InsideLegal

Hey Legal, What's the State of our Industry? ALM Intelligence Speaks

‘Pre’ Legalweek New York began today with various premium boot camp-style intensives but Tuesday’s ‘State of the Industry’ general session at 9AM (Grand Ballroom West) marks the official kick-off for Legalweek 2018. I had a chance to touch base with Steve Kovalan and Nicholas Bruch, both senior analysts with ALM Intelligence and tomorrow’s ‘state of the union’ session leaders.

Steve Kovalan
Senior Analyst, ALM Intelligence

Nicholas Bruch
Senior Analyst, ALM Intelligence

Check out this insightful Q&A before you head into the session tomorrow and you might be one of the smartest (but definitely most informed) folks in the room. I attended the 2017 session, really a useful, perhaps sobering way to kick-off the conference, and was constantly reminded that law firms are (still) lousy listeners when it comes to acting on as Kovalan and Bruch put it, the ‘changing field of play’, especially in terms of new competitors and evolving client demands. So as we head into this year’s session, the elephant in the room if you will is whether law firms have made any strides in terms of recognizing change and taking proactive measures to address increasing client as well as market demands?

IL: Before we dive into some of your findings, can you tell us a bit more about your research scope and focus for this project?

ALM: When we prepare for this presentation each year we try to do two things. Firstly, we reflect on what we are hearing from law firm leaders, law department leaders, and other leaders in the legal industry. We spend a lot of time talking to people in leading roles in the industry. It is important to us that this presentation reflects on those conversations and connects to the trends they are seeing in their own businesses and the narratives that we see forming out in the legal market which try to help explain why things are moving in the way they are. The second thing we do is take a deep dive into the data to help explain some of the trends and, when needed, debunk some commonly held beliefs that aren’t supported by the data.

IL: Last year, your state of the industry session was focused on three central themes: disruption, innovation, and revolution. How does 2018 compare in terms of focus areas? SK & NB: This year’s presentation certainly touches on the themes we discussed last year. Disruption is still a major conversation in the legal industry and you will see that trend continued in this year’s presentation. Our focus this year, however, is slightly different. We want to show people what the data says about the future of the legal market and provide a coherent view of where the legal market is heading over the next decade. IL: What are the top 3 significant data points, perhaps even ‘wow moments’ you will be sharing during your session?

ALM: Different parts of the audience will find different data points more compelling so we try to put something in the presentation for everyone. We suspect individuals from law departments and ASPs will find some of the insourcing data particularly compelling; the law firm audience will find the data on billing rates and GDP growth of interest and our analysis on the future of the legal market should be compelling and thought-provoking to all.

IL: You mention that based on your data analysis, the legal industry is undergoing a significant, if subtle, shift. What are you seeing?

ALM:  People tend to see things in extremes – either everything is changing or nothing is. That tendency is as true in the legal market as it is anywhere and you see it all the time. We're constantly hearing predictions about the “death of the hourly rate” or the “death of Big Law”. Our analysis suggests there is a shift happening in the legal market, but it’s not quite that dramatic. If we look at the legal market 20 years ago it was fairly straightforward – law departments managed the work and law firms did the work. This is obviously a generalization, but it is also broadly true. Law department’s primary task was deciding which law firms got what work and on what terms, while law firms did the vast majority of high and medium value work (and a fair amount of low value work). Today’s market is a bit more complex. Law departments still play the role of manager but law firms now share their market with in-house teams, alternative service providers, and increasingly, with the legal arms of The Big 4. The looming question for the future of the legal market is how all of this new competition is going to impact the space that law firms once owned. Many people seem to believe that the answer to that question is fairly straightforward – that law firms will lose market share at the expense of these new competitors. We believe the data suggests a slightly more nuanced outcome is more likely. We think some law firms will be highly successful. But we also believe that many will, indeed, loose share to new rivals. We think success in the future legal market will be based on a firm’s ability to provide a unique value proposition. Some firms will success because they have the scale to deliver services more cheaply. Others will succeed because they are profitable enough to buy the best talent. Regardless of the specific value proposition we strongly believe the market is moving to a world in which firms – whether they be law firms or ASPs – must be highly focused.

