Factor, the contract-focused ALSP, has launched a new close partnership group that will initially see CLM Agiloft, doc analysis company Kira Systems, and doc review pioneer BlackBoiler, all join as part of its first cohort.
The partnership, which is branded as Factor Connect, will also be joined by flexible resourcing group Priori Legal, and Acadia, a risk management company. Other companies could potentially join in the future, the ALSP said.
Its main purpose is to allow clients to work closely with a trusted group of tech and service providers that know each other well, that share knowledge, and have a lasting and value-generating relationship where lessons learnt from previous joint projects can be leveraged for future work. Clients then benefit from a joined-up offering, rather than having to gamble on a hotchpotch of providers for a large project, some of which may not even know each other.
The move is reminiscent of the ‘best friends’ alliances we saw formed between law firms in the 1990s that went beyond just referring work to each other and saw know-how sharing and strong bonds forming, while still remaining independent firms.
Artificial Lawyer spoke at length to Ed Sohn, SVP, Head of Solutions at Factor, and Eric Laughlin, CEO, Agiloft, about the partnership and how it will work. You can see the interview below – just press Play to watch inside the page. It’s about 30 mins and we really go into a lot of the details, which should hopefully be useful.
During the interview Sohn and Laughlin explained that this is more than just a commercial arrangement and goes beyond what they have already through their membership of the LexFusion marketing consortium.
The clients will know they are working with partners that trust each other and have a positive and collaborative history together. The partners will also over time work on similar matters and be able to share that know-how between them, and so become more experienced at working in tandem on those types of matter. I.e. there is a degree of knowledge management and experience retention going on here that could be very valuable.
That said, Laughlin stressed that they won’t be sharing proprietary IP between the partners. For example, Kira is an NLP company focused on doc analysis and Agiloft is building its own NLP capability to analyse contracts for inhouse teams, so we shouldn’t expect sharing of key software, for example.
They also won’t be in an exclusive relationship. It’s just that when they want to they can come to a client as a group that has a joined-up offering, that goes beyond just pitching as a disparate group.
Artificial Lawyer then had to ask a couple of key questions. Does this create a conflict with LexFusion, of which several of the partners are also members?
The answer was: no. This is because LexFusion is primarily a marketing initiative, whereas the partnership is about offering clients a group of services and tech capabilities that have formed a close working relationship. They added that the potential market for their combined offering was so great that there was little chance of conflicts with LexFusion’s work in relation to marketing in any case.
The next question was: is this all a precursor to merger? Artificial Lawyer mentioned the historical similarities with the globalisation of law firms in the late 1990s and early 2000s, where firms first built alliances and associations, with many of those eventually turning to mergers and creating the global law firms we have today, while others remained staunchly independent.
The response to this was that the partners will remain independent and do their own thing. Moreover, on a side note, it’s worth mentioning that tech companies tend not to merge with services businesses. We have seen a couple, e.g. Elevate buying legal AI company LexPredict, but it remains quite rare. Tech companies generally want to remain software businesses, which have a very different economic model to an ALSP, for example.
Summing up, Laughlin said: ‘This ultimately isn’t about us, it’s about helping our clients to excel. Factor Connect is an amazing bond that allows them to succeed.’
While Sohn added that: ‘This is about how services and tech can be delivered together, and this solves a pain point for our clients.’
Is this a big deal?
Well, first we had a rush for APIs and integrations between a lot of legal tech companies, then platforms and legal marketplaces developed, and now we have a move toward close working partnerships. For example, iManage has just launched a close-knit ‘solutions partnership’ programme where there will be co-development of products – see story.
Such partnerships make a lot of sense in a world with so many applications and service providers. And the key word here is trust.
Clients want to buy in these services and products, but a lack of certainty about what’s on offer slows things down. Providing a group of services and tech that can show not just that they can be trusted – but that they importantly trust each other and know how to work well and deliver together – takes a huge amount of stress out of the buyer’s situation.
Again it comes back to the globalisation of the legal market analogy. Best friends networks, referral groups, or even fully merged global law firms with offices around the world, all generate trust.
They can also tick off many of the needs of the client in one go. That’s super useful – as long as everyone is on the same page. And the partnership model here helps that level of integration to take place, while of course allowing these companies to remain independent.
One could say this is not just a logical development for the legal market, but a necessary one.