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alt.legal: How Is Legal Technology Advancing In 2016?

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alt.legal: How Is Legal Technology Advancing In 2016?

By Ed Sohn, Above the Law

Yes, the LegalTech New York conference is now mostly old news. Yes, I ate a lot of chicken & rice. And as always, yes, some trends surfaced worth watching as we go forward this year.

I’m pausing the series on artificial intelligence and machine learning in the law (but stay tuned—I’m having some pretty fascinating discussions) to post my second annual LegalTech post, even if it’s three weeks after the fact. So here’s a smorgasbord of snapshots into my week at LTNY 2016.

Bridging the Gap in E-Discovery

E-discovery vendors still dominate the show. I would be remiss if I didn’t mention that my company, Thomson Reuters, launched our big offering called eDiscovery Point, graciously covered here and elsewhere. Thomson Reuters tends not to hold back when going big: we brought people adorned in obnoxiously bright orange, massage chairs in our VIP suite, had a gritty and honest roundtable at the Iguana Club with our friends from Paul Hastings, and even threw a fancy event featuring Nate Silver (he was a fascinating keynote, even if he was a bit frazzled from doing an all-nighter for the Iowa caucuses).

Newer e-discovery entrants from the startup scene also showed up, including Everlaw, who recently received some investment from Andreesen Horowitz. And I even found highly specialized ancillary services, like ESILAB, who sat in the corner of the second floor and told me with great excitement how their product can automatically detect redactions on incoming e-discovery productions. It may not sound super sexy, but I know some e-discovery practitioners who would jump at the ability to challenge redactions well before a redaction log comes in the door.

In the midst of this sprawling throng, what I found most interesting was the discussions around how to make e-discovery more accessible. No one disputes that e-discovery technology is going to new and exciting places. But the threshold of technical savvy required to adopt e-discovery technology remains really high, and as the technology continues to advance, that threshold only becomes higher. How can the technical threshold be so high for something that is a mandatory part of almost all commercial litigation? It’s the bizarre underlying problem that fuels a massive e-discovery industry (over $10 billion by some estimates!).

How do you solve this problem? Some people focus on deep education for legal professionals. Others believe this can be insourced with more control for in-house legal departments, or outsourced completely to managed services shops. My company is focused on making the software easier to use and less intimidating for the average, non-savvy lawyer. One way or another, people are starting to really pay attention to this idea of bridging the adoption gap in e-discovery.

Cost Analytics

There are several players in the growing legal cost analytics space, including traditional leaders like Serengeti, Elite and TyMetrix. Around this time last year, Huron (now Consilio-owned Huron) acquired Sky Analytics, another cost analytics platform. And there’s still new players taking different approaches to this space. It makes sense, as we keep hearing that GCs are under more pressure than ever to run their legal departments as true business units. Using these tools, legal departments are better able to compare billing rates, control and monitor their own spend, and establish budgeting best practices.

I sat down with guys at CounselCommand to see one of these tools. The power of this tool and others like it is seriously impressive, with the ability to get real-time insights on billing rates by practice and region. But more than a dashboard, this tool actually suggests lower-cost alternatives and models their cost savings. You can filter by L320 (the ABA code for Document Productions), see how much your outside counsel are charging (way too much), and simulate how much you’d save if you employed a lower cost provider (hundreds of thousands). Even if it’s a rough estimate, tools like this help make it really real.

Analytics like this will drive differentiation and disaggregation in law firm services. We’re seeing some firms start to position themselves this way, focusing their billable practices on the highest value services, but tools like this will enable law departments to do more than just vaguely threaten to cut spend until they emotionally feel they are getting a “good deal.” The proof is in the analytics.

If widely adopted, this could be a glacial change across how buying and selling legal services happens.

Catalyzing Startups

There was a bunch of other stuff at Legal Tech, but one of the most interesting sessions that I caught was actually outside of LTNY: the Evolve Law meeting hosted by Davis Wright Tremaine.

It was the last day of LTNY, though, so I was pretty beat up from a straight week of demos, meetings, and over six hours of public speaking as a moderator or panelist. Evolve Law stood between me and my final meeting (which included cocktails). To my surprise, I was energized and engaged by the Evolve Law event.

Evolve Law is a consortium of legal tech startups that seek to foster community, accelerate innovation, and provide resources for all of the players in legal technology startups, including investors and clients. Associations like this are often meteoric and have the feeling of chaotic entropic collisions, but Evolve Law seems to really meet a need in the legal tech community and they get the differences in legal tech compared to other startup sectors.

This event focused on investments into legal startups. The panelists included two startups (Hire An Esquire and Casetext), two venture funds, and one angel investor. I found their discussion pragmatic and real, and the audience was highly engaged, with spontaneous remarks agreeing or disagreeing. There are some unique issues pertaining to legal technology startups: a really long sales cycle, difficulty sizing the market (especially for net new offerings), and teaching investors to understand the value proposition.

Our good friend Alma Asay, from Allegory, also did a solo session on dealing with VCs. Her points captured a lot of the same sentiments: VC expectations for fast results, the fact that fundraising takes time away from the business even after investment, and maintaining the flexibility to try new things even when VCs may not understand the space.

I am really excited to see how the next generation of better-funded, better-supported startups disrupt legal technology and services.

Finally, chicken and rice.

Like I said, I ate a ton of this stuff. Just waiting for this to hit Atlanta so that next LegalTech I don’t feel so compelled to be killing it. But I think I’ll always have some gastronomic nostalgia between the chicken/gyro mix with extra white sauce and LegalTech New York.

Ed Sohn is a Senior Director at Thomson Reuters Legal Managed Services (formerly Pangea3). After more than five years as a Biglaw litigation associate and more than two years in New Delhi overseeing the delivery of managed document review, Ed now focuses on managing the new e-discovery solutions with technology managed services. You can contact Ed about e-discovery, legal managed services, theology, chess, Star Trek: The Next Generation, or the Chicago Bulls at edward.sohn@thomsonreuters.com.


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