IL: Based on your analysis and insights, what major trends will be impacting the legal industry this year and further down the road?

ALM: 1. The Big 4: The Big 4 are coming for the legal market. The legal arms of the Big 4 are still largely underappreciated. We strongly believe that there is growing evidence that the Big 4 are targeting a position in the legal market which threatens law firms and traditional ASPs.

2. Consolidation: The consolidation we have seen in the legal market over the past several years is likely to continue and, probably, accelerate. We will see more law firm mergers and more ASP mergers. We believe it is highly likely that the Big 4 will go on a buying spree in the ASP market for example.

3.  Divergence: The data clearly shows that there is an ever-widening gulf growing in the law firm market. Law firms are growing more and more different from each other – in terms of profitability, size and operational models. We think we will see this trend continue and probably accelerate. In 10 years full-service law firms will look dramatically different from bet the company firms.

4.  Litigation Finance: The litigation finance trend has just begun and it is arguably one of the biggest and most exciting trends in the legal industry right now. It has the power to be a major force for change in the legal industry. It could, for example, spur new demand for litigation services (via an uptick in lawsuits). It could also spur changes in the way litigation is priced and managed.

5.  Law Firm Failures: We have seen quite a few law firm failures in the past years. Dramatic failures – with law firms going into bankruptcy – and less dramatic ones – with failing law firms “merging” into “white knight” firms. The data suggests this trend will continue and potentially accelerate. There is significant volatility in law firm financials. Many firms can withstand a single bad year – but few are in a position to withstand two or three bad years.

6.  CLOC Movement: We think the CLOC Movement – a term that we use to describe the changes going on in-house – will continue to evolve. Currently, it appears to be focused on in-sourcing. We suspect that will change in the coming years to a greater focus on vendor management and more sophisticated sourcing strategies.

IL: In 2017, you commented on the ‘changing field of play’ with various graphs and visuals. What are you seeing this year?

ALM: The trends we have seen on the client side – that we highlighted in the ‘changing field of play’ slide last year – have continued. Clients continue to report that they are in-sourcing more and that they are using ASPs more. We provide new data, particularly on the in-sourcing trend, in this year’s presentation. We're very optimistic about the future of the ASP market. In the short term, we think they have a lot of scope to grow in areas like litigation support, contracts, and due diligence. In the longer term, we think there are even more opportunities. We are less convinced about the future of the in-sourcing trend. The largest law departments may be able to effectively manage large portions of their legal work themselves. But we're not certain most departments will have the scale to compete with ASPs and law firms. We think in-sourcing is a transitionary step. As stronger alternatives grow, we suspect law departments will follow the direction of other support functions in large corporations. Most marketing departments, IT departments, and finance departments outsource large portions of their work. It is tempting to think law departments are an outlier – but we suspect they are not.

IL: Lastly, for anyone on the fence about attending your ‘state of the industry’ session on Tuesday at 9Am, what’s the one compelling reason you can give them to make this a ‘must see’?

ALM: The legal industry has gotten so large and complex over the past several years that it is easy to miss the forest for the trees. Many people live in their own bubble within the legal industry. Law firm partners are surrounded by other law firm partners. They might be highly aware of the trends within the law firm market and they probably know quite a bit about the law department trends as well. But, we suspect, most partners know very little about the happenings in the ASP world or the LegalTech world. The same can be said about individuals who work in ASPs, law departments, or LegalTech. This presentation is a chance to see the forest and the trees at once. To be able to see how the corner of the legal industry fits into the broader picture. We think that is incredibly valuable for most people, particularly business leaders. We are focused on what the data can tell us. We base our findings on imperial evidence, on analysis of large longitudinal data sets. Presentations like this one are meant to bring together some of our best research from the past year to provide business leaders with a set of facts to help them better understand the marketplace.

Get your Legal Week Tuesday started right by attending this state of the legal industry session at 9AM in Grand Ballroom West. 

