo aims to extend its services beyond divorce finalization. We plan to develop online co-parenting courses (a requirement in many states), as well as custody and support tools and a co-parenting mobile app, comparable to existing solutions like AppClose and OurFamilyWizard. This extension will keep users engaged with our platform post-divorce, offering tools for managing coparenting responsibilities, such as expense sharing. The suite will also create additional monetization opportunities, including college savings accounts and microtransactions for shared childcare expenses.

Big Picture: LexyAlgo’s product suite represents a comprehensive, tech-enabled solution for modernizing the divorce process. By merging legal document automation with financial technology and coparenting support, we are poised to revolutionize the way individuals navigate divorce, making it more accessible, efficient, and equitable.