Dispatches from ILTA: Tech Mergers, Google, and New Expectations

The International Legal Tech Association’s annual conference, ILTACon, wrapped up last week. During that week, there were lots of product announcements and no shortage of thoughts about the future of legal technology. Here are some takeaways from the conference.

The Voltron of Document Technology

One of the big announcements at ILTA was that four of the best-known document technology companies—Litera, Microsystems, XRef, and the Sackett Group—are combining. The announcement was so new that neither the name of the new organization or who will be the CEO has not yet been decided.

I had the opportunity yesterday to sit down with Paul Domnick, president of Litera, Linda Sackett, founder and president of the Sackett Group and Avaneesh Marwaha, president and CEO of Microsystems to talk about the new company and their vision.

Both Litera and Microsystems offer a packaged product, and both Marwaha and Dominick agreed the two companies were somewhat competitors in the document creation and management field. Both companies were committed to ensuring the creation, cleaning, proofing, and management of high-quality documents. The Sackett Group offered more document assembly tools and template solutions such as MacPac for Legal and Forti. Unlike Litera and Microsystems, it has historically offered a la carte products to its customers.

According to Marwaha, Microsystems has historically focused on the large firm markets. Domnick says Litera has focused on firms of all sizes. The Sackett Group also serves everything from one-third of the top 100 firms to very small firms and solos.

So why combine? Marwaha says that law firm customers want vendor consolidation and the companies believe that by combining they can better compete and scale.

Marwaha says that the goal is for the three companies to work together to envision better what a product will look like and what the branding will be. All three agreed that the vision of the new company is to make it easier for lawyers to create and deal with documents without having the software that helps them do it get in the way, In other words, the group wants software that’s not a hurdle and that works seamlessly and intuitively.

I asked the three, given the new company’s position in legal tech, what they thought the future of law would look like. They all agreed that successful future lawyers would still have to be good at practicing law and working with clients. Marwaha added that a good future lawyer would be one who knows how to use technology and software but doesn’t hide behind it. And according to Domnick, there is and will be a lot more disruption in the legal profession, but at the end of the day, the practice of law is a people business. Marwaha’s advice to future lawyers: focus on the client and partner with legal tech companies and software providers to do just that.

Look out, Legal Tech. Google May Be Coming

One of the more interesting developments of this week at ILTA was a low-key and not very well-attended demo of a Litera redlining program that will work with the Google Suite apps.

Apparently, Litera has been working with Google for some time in coming up with this program that works with Google Docs, Google Drive, and Google Calendar for businesses. Large companies like Whirlpool and Verizon have signed on to using the G-Suite for their business communications.

The legal departments of those companies have not been quite as happy, since some of the tools that they are used to using are not included. This left an opening for Litera to partner with Google so that many of its redlining, proofreading, and collaboration products will now work.

I asked Simon Dandy of Litera, who demoed the new product, if legal tech now had Google’s attention. Dandy said that at least based on Litera’s interactions with Google, the answer was a definite yes. And this could have lots of repercussions.

Think for a moment about Google’s search capabilities. It has mastered plain language searches, and Google’s analytics are among the best in the business. So imagine what would happen if Google could access tons of data presently housed by law firms internally or with providers like iManage or NetDocs. All of a sudden, data analytics and AI capabilities would explode. And think how seamlessly collaboration and communication could work if we were all using Google in our practices: a platform and software program that works so intuitively that we barely notice it.

Most of the problems lawyers have with technology is that it doesn’t work easily: you have to spend too much time figuring out what the tools are and how to use them. Google could simplify everything and allow us to use a program we have all been already using for some time, precisely because it’s so easy to use.

So stay tuned. We could be in for a Google-fueled revolution.

The Real Legal Disruption Is…Collaboration and Transparency?

One of the topics on everyone’s minds at ILTA was what clients expect in today’s technology-driven world. Not just big sophisticated clients, but smaller businesses and individuals as well. Technology and tech tools are used by everyone. It isn’t unreasonable to expect that your lawyer can do things as seamlessly and effortlessly as Facebook and Amazon can.

