Buying legal tech has often seemed to be an esoteric activity, but it’s increasingly becoming more down to Earth and not that dissimilar from the day-to-day world of High Street shopping. Artificial Lawyer explores.
Own-Brand Megastores and Department Stores
First we have the ‘own-brand megastores’. These are like the flagship stores of Apple or Microsoft on Regent Street in London. They primarily sell one brand’s products and those products are designed to fit together. They may work with other companies’ systems – out of necessity – but the goal is to offer as much as you can under a single brand, with a single corporate experience along with a shared culture and direction.
Litera, now onto its 13th M&A deal in two years, would be a good example of this approach.
Then we have the procurement platforms, i.e. department stores. Here we are talking about a single point of entry that gives access to the onboarding of multiple capabilities.
The department store doesn’t have to produce any of its own tech (although it could if it wanted to), it just has to give the shoppers the confidence that everything under their roof is good quality and guaranteed to work well. As if it couldn’t, then the department store model would not be of much use. Reynen Court is a good example of this strategy.
This great rationalisation of the legal tech buying process doesn’t end there. Now we have two marketing groups, LexFusion and Jameson Legal Tech, which are in effect a bit like the catalogue companies with a more direct sales approach. I.e. they come to you, they ‘push the catalogue through the door’ and they hope that the carefully curated collection of products gains your interest.
And, naturally, once you’ve bought one thing from the catalogue they will keep coming back to you to see if you’d like something else. The aim is to build loyalty and expand the ‘share of wallet’ that you’re spending on new goods.
It seems likely that there will be more of these ‘catalogue’ strategies taking shape in the years to come. It’s a tried strategy that works in the retail world.
We often see creative collaboration in the world of fashion, for example, a pop star or supermodel designs a small collection for a big retail brand, fusing the expertise and following of both together to make something that neither perhaps would have done on their own.
We are seeing more of this in the legal tech and ALSP world. For example, BlackBoiler, which handles contract review, teaming up with process-focused Factor, to offer a combined service to their clients. Factor has also formed a ‘partnership’ programme with several other companies, with again the idea that they will work closely together to create shared outputs.
And we have seen iManage launch a special partnership system as well, where the aim is to work closely together with other, often smaller companies, to build applications that bring the best from the larger iManage together with the specialist expertise of companies such as Autologyx, for example.
Co-Branded Product Alliances
Co-branding product alliances are where the two parties are fairly equally matched in terms of size and scale, but don’t see each other as competitors and instead see the value in working together in a very visible way. For example, the way that Intel, the chipmaker, has very publicly worked with certain PC companies, even sticking that classic ‘Intel Inside’ badge on the edge of the keyboard so you cannot forget they are very much part of this product.
An example here would be Clarilis, the doc automation system that leverages a large team of subject matter experts, and its deal with legal information and guidance company, From Counsel. Clarilis brings the tech expertise and ability to handle complex contract automation. From Counsel brings together a range of legal expertise of its own. Together they have been able to create a range of ready to use automated contract templates.
The Chain Store
These are not necessarily very broad. I.e. these don’t have to be like a department store (although can be), but they do have to be nearly ubiquitous with their core offering.
Surprisingly, there are very few legal tech brands that ‘everyone knows and everyone uses’. Probably the closest thing we have to the chain store are things like Thomson Reuters’ Westlaw and other huge case law databases that are used by both solo lawyers and global firms and everybody in between the world over.
Now, there may be companies that really want to be a globally known legal tech chain store, but it seems unlikely that many will become one. It’s just such a huge mountain to climb to cover so much of the legal market globally.
The Independent Shop
If you walk around your town you will see plenty of the above, but independent shops keep going and new ones appear every week.
The reality is that as long as there is funding there will be new independent ‘shops’ opening, offering a new take on the use of NLP tech, for example. And then they will begin the long journey into the market and the multiple strategies that they will employ over the course of their independent existence. Then they will either go bust, get absorbed, or in a very few cases become one of the big retail brands.
(And it’s worth noting that legal tech startups do seem to hang on for many, many years, staying as small ventures long after a lot of startups in other sectors would have gone bust.)
These independent shops may provide good service, but perhaps their products don’t always integrate easily with the products of other stores. Yet, people keep coming back to them because what is ‘new’ and ‘different’ will always be alluring, even if it has some drawbacks on occasion. But, in many cases these independent stores do indeed have something special and unique to offer the market.
The buying experience for legal tech is becoming a lot more like that of the general retail world, with strategies that have existed on the High Street for decades now seeing broader uptake across our sector. And that’s a good thing because it reduces the distance between buyers and sellers. It also makes the world of legal tech less arcane and more understandable – which of course it should be. At the end of the day it’s all just about making the provision of legal services easier and more efficient, and that shouldn’t be a complex or mysterious thing.
By Richard Tromans, Founder, Artificial Lawyer