Legal tech convergence is when companies that were once quite distinct in their offerings begin to look the same. Generative AI’s multiple capabilities are at the root of this evolution and it will change the market. Artificial Lawyer explores.
Legal Tech Convergence
Once upon a time legal tech companies did one thing, i.e. they were point solutions, albeit sometimes very significant ones. A company may have assembled a case law library and then digitized it. Another helped you to compare documents. Another allowed you to redline and review a contract. Another worked off a playbook, or modified a template, to help you to draft. And there were many, many others, (and still are).
Then we had what this site started to call ‘platformization’, as more and more companies either through M&A deals or internal development – and often a mix of both – started to build out not just one or two extra capabilities, but many. Litera is a classic example of this, which went on an acquisition spree, buying up a swathe of legal tech businesses to build a platform.
For this site a ‘platform’ is a unified collection of capabilities, an assembly of point solutions, built with the goal of keeping you working within it. They may be highly integrated and the solutions work well together, or they may just be a rough conglomerate of disparate tools. But, the goal is the same: for one company to ‘own’ as much of your legal tech usage as they can.
And some companies started the platformization journey a long time before many others, LexisNexis and Thomson Reuters are perhaps the most well-known examples. Thomson Reuters went from case law for disputes, to contract libraries for transactional work, to contract automation, and more.
Now in the 2020s and since especially the arrival of ChatGPT in November 2022, we have convergence.
This is where many different legal tech companies all start to offer the same things, even if they have very different starting places, different histories, and different original core products upon which their brand was once built.
Plus, to complicate things, we have new companies coming to market that seek from Day One, to offer a very broad mix of capabilities, or skills as we’re now describing them in the age of genAI.
But, generally the approach is to provide multiple skills, operated via an AI Assistant, i.e. you get a whole host of things you can do, accessed – at least in principle – via a single genAI-based UI/UX, in short an AI Assistant on tap across multiple needs.
In some cases the companies on the convergence path are just getting started and only offer a few additional skills (so far), in other cases, large companies with diverse histories have almost the same multi-skill offering across many areas.
Here are some examples:
- Callidus – a startup that right from its inception has offered lawyers case law research and transactional skills such as review and drafting.
- vLex – started out very much focused on case law research, now in the process of offering a broad suite of transactional skills, from drafting to even large-scale due diligence.
- Thomson Reuters and LexisNexis – as noted, they started on the ‘multi-skill’ journey long before many others, but with the arrival of LLMs have now pushed the AI assistant strategy and expanded what is possible.
- BRYTER – which started as a no-code process automation system has fully embraced genAI and is now offering LLM-driven contract review and several related skills. It seems likely other LLM-related capabilities may be added in the near future. This is an example of a company in the early stages of convergence.
- Harvey – from Day One it has also been clear that this genAI-first company was going to use LLM technology as fully as possible and it provides legal research, multiple transactional skills, and has even partnered with Icertis to help with CLM needs around contract analysis.
- Leya – also from its inception it’s been designed to leverage LLM skills as much as possible in the legal domain, across transactional and litigation work.
- Own Brand Wrappers – and we have also seen law firms tap LLMs directly with some additional DIY tooling to provide their lawyers with a range of skills and connectivity to legal data sets, e.g. Dentons’ ‘Fleet’. And this further blurs the picture for the buyers.
- Generic Offerings – and to further complicate things, you can also tap something like Microsoft’s CoPilot, which will also help you to review docs, provide summarizations, and has a growing range of skills – albeit most say what it can do on its own for legal uses is insufficient.
So, are all these companies ‘the same’? No. Not exactly the same. But, are they offering a range of skills, many of which are genAI-driven, that overlap with each other? Yes.
Do they, to the untrained buyer’s eye all look like they can do roughly the same things? Well, it depends how closely you look and how much you test, but if you only look very quickly, then yes, many of these do look like they are now the same. But, they likely are not when it comes to real use of these companies. However, it’s not clear yet how many law firms or inhouse teams will test multiple systems in detail to really find out.
Why do they do this (at least the commercial ones)? Because, rather like with platformization, if company X can keep you using its legal AI assistant across multiple needs you may eventually come to depend upon it. Your legal tech spend on that company gets locked in, and over time may increase.
Does this strategy work? Yes and no. A lot of legal innovation people have said for some years – dating back to the big platformization push in the late 2010s – that they want to assemble the tools they want, not have just one platform. They want to pick a super-specialised tool for doc review, whether ML/NLP or genAI. They still want to access ALL the main legal libraries, not just one. They will use these convergent platforms, but will dip in and out of them.
But…..no doubt some buyers will like the idea of a single convergent platform. Yet, even those in favour of one dominant AI assistant to help with most tasks may still add in some point solutions, and in reality they will already have multiple point solutions that the firm uses, because of existing relationships with vendors.
So, on balance, even if you are all in favour of relying on one multi-skill system, which can access case law, do transactional work, access your DMS, and more, you will likely have multiple point solutions the firm’s lawyers use already and they are not about to drop them. But…..convergence is not going away. In fact, it will grow.
Conclusion
In the past it was easy to create a taxonomy to classify the various legal tech companies. They were often distinctly different. Now, even though the majority of all such businesses remain point solutions, there is a genAI-driven convergence battle going on among a growing number for the minds and ‘wallet-share’ of the legal market.
Moreover, many of the players driving this strategy are large already and/or very-well funded. In which case, they can move ahead with their strategic goals more easily than some rivals.
Will point solutions get displaced? Not yet. And those that really excel at what they do, that really stand out as best in class for that task, it seems likely they will last and prosper even in this new era of convergence. Buyers want convenience, but they also want the best tool for the job – or at least enough do. But, convergence definitely will reshape the market and test the strategy of those who choose to specialise instead.
Either way, the legal tech market is evolving – and rapidly – and it’s all down to the arrival of generative AI.
Richard Tromans, Founder, Artificial Lawyer – Sept 2024.
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Legal Innovators UK Conference – November 6 + 7, London.
If convergence is of interest to you, then….come along to the Legal Innovators UK conference in London, Nov 6 and 7, where generative AI’s growing impact on the legal sector will be explored across multiple sessions. There will also be plenty of the leading legal tech companies taking part and they will have plenty to tell you about where things are heading and what they can now do.
For more information about speakers and companies taking part, please see here.
And to get your tickets now, please see here.