New York Bulletin – Thursday
(UPDATE: Fastcase has won the conference’s legal innovation prize, LexisNexis Context has won the people’s choice award.)
So, Legal Tech 19 is drawing to a close, what can I tell you?
Very large conferences, of any kind, are a bit of a prospecting adventure. Where you expect to find gold, you can sometimes not always find what you are looking for, then on the way back to camp you stumble across a rich seam of great value that you had not expected. And so it has been with Legal Tech in New York – thanks to Evisort, Hanzo, LexisNexis, Seal Software, Thomson Reuters, Diligen and iManage for being that rich and unplanned seam this week.
The best session by a long way was the ALM Intelligence report on the state of the market, (see story) which in a nutshell explained the macro-economic picture that will drive the adoption of legal technology over the next few years.
Ironically, tech was the not the subject of their report, but lawyer profits, legal services businesses (LSBs) revenue, and business growth were. Why is this so exciting? Because economics drives the adoption of technology. (Or more specifically, actual needs in a real world economic context drives the adoption of tech.)
[Note: I’ve decided to find a way to bridge the ALSP/NewLaw/LPO/Law Company vs law firm divide and LSBs are it.]
ALM’s data showed that although many law firms are not growing in terms of headcount, they are getting richer by the day. Meanwhile all the other LSBs are also doing really well. How is this possible? The answer would seem to be that the legal market – on a global scale – is getting bigger. LSBs of any type can tap this growth, if they know how to. Simples….
But, the next point was that LSBs will split in two – big deals providers and basic matters providers.
This is a little more complex. In the UK at least, the LSBs driving a lot of the growth in process centres, use of AI for efficiency and automation in general are not basic matter firms, they are the top firms.
Nor do the top firms seem likely to give away process work entirely, even if some firms are also sending matters to LPOs when needed.
So, although the core idea of the split makes sense, it will be more subtle. Also, we should not think for a moment that the firms focused on big deal matters only do complex advice and don’t want or need technology. Big deal clients still don’t like wasting money. They are not naïve when it comes to efficiency.
Meanwhile the LSBs which are forced into the brutally competitive world of day to day legal matter handling will also need tech more than ever to build tech-driven platforms to allow them to compete and/or have an edge.
So, this split – if it happens – will likely accelerate the use of tech due to economic and competitive forces working in a bifurcating and increasingly pressurised system.
Last point on this, if the market is getting bigger as a whole, doesn’t that mean we don’t need efficiency….i.e. less real need to compete…? No. Because the clients are getting wiser. Global clients may now generate more work (en masse as a total group – even if in-house teams are also growing), but they are also smarter about how the work is done. And, if daily reports on the inhouse world are right, then GC pressure on how work is done will continue to increase.
Data is Not the New Oil
If we look at all the legal tech companies at this conference there is often one single theme that unites them: trying to get value out of data.
Therefore data is not oil – as in the real world oil is value in itself. Data on its own may help to train ML/NLP systems, for sure, but that is not the rich, creamy bit that we want. We want the stuff inside, the stuff that is extracted and shaped from that raw data.
What we value is the product from ‘burning the data’ – that is the exciting part. Just tonnes of data is not fun. It’s needed if you want to do large scale legal data searches, and you need it for more accurate training outcomes, but even then, it’s the outcomes you want.
So, what is this data product…what shall we call it….what is this ‘value’…..? I would suggest we keep this simple. Let’s call it ‘meaning’.
I.e. Data x analytical tools (which may have been trained on said data) = meaning.
And that’s what everyone wants, right? Meaning in life, meaning in our legal services business lives.
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