Legal services business (LSB) UnitedLex has acquired the Data Science, Analysis & Investigations (DSAI) team from another LSB, Paul Hastings, in what is an unusual offloading of a team the firm spent six years building. The total team is understood to be about 20 people, primarily with a focus on eDiscovery.
Under the acquisition – (the amount paid – in fact if any cash changed hands at all – is unknown at present) – Paul Hastings will still work closely with fellow LSB UnitedLex – they just won’t own the team or have to pay the staff’s salaries; that will now be UnitedLex’s responsibility, which can leverage the talent and tech tools they’ve developed for their own clients.
The deal seems to mark the end of an era – at least for Paul Hastings – as it moves out a group that the firm had spent six years helping to build under the DSAI team leadership of Tom Barnett.
On one level it makes a lot of sense, e.g. off-load the costs of the team to another LSB that has a structure better suited to large volume matters – which it can then continue to work with.
But…….it could also be seen as stepping back a bit from driving innovation within the law firm itself. So, this could be the end of an era in more ways than one…..we will have to see what impact this has on the broader drive toward changing work processes inside the firm.
In terms of the tech coming with the team, the LSBs told Artificial Lawyer the following: ‘[There will be] a highly flexible, (highly successful and award-winning), AI toolkit that can be applied to different types of legal problem. Initially it was used in litigation and investigations, and also for contract analysis in the M&A space.
‘With UnitedLex’s involvement the application will be spread across a wide range of legal issues. It is state-of-the-art machine learning that is used in the broader information economy, and is now being applied to legal in a way that hasn’t been done before. So, thanks to the acquisition, this bespoke AI capability which has been built and coded by Paul Hastings, is now being integrated into the Questio platform, (the interface patented by UnitedLex for litigation and investigations data analysis).’
Meanwhile, one source close to the firm told this site: ‘The firm is just outsourcing eDiscovery – that’s what the data science team actually is. As I understand it, the team will now be seated at (and paid for) by UnitedLex, and will therefore have more resources available to leverage on behalf of Paul Hastings.
‘The bespoke Paul Hastings discovery platform, PHDiscovery (which is built on Relativity), continues to be administered by the team, just from their position within UnitedLex.’
The source added: ‘The firm’s litigation support function was renamed DSAI a couple of years ago, after they brought in a number of part-time data scientists. Their remit was largely to work between matter teams and clients on selecting the appropriate eDiscovery platform / vendor for a particular matter, and outsourcing large eDiscovery reviews. The team was also able to do its own sentiment analysis / TAR, and will continue to do so from UnitedLex.’
Barnett will continue to lead the group as Senior Vice President and Divisional General Counsel at UnitedLex, which as a company has a focus on large volume matters.
Barnett was a Special Counsel for eDiscovery and Data Science at Paul Hastings and was based in the firm’s Los Angeles office. He’d previously worked at Sullivan & Cromwell, also on eDiscovery matters. His and the team’s work tends to focus on complex data analytics, eDiscovery, document review, and information governance projects.
The move follows the commitment last year by UnitedLex to make more use of NLP technology to help with doc review work – a mainstay of UnitedLex. Central to this has been a partnership with Seal Software.
Under the terms of the new agreement, UnitedLex will broaden and deepen the technology options available to Paul Hastings’ lawyers and clients via ‘significant additional technology investment and execution of aggressive development roadmaps’ they added.
‘The acquisition also enables the DSAI offering to be brought to markets beyond Paul Hastings’ own lawyers and clients, taking advantage of UnitedLex’s development team and global reach,’ the LSBs said.
I.e. UnitedLex will also be the one opening the wallet during this difficult financial climate to keep investing in the team.
But…..why do this?
Barnett said: ‘It’s an incredible opportunity to realise the full potential of what we started during a time when most law firms were not even thinking about – let alone developing – AI and machine learning technology to solve legal problems. We will now be in a position to expand the model to serve legal departments and law firms worldwide.’
However, he added: ‘The incubation and development of the team would not have been possible without the extraordinarily bold vision of Paul Hastings’ leadership.’
Meanwhile Greg Nitzkowski, a Managing Partner at Paul Hastings suggested that this was not the LSB off-loading part of its tech and innovation capability, but rather he saw ‘this as a partnership that will allow the further development of cutting-edge solutions that will benefit both our clients and the legal field as a whole’.
That said, this is a ‘traditional law firm’ type of LSB spinning out a team focused on technology and data science. I.e. this is going in the opposite direction of many of its rivals.
At the same time we have seen some law firms going all-in on tech team investment and creating their own groups that build and sell software, as well as investing in 3rd party tech companies.
Ultimately, and despite the two LSBs continuing to work together, this could be seen as putting some distance between ‘owning’ innovation and asking a third party to provide it.
Also, one has to ask: has this been driven by the downturn caused by Covid-19? I.e. Is this part of a cost-cutting exercise?
Artificial Lawyer got some on-record responses on the deal (see above re. the tech), and on whether this was driven by cost reduction, Paul Hastings has not commented officially, but a source at the firm unofficially told this site it ‘was not a cost-cutting move’ and that the plan had been in the works for some time, and was not driven by the recent criss. (Although, of course, it will save them money, even if that is not the official reason for this.)
Last word goes to UnitedLex President, Dave Deppe: ‘Paul Hastings has been consistently ahead of the curve. They have incubated something so unique in Law and taken it to a level ripe for acceleration. What they bring to the table will be accretive to who UnitedLex is and will strengthen us from day one. We are excited, together, to take this technology to the next level.’