This old-fashioned industry is ripe for the taking

Earlier this week, LegalTech News published a story about the changing face of the e-discovery industry, which features commentary from, among others, our CEO Andy Wilson. The article says, in so many words, that the backward-looking, risk-averse nature of law and its practitioners stifles innovation. But that, even in an environment where the big guys are getting swallowed by the bigger guys, a new wave of primarily venture-backed SaaS companies is rising up to challenge the increasingly staid status quo — and take on the Sisyphean task of pushing legal into modernity.

The article’s opening thesis — “there is no greater success story in legal tech than e-discovery” (certainly for the vendors that made a lot of money, but who else?) — is not necessarily one we’d agree with. But otherwise, the piece gets it right: the innate conflict in legal between old-school conventions and modern tech is coming to a head.

As the industry matures, legacy providers who have the advantages of consolidation, scale, relationships, and technology entrenchment are also forced to confront the idea that theirs is a dying way of doing things and that, at some point, if they don’t innovate, the gig will be up. This is the law of nature. Postal services are killed by Gmails and Amazons, record companies by streaming services, and Siebels by Salesforces.

This being the case, it would appear nevertheless that most providers are content to keep doing what they’ve always done: procure a mousetrap, service the mousetrap with a fleet of people to pull its complicated levers, and sell the whole package to law firms and corporations.

This is the managed services model, and it thrives on complex technology. Complexity makes the support services you’re selling more valuable and creates obscurity around what is actually being done. Complexity is the monolith. It feeds the notion that this stuff — finding things, basically, though how could it be that simple? — is too “dangerous” to do oneself internally, because complexity also creates risk.

So one question to consider is, what happens when technology that’s just as powerful, but easier to use, more accessible and requiring of less human capital (and capital capital) emerges? (And a related question: Remember Clearwell?)

On the other end of the spectrum is cloud.

Legal cloud is inevitable — inevitable in the same way the wheel and craft beer and The Beatles were inevitable. The hallmarks of legal cloud — user-friendliness, accessibility, speed, transparency, security, scalability — are the answers that solve the problems associated with e-discovery. You could argue that existing cloud solutions are not yet mature enough to supplant on-prem counterparts, but it’s hard to make the case that, all things being equal, you wouldn’t want those qualities in a solution. They are innately superior.

But, of course, not all cloud software is created equal. Some, in fact, is not cloud at all. And what the LTN article does not address (the topic is outside its purview) is that there are many different types of companies, with different specialties and different focuses, even within the “cloud” space. Some, for instance, make on-premise software they’ve licensed from someone else remotely available to the end user via the internet (this is not cloud). Some are taking their complex on-premise software, deploying it in the cloud, and servicing it with a fleet of support staff and project managers (this is “vendor-in-the-cloud”). And some enable you to do parts of the e-discovery process — the search, for instance — in the cloud, but not others, such as the processing or the production.

In terms of focus, some cater to large, data-intensive matters, while others have attempted to create minimum viable products to make widely available to the “long tail” of the market at discount rates (Logikcull does neither of these). Some see e-discovery as a huge opportunity, and others can’t wait to burst out of that space’s narrowly defined constraints. Some benefit from the natural inefficiency of the legal market, and have embraced it. Others see that inefficiency as an affront to their very being.

It is argued in the LegalTech piece that the backward-looking nature of law and the risk aversion of its practitioners stifle innovation. Maybe. But another way to look at it is, if you are an innovative company, this industry is low-hanging fruit. This is the blank canvas to paint your Mona Lisa. And if you’re looking to spot the innovative companies, here’s a tip: they’re not the ones building better mousetraps, they’re wondering what else the mouse can be.

LegalTech News article: Standing Out from the Crowd for E-Discovery Newcomers