During ILTA I attended a panel discussion entitled “Collaboration: Improving the Client’s Experience.” On the panel were some heavyweights: Jason Barnwell, an assistant general counsel of Microsoft, Teresa Britton, manager of records for Exelon Corporation, a large energy company, and Jack Thompson, manager of litigation support for Sanofi, a French pharmaceutical company.

All three offered a candid description of what they expect of law firms. According to Barnwell, the kinds of firms Microsoft is looking for are those that show how they as a firm can do things better, can show to the client processes that work, and who by doing so add efficiencies and insights for the client.

Britton confirmed this: “We want our law firms to offer solutions on how to collaborate.” What does that mean? Firms that can offer things like portals and can provide value the client needs. Firms that can focus and be transparent. Firms that ask what the desired outcome is and what insights can be offered to get to that outcome. To Britton, this is real value (which may come as a shock to lawyers who think that only the outcome matters).

Barnwell’s comments were especially interesting given the size and power of Microsoft in the marketplace. I caught up with Barnwell after the presentation and asked him about the challenges he sees in the legal marketplace. Barnwell told me that he thought law firms have been slow to change the way they create and deliver legal services.  Barnwell and Microsoft believe that one of the reasons for this is the billable hour model. In fact, they so strongly believe that the billable hour model does not encourage the type of innovation and collaboration that Microsoft decided to move, over the next two years, to a fee model where some 90% of its legal work will be done via alternative flat fees.

The reason for this change, said Barnwell, is not that it will save money, but that it will force firms to collaborate and be innovative. Barnwell even went far as to say in the future, he assumes he will get a one-line bill, in the style of the old-fashioned “for services rendered” Another heavyweight, Cisco, estimates that 80% of its legal work will be based on alternative fees.

The expectation is that flat fees it will encourage lawyers to do better work because it’s what the client wants. In other words, he hopes that flat fees will focus lawyers to do the work that will get the job done and the desired outcome accomplished rather than focus on creating, say, the perfect brief and damn the costs.

Indeed, flat fees are game changers in many ways. In the late 1990s, I undertook a two-year national counsel representation on a flat fee basis. It changed my perception. I was forced to look at everything through a studied cost-benefit analysis. I was forced to constantly look for ways to be efficient, to save time, to look for innovations that would work. I loved it.

What I learned through this experience and what Microsoft and Cisco have realized is that there has to be collaboration and transparency between the lawyer and the client for these arrangements to work. The lawyer has to understand exactly what the client wants so the lawyer can focus on these things and not what the client doesn’t consider valuable. That’s how you make the client happy and, frankly, make money. Microsoft is now forcing this kind of collaboration.

I saw the same recognition of the value of collaboration when I talked to Bob Craig about his idea for the first ever Legal Blockchain Consortium. Bob, who is the chief IT officer of Baker Hostetler and one of the most astute observers of the legal tech scene, had the idea to create a consortium of corporate counsel, tech people and outside counsel to talk about blockchain, what it can do and where it can go. I asked Bob whether he thought law firms would be reluctant to participate since they might think they would be better off and get more business by going it alone. He responded: “By banding together we get more sophisticated collaboration around the table and new ways to engineer the process.” In other words, through collaboration, we get a better result for those who we represent, which ought to be our goal.

Sometimes we think about disruption in the practice of law as being all about such things as data analytics, artificial intelligence, and cognitive services. But maybe the real disruption is simpler but more profound: collaboration and transparency. These are things we haven’t been very good at for a long time. Indeed, one of the reasons we have the problems as a profession that we have (and why we are not held in very high esteem) is the lack of both of those. But it is collaboration and transparency that will let us take advantage of all the new technology in new, exciting, and valuable ways. And these simple concepts cost nothing and hold true whether you work for a 1000-person firm or are a solo practitioner.

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