Skip to content

Exclusively Sponsored By

Case.one

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.

A briefing on the underlying technology, pursuant regulatory issues and realistic implementation pathways of Blockchain. The panel was moderated by Robert Brownstone, of Fenwick & West LLP, and featured Ryan Straus, of Fenwick & West; Theodore J. Mlynar, of Hogan Lovells, LLP; Nancy Liao, of Yale Law School Center for the Study of Corporate Law; and Pallab Cakraborty, a cybersecurity and privacy counsel and AI and legal technology thought leader.

Continue Reading #Legalweek18: FinTech Law & Regulation: Potential for Blockchain

Kaylee Walsted of ACEDS, in partnership with Relativity, recorded a live stream of Wednesday’s Legalweek panel, “AI to eDiscovery: Innovation in Legal Education.” The panel was moderated by David Horrigan of Relativty, and featured Honorable Xavier Rodriguez, US District Judge and Adjunct Professor of Law at St. Mary’s University School of Law; Mary Mack, of ACEDS; Daniel Martin, Associate Professor of Law at Chicago-Kent College of Law and Director of The Law Lab; William Hamilton, Professor and E-Discovery Project Executive Director at University of Florida Levin College of Law; and Laura Norris, Assistant Professor at Santa Clara University School of Law and Director of the Entrepreneurs’ Law Clinic.

[Original post by Stephanie Forshee of Law.com]

New apps and technology tools are changing the way companies do business and conduct discovery. But making sure these technologies are compliant and secure means combatting a “major disconnect between legal and IT,” according to Brett Tarr, legal counsel for Caesars Entertainment Corp.

Tarr, who heads the Las Vegas company’s e-discovery function, was among the panelists who spoke about “Using Emerging Technology to Execute Forensic Collections From Slack, Jira, HipChat and Other Cutting Edge Data Sources” during ALM’s Legalweek 2018 in New York.

“IT and legal speak different languages and have different priorities,” Tarr said during the discussion Tuesday afternoon.

Regardless, it is crucial for companies such as Caesars “to get the right people to the table,” including both IT and legal departments, Tarr said. From there, the two functions have to  evaluate how the technology could affect security and privacy and whether or not that level of risk is acceptable.

“It’s not about eliminating risk, it’s about managing risk and optimizing risk to get the best outcomes,” Tarr explained.

Though there are risks with any new app or technology, Tarr said, there are certainly benefits such as mobility, centralization of data and the ability to easily communicate with others. Companies need to be sure they know exactly what they’re collecting and which technologies their employees are permitted to use.

Calculating whether risks of any particular technology outweigh the benefits is an individual decision, he noted.

Like Tarr, Ruth Hauswirth, special counsel at Cooley, who also appeared on Tuesday’s panel, stressed how important it is for in-house lawyers to understand the types of data they are collecting.

She cited a case involving United Parcel Service Inc., as an instance in which a company had insights into its data and could use it to its advantage in court.

In Solo v. United Parcel Service, the plaintiff requested data on package-specific details for a period dating back to 2008. UPS’ lawyers, Hauswirth said, were able to come back and tell the court exact costs associated with fulfilling the request and why it would be too burdensome. Data collection for discovery was ultimately limited to a six-month period.

“They knew where their information was, how much it would cost. It was not just speculation [that] this is too difficult, this is too burdensome,” Hauswirth said. She explained that in this case UPS agreed to search for six months of time and revisit the request based on the information that came back for that period.

“When you’re making an argument in the discovery context, know your data,” Hauswirth said.

Stephanie Forshee

Stephanie Forshee

Stephanie Forshee is based in New York. She covers retail, fintech and in-house legal departments.

This morning’s Legalweek keynote featured a panel discussion about the state of fake news, and included Tori Ekstrand, a professor at UNC’s School of Media and Journalism; Charles J. Glasser, Jr. Esq., a professor at NYU’s Journalism School and former Media Counsel for Bloomberg L.P.; Stuart Karle, a professor at Columbia University Graduate School of Journalism and General Counsel for North Base Media; Aaron Sharockman, the Executive Director of PolitiFact; and Thomas J. Cafferty, the Director of Business and Commercial Litigation for Gibbons. The panel was moderated by Peter Canellos, the Editor-at-Large at Politico.

[Original post from Robert Ambrogi at Law Sites Blog]

On Monday, I blogged about the launch by ROSS Intelligence, the AI-based legal research platform, of EVA, a free product that analyzes briefs and performs various functions, including determining whether the cases they cite are still good law.

After hearing about EVA, the folks at Casetext — who have their own brief analyzer, CARA — challenged ROSS to participate in a “robot fight” here at Legaltech/Legalweek in New York, where both companies are participating. The challenge was to engage in a head-to-head comparison of the two products, live in front of an audience.

