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Post by Stephen Embry, author of TechLaw Crossroads

So I’ve spent the past three days walking the exhibit floor at ALM’s LegalWeek18. Hundreds of booths; I frankly never knew there were still so many eDiscovery providers.

But one vendor caught my eye. Cloudlex advertises itself “as the only Legal Cloud built exclusively for personal injury law firms.” This got me to thinking. There are all these legal tech providers trying to sell tools to lawyers to make them more efficient. But most of the marketing dollars seem to be directed toward firms whose business model is the billable hour. In essence, these vendors are trying to sell something that, at least in the short run, reduces billable hours and revenue. Certainly it can be argued that these tools will make a big difference in the long run, but as Richard Susskind put it, it’s a little hard to tell a room full of millionaires that their business model is wrong.

But there is another group of lawyers that use a fundamentally different model. These lawyers use the contingency fee model: they get paid a portion of the verdict or settlement and don’t bill by the hour. To them, the less time is better and speed to final result is critical. And they analyze risk and profitability differently as well. Unlike the bill by the hour lawyers who even bid alternative fee proposals by using estimating the number of hours a matter would take and then padding the final number, plaintiffs’ lawyers value a case by thinking through such things what’s the case worth vs. how long it will likely take to get a settlement or verdict and who is on the other side. Anything that reduces the amount to time to do things and/or reduce the time to get to resolution puts money directly in these lawyers bank and increases bottom line profit. Likewise, any tool that helps them value a case and predict what the hoops that have to jump through to get to the money and be more efficient should be highly desired.

So I wondered whether legal tech firms are marketing to these guys and with what result.

I asked Brian Polt, the senior business development executive of Cloudlex, about this. He told me that he wasn’t aware of any other legal tech vendor directly marketing to plaintiff contingency fee lawyers and he certainly hoped my hypothesis was correct: any tool that helped these lawyers to value a case and get a task done faster should be golden. But as I walked the exhibit floor and asked vendors whether they were marketing to plaintiffs’ law firms, I got almost universally blank looks.

I also had a change to talk with Rip Clayton, president of Page One Legal, an eDiscovery provider. Rip told me he wasn’t aware of many vendors in this space either. Rip did have a chance to work with a plaintiffs’ contingency lawyer some time ago. He laughed and said he remembered it because the lawyer wanted him to work on a contingency as well.

We both agreed that the mind set of these lawyers is fundamentally different and was much more feast or famine. This in and of itself may mean they are reluctant to invest heavily in technology since the long term ROI may not be as clear to them. Most plaintiffs’ lawyers operate out of relatively small shops so manpower for working with the technology is a factor. As Polt observed, “many of them think they are just to small to use a lot of tech tools”. They also don’t have the same needs for technology from an eDiscovery standpoint (individual plaintiffs’ typically don’t have a lot of electronic documents)although they do often need to help shifting through what defendants drop on them.

I also asked Dan Linna, who created the Legal Services Innovation Index, about this. Dan’s index doesn’t really break out plaintiffs’ law firms from those using the billable hour model, but he agreed it would be interesting to see. Dan observed, though, that he thought there was a lot of marketing in the plaintiff PI space around legal funding and crowd sharing services, which as I have opined is poised to disrupt litigation and litigation economies. Polt agreed that this seems to be the biggest marketing push at plaintiffs’ lawyers conferences.

But certainly, any tech tool that enables a plaintiff lawyer to better compete with the large firms often on the other side should be valuable. But Polt, who regularly goes to plaintiffs” lawyers’ conferences, says its by and large a neglected but potentially huge market

Granted, the LegalWeek audience is by and large people associated with bigger law firms. But I see the same phenomenon at the ABA TechShow and ILTA conferences as well. So, while legal tech companies face obstacles marketing to billable hour model firms, they face different hurdles marketing to plaintiffs’ lawyers. On the other hand, it seems to me that as tech is adopted by these guys it should be easier to sell it to more mainstream players as well. Perhaps as lit funding becomes more established, some of the financial constraints faced by the plaintiffs bar will be reduced.  But I agree with Polt, contingency fee lawyers are a big market that more closely aligns with much of what legal tech is designed to achieve.

About Stephen Embry

I am a member of Frost Brown Todd LLC and the Firm’s class action, privacy and mass tort groups. I’m a national litigator and advisor experienced in developing solutions to complex litigation and corporate problems.  I am also a member of fbtTECH, my firm’s technology industry group that focuses on the future and anticipating the ways in which technology will impact the legal system and the issues facing clients. I write frequently on the impact of technology on the practice of law. I am currently Vice-Chair of the American Bar Association Law Technology Resource Center, an Editor of Law Practice Today Webzine and a member of the ABA’s Law Practice Futures Initiative. I am also Chair of the Data Breach, Privacy and Cyber Insurance Section of the Federation of Defense and Corporate Counsel. You can find me on LinkedInTwitterFacebookInstagram and Google+. I am also a frequent speaker and writer. In addition to practicing law and tech, my passions include education, and officiating swimming on national and local levels. I am a husband and proud father. And, finally, I bleed blue: I am unabashedly and unapologetically a huge University of Kentucky basketball fan.