 

InsideLegal’s 2018 Legaltech NY Word Cloud ... And 7 Year Flashback

Starting next week, we will join a few thousand people at what will be our 19th edition of Legaltech New York (LTNY). 2018 will mark the second year that LTNY is part of an expanded Legalweek format, with three days of exhibitions, networking and legal sessions.

 

If you've attended LTNY before, you may be familiar with our annual Legaltech NY Agenda Word Clouds that provide a visual display of the words/themes from the event's educational agenda and session lineup. If you aren't familiar with word clouds (you'd be surprised!), the larger words/phrases are the ones most often referenced in the agenda text and so on.

 

Let's take a look at InsideLegal's 8th annual Legaltech NY Agenda Word Cloud. To allow for comparison of this year's visual with the trends from past years, we've also included below the word clouds we created in 2017, 2016, 2015, 2014, 2013, 2012 and 2011. Take a look, click on the images to enlarge and compare for yourself. 

 

Remember: Click on images to enlarge

 

 

 

 

 

 

 

 

 

 

 

 

 

Subscribe to InsideLegal for LTNY updates and market information and follow us on Twitter at @InsideLegal for timely updates. 

 

The word cloud was pulled from the agenda located at www.LegalTechShow.com.

How Was Your Year? Legal IT Today Authors Chime in, Revel in Humanity

Happy New Year. While many of us are more than happy to leave 2017 in the rear view, we did want to point out some worthwhile content you may have missed at the tail end of last year. In late December, Legal IT Today (LITT), the quarterly publication published by the global legal technology news and resource site Legal IT Professionals, gifted us issue #20 chock-full of thought provoking articles including a Q&A-style section on 2017 musings and 2018 hopes. Several LITT 2017 contributors including me responded to four questions sharing their thoughts as we move from 2017 to 2018. I encourage you all to download and read the entire issue (and this article), but wanted to single out a favorite answer.

In response to "What's the most inspiring thing you have heard this year?", Hélder Santos, Senior Business Technology Manager, CMS Legal Services EEIG, highlighted something non-#LegalIT/business related but an amazing "this is why I believe in humanity" moment from the world of sports. He shared a moment from an April UEFA Champions League soccer/football match between Borussia Dortmund and AS Monaco which was postponed after a pre-game bomb attack near the Dortmund team’s bus. "The game had to be postponed at short notice until the next night, but many of the away fans from AS Monaco did not have an additional night’s hotel booking. Shortly after news circulated about the number of people stuck without a place to stay, the Twitter hashtag #bedforawayfans began trending, helping to connect marooned supporters with locals who opened up their homes to them. There was no official request or organization behind it, it was just an idea that sprang up among fan groups before spreading via social media. It ended up reaching far and wide," noted Hélder. 

I too am a passionate and dedicated soccer supporter and remember this moment like it happened today. As a German national, I was particularly inspired by the acts of kindness and goodwill being displayed by the local Dortmunders. I witnessed a similar situation closer to home here in Atlanta in December when a freak (and unplanned) power outage left 1000s of travelers stuck at the world's busies airport in Atlanta. After 5+ hours of being stranded, a out-of-town college football player who had participated in a bowl game the day before, started walking away from the airport looking for a close by hotel to spend the night. While on his trek, the young man was flagged down by a local news crew who had noticed him on the side of the road. They interviewed him about his experience, challenges and needs live on location at a local gas station. Within 10 minutes of the broadcast,  a number of local good Samaritans drove to the station to offer their help and resources to the cast-away. Again, a similar story to Hélder's, and more proof that 'social' is the new village and often humans don't get enough credit for being kind, selfless and generous. 

I toast to that and to more moments in 2018 that will inspire us to think, share and act.

If you aren't currently a subscriber to Legal IT Today, you are missing out. Legal IT Today is produced by the Legal IT Professionals team and edited by Jonathan Watson. It is a  truly international magazine packed with commentary, strategy and market intelligence. Sign up now for free digital subscription and to access past issues at www.LegalITToday.com.

