LegalTech New York themes: Predictions and processes
After a couple of days at LegalTech a few themes emerged.
First, there was the overall nature of the show; Inside Legal had a day-one summary that broke down the vendors in the exhibit hall as follows:
- eDiscovery vendors 38%
- Cloud vendors (only touting cloud solutions) 3%
- Big data (companies marketing big data-type solutions) 5%
- Information governance 10%
- Practice management systems (combination of client-server and cloud providers) 8%
- Document management (some overlap with PMS and cloud providers) 18%
As usual, eDiscovery was pretty dominant, both on the exhibit floor and in the sessions. Aside from eDiscovery, relatively little of the show’s content had to do with the actual practice of law (research and creation of work product) but more on the running of legal systems, including document management and practice management. There were, however, some interesting themes that bubbled up.
Predictive analytics
The use of predictive analytics in eDiscovery has given the legal industry a frame of reference for predictive analytics elsewhere in the industry. In many sessions and side conversations I heard a lot about how analytics are the future of many aspects of the practice of law, including research, case evaluation, and business development. The big gap is this: these things are nascent and there aren’t a lot of real product offerings out there, but it’s on everyone’s lips and people are looking to this kind of technology as the next phase. It’s where the conversation about the Cloud was a few years ago.
In a session with futurist Rohit Talwar of Fast Future Research some of these themes came out. Fast Future is working on a report commissioned by ILTA (and sponsored in part by Thomson Reuters) called Legal Tech Future Horizons, which is due in March. Talwar shared some of the findings, which start with global social/economic/technology/environmental changes, and work back to implications for the legal industry. This included examples from Bradford & Barthel, which is starting to apply AI case analytics to claims in order to get smarter about predicting outcomes and deciding whether to litigate or not.
In another session on analytics in back-office processes, representatives from Which & Case and Cleary Gottlieb cited examples of predictive analytics being used to help sort, tag, and retain documents in a machine learning environment, and in leveraging email communications to identify connections and expertise. The key in all theses applications is taking some decisions out of the hands of lawyers and staff. With testing and continuous re-training of algorithms, these firms have found ways for machines to outperform people in key tasks, and to save time in the process.
Despite the buzz on predictive analytics, however, a lot of market education will be necessary before the marketplace really grasps the capabilities of predictive analytics and starts to see the products and processes where they can be applied. Watch this space.
Processes
In “The Graduate,” family friend Mr. McGuire takes young Ben to the side and tells him that just one word – plastics – is the key to future success.
In legal, that word might be “process.” Another innovation theme at LegalTech was around turning legal services into more standardized, controlled, and predictable processes. Fortunately, in this space some of the progress is more concrete.
- The importance of process management to new demands on pricing and alternative fees was really clear in a panel session with a representative from Bryan Cave and a couple of general counsels from Verizon and PNC Bank. Bryan Cave has invested heavily in legal process management techniques, and that has vastly improved its ability to accurately bid on legal work where clients are looking for fixed fees. The combination of process thinking – breaking the legal work into its component parts for measuring the cost of executing it – and using data from past time and billing records is what’s allowing some firms and their clients to break away from the hourly billing model. The message from this session, to put it bluntly, was that many firms are simply not putting the effort they need to into process management. Legal work can be better defined from the outset, and costs predicted more accurately, if both firms and their clients invest in the tools and training to get them there.
- Onit was getting some buzz as a provider of apps for managing contract reviews and other process-intensive legal work. See the films on Onit’s web site for a flavor of this kind of process thinking. Note they are primarily targeting the in-house markets; that’s where the process mindset has penetrated the most.
- I would be remiss if I didn’t mention Thomson Reuters own Practical Law as one of the best examples of process thinking in the industry. The whole Practical Law model shifted the attention from the “what” to the “how” of executing specific types of legal transactions and documents.
- Not to be underestimated is the pace of change outside the legal services industry as a driver for those of us in it. Talwar pointed to an example from the engineering world. There are multi-story buildings in China that have been assembled in as little as 15 days. They are modular and assembled on the building site. It cannot be sustainable, he pointed out – putting together the lease arrangements that fill a building like that can take longer than actually putting up the building. But that is exactly the situation we find ourselves in. The legal processes used in both firms and in-house departments are simply not keeping pace with the rest of the economy, with science, or with virtually any other field. In order to keep pace, a lot more standardization and automation will be required.