ROSS declined to participate, but Casetext decided to stage it anyway, creating their own EVA account and running the same brief through both analyzers to see how the two platforms compared.

I broadcast the robot fight on Facebook Live, and you can watch it for yourself below. The principle speaker you’ll hear is Jake Heller, founder and CEO of Casetext.

Post by Stephen Embry, author of TechLaw Crossroads

Steve Kovalan and Nicholas Bruch both of ALM gave an interesting opening presentation today at LegalWeek18 on the state of the legal market. They started by debunking the notions that traditional law firms are doomed by the irresistible forces of technology and innovation or, on the other hand, that traditional law firms will respond and are responding to these market forces and will always be strong.

Instead, they argued a point I have been making for some time: the law firm market is segregating into have and have nots. The theory is that there will always be room in the market for the law firms doing “bet the company: work that is so important or involves such exposure that price and efficiency don’t really matter that much.

On the other hand, the specialty, boutique firms will always be in demand. These firm are typically but not always small but are quite focused in the kind of work they do. I would throw into this category those locally oriented firms whose business model is to serve as local counsel for the bigger firms handling the bet the company matters. There will always be value, for example, for a lawyer who knows the judge handling a bet the company case well.

But these leaves, say Steve and Nick, the global full-service firms. These firms are at risk and subject to increased competition from themselves, the alternative legal service providers, the big 4 accounting firms and large law departments. These competitors are fierce and can do things in ways these big law firms can’t, be it through price or, in the case of the big 4, by offering a full menu of business services.  

I think Steve and Nick make a great point but would perhaps refine it just a bit. It’s a little simplistic to lump all global full-service law firms into the same boat. Many of the global firms perform a wide variety of bet the company work and a smorgasbord of specialty practices. These facts, together with the brand recognition should power the really big global firms into the future. Indeed, we are already seeking the global firms search out and acquire specialty practices in much the way that tech companies like Google and Apple find and buy startups for certain products. The big firms offer money and security to the boutiques in exchange for getting a profitable specialty practice.

No doubt these full service firms will face stiff competition but they also seem to be ones who are seeking out innovation to respond to the threats. They are evolving what the concept of full service means, aligning their offerings of service to competitive reality and profitability. These firms also have huge data banks on all sorts of issues they can massage and analyze. They are also learning how to collaborate data silos to compete more effectively. These firms, I predict, will survive and continue to be profitable although with maybe with fewer lawyers and different style and delivery models.

But that leaves a big middle. These are the relatively large full service firms that are not global, do not have significant national practices, are not players in large urban markets like New York, Chicago or Los Angeles. By and large these firms fall in the AmLaw 101-200 range.

These firms face the competitive threats identified by Steve and Nick but also from other places as well. From boutique practices for example. They face more competition from the really big global and national firms since office location is becoming less and less relevant in our increasing mobile society. They face extreme rate pressure from insurance and non-insurance companies who have discovered that the value added by these  firms is often not worth the cost.

High end work increasingly goes to the AmLaw 100 firms, lower end work increasingly goes to smaller and less costly firms or even to alternative service providers. These firms also  face declining work due to tort reform and other governmental programs. They face competition from firms using automation and technology to make much of the commodity document work related work much less costly. And increasingly AmLasw100 is recognizing this and making automation changes that let them use machines to do work more efficiently. And finally, the middle firms oftern don’t have the quantity of data of their larger competitors and often don’t know how to use what they had.

The other side of the coin is that the firms facing the biggest threatsthe middleare the least able or willing to do anything about it. Squeezed by profit pressure, they ruthlessly cut costs which means they are less likely to investigate and use automation and innovative tools. And because those tools in the sort run reduce billable hours in a declining market, these firms are even less likely to adopt them. They are less likely to hire professionals to manage knowledge and process for costs reasons and, sadly, because of traditional lawyer arrogance.

These middle firms also expanded rapidly in the boom years, making good profits often without using analytics to look at profitability and their human capitol long term needs. The result: they have too many partners and not enough work. And some of the work that sustained them is not terribly profitable. These firms also were slow to recognize the business realities and as a result, making hard decisions about long term partners and other personnel was hard for them. And while the global national firms aren’t the perfect models in dealing with these kinds of issues, they do have enough foresight and capacity to take more steps to deal with the future.

Put all this together and you have a perfect storm.  Are all middle firms like this? Clearly no. Some realize that they can with innovation, technology and mangement meet the competitive threats and take advantage of their cost structure. But too many of the middle firms are like the proverbial deer headlights syndrome. They don’t innovate because that could be expensive and result in short term profit reduction. They don’t reduce prune partner ranks. They stand still. And standing still in today’s market place is not a good business plan.

About Stephen

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.