 

 

 

 

2016 ILTA/InsideLegal Technology Purchasing Survey Released!

International Legal Technology Association (ILTA), and InsideLegal, the insider’s guide to doing business in legal technology, today released the findings of the “2016 ILTA/InsideLegal Technology Purchasing Survey” (survey). The survey, which is distributed to all ILTA member law firms, includes detailed technology budget data; updated information on firms’ purchasing influences and patterns; legal IT department trends and challenges; and expansive sections on specific legal technology purchases – both last year’s and those planned for the upcoming year. 2016 survey findings were presented to the vendors at the ILTA/InsideLegal’s Vendor Education Program at ILTA’s Annual Conference, ILTACON, taking place at the Gaylord National Harbor, August 28-September 1, 2016.  

2016 ILTA/InsideLegal Technology Purchasing Survey highlights include:

BUDGETS

• 53% of all respondents cited increased budgets, a 12% growth rate compared to 2015. 39% of Small Firms (1-49 attys), 38% of Medium Firms (50-199 attys) and 23% of Large Firms (200+ attys) represent the increase.
• 60% of all respondents spend between 1-3.99% of total firm revenue on technology.
• 24% of respondents spend between 4-5.99% of total firm revenue on technology.
• 22% of all respondents spend between $5,001-$8,000 per attorney on technology, followed by 20% who indicated spending $8,001-$11,000. 77% of survey respondents spend less than $17,000 on technology per attorney.

PURCHASING

• The top five technology purchases in 2016 include: desktop hardware/PCs (61%); laptops/notebooks (59%); network upgrades/servers (53%); printers/multifunctional devices (44%); and antivirus/antispam/spyware software (44%).
• The ‘next five’ purchases include: Disaster Recovery/BC software & services (41%); security/network security/security assessment (40%); Smartphones (38%); cloud storage (34%); storage area networks (SAN) and telephone systems/upgrades (both 28%).
• Microsoft Office 365 purchases increased to 16% (from 13%).
• 17% of survey respondents purchased analytics software within the last 12 months, an 11% increase over annual purchases in 2015.
• OS upgrades: 32% of all respondents are planning to upgrade within the next 12 months versus 16% in 2015.
• Cloud storage: 25% of all respondents are planning to upgrade within the next 12 months versus 15% in 2015.
• Newly added application/service areas included security awareness training services, software and content (27%); security monitoring services for the network (27%); and artificial intelligence technology (3%).
• Internet research, peer recommendations, ILTA conferences, consultant recommendations and ILTA e-Groups are the top five influences when it comes to making legal IT purchasing decisions.

OUTSOURCING, TRENDS, CHALLENGES

• 70% of all survey respondents outsource printer repair/maintenance; website design and services (69%), followed by security assessment/penetration testing services (59%).
• 11% of respondents are currently evaluating artificial intelligence technologies.
• When asked how AI will influence legal, respondents mentioned eDiscovery (71%), document automation (41%), legal research (41%), contract analysis/automation (34%), and case/outcome predictions (24%).
• According to survey respondents, most firm BYOD policies cover Smartphones (68%) and tablets (57%) with only 24% covering laptops.
• Firms’ top IT challenges include security management (67%), user adoption/lack of training (42%), risk management/compliance (40%), and email management (39%).
• 80% of this year’s respondents reported that they use outside technology consultants to assist with some aspect of firm operations, technology and infrastructure.

The entire 2016 survey report can also be downloaded at www.InsideLegal.com. For questions and comments regarding the analysis and results, please contact Jobst Elster.

Legal Leaders. Legal Winners

Spring has Sprung and so has the legal/legal IT award season. While most legal associations, related special interest groups as well as many vendor user conferences have some sort of an award program, there are a handful more than worthy of a shout out.  
  

ABA honors Jeffrey M. Allen with its 2016 Lifetime Achievement Award

The American Bar Association Solo, Small Firm and General Practice Division honored our longtime friend, Jeffrey M. Allen with its 2016 Lifetime Achievement Award, which recognizes the efforts and accomplishments of outstanding solo and small firm practitioners as well as bar leaders and associations. Allen will receive his award at the Solo and Small Firm Awards Luncheon on Friday, May 13, during the 2016 Joint Spring Meeting. 

We have known and worked with Jeff for the last 15+ years so we were more than excited to read the ABA's announcement recognizing his contributions to the legal space. Allen has been a member of the American Bar Association since 1973 and has been active in the GPSolo Division for most of that time, holding several leadership positions in the last 34 years, making him the member with the longest standing record of continuous leadership service to the division. He has chaired many substantive and administrative committees for the division and currently serves as the editor in chief of GPSolo Magazine and the GPSolo eReport. Allen also serves on the council of the Senior Lawyers’ Division and as a member of the editorial board for Experience Magazine and the Voice of Experience. Allen also served on the editorial board of the ABA Journal for six years and as a member of the ABA Standing Committee on Technology and Information Services (SCOTIS). Allen has written hundreds of articles on technology and legal practice and regularly writes for several magazines, including GPSolo Magazine, Experience Magazine, the American Journal of Family Law and the GPSolo eReport.  

ACEDS awards eDiscovery visionary Craig Ball, Esq. with ACEDS Lifetime Achievement Award

The Association of Certified eDiscovery Specialists (ACEDS) recently announced the winners of the 2016 ACEDS Awards, marking the organization's second annual celebration of eDiscovery professionals and experts. The nominees, who were nominated by their peers, were all pioneers and innovators in the e-discovery industry and are dedicated and committed to advancing the profession and remaining at the forefront of technology advancements, education, and training. 

Among the 2016 award winners, our legal tech friend and colleague Craig Ball was honored for his "lifelong commitment to the advancement of the eDiscovery profession." Well deserved. Craig has been an eDiscovery 'guiding light' since we've been around legal (17+ years) and even long before that. You don' t need to read his long list of accolades and credentials to quickly realize he knows his stuff. No matter how busy, he'll take time to say hello and lend his expertise where applicable.

InsideLegal's JoAnna Forshee named on ABA LTRC’s Women of Legal Tech 2016 list

In keeping with the spirit of progress, the ABA Legal Technology Resource Center recently presented its inaugural “Women of Legal Tech” for 2016. From tech founders and CEOs to small business owners, the list, with the addition of 10 new honorees in 2016, now includes 50 female legal influencers. JoAnna Forshee, my partner in crime and InsideLegal & Envision Agency CEO, was deservedly included in this year's list, further adding to her legal 'trophy case' [she was also the recipient of the 2004 Lex Proficio Award for Lifetime Achievement in the Advancement of Legal Marketing awarded by Ross Kodner and a 2015 Fastcase 50 honoree].

 

Upcoming legal tech awards to keep an eye on include the Fastcase 50 (July), ILTA's Distinguished Peer Awards (late August at ILTACON) and the College of Law Practice Management's InnovAction Awards (honored at Futures Conference in September).

 

Thinking Out Cloud

Once the grandparents start telling you to check out the newest family photos they uploaded to the cloud, you know cloud computing has hit Main Street.

Cloud technologies are not only changing the consumer game, but increasingly making headlines within the legal community. Thus, the creation of the Association of Legal Administrators' (ALA) Legal Management magazine's newest addition, my "Thinking Out Cloud" column. The bi-monthly column will deliver insights into legal cloud computing trends and futures; showcase law firm cloud adoption and real world use cases; address cloud computing security and governance issues; navigate popular law firm cloud apps and services; and interview leading legal cloud computing minds.

The inaugural column "Cloud Security ... A Competitive Advantage" appears in the March issue. We also recorded a corresponding Legal Management Talk podcast on the topic. Consider it the lazy/mobile person's version of the article.

Here's what you'll discover when reading or listening:

• A few years from now, we won't be talking about cloud technologies, just tech solutions since everything will follow the cloud/SaaS model. Who still uses 'www' when describing a website?
• The security 'S' word is no longer a show stopper when it comes to cloud adoption in law firms.
• Law firm CIOs are realizing (some faster than others) that dedicated cloud providers are much more capable and equipped to handle cloud security and best evolve with the frantic pace of cloud security and compliance requirements.
• Law firms can 'off load' client mandated security technology audits to their cloud providers.
• By embracing true native cloud applications, firms will reap the benefits of the “one-to-many” cloud infrastructure as it evolves and improves through periodic updates. In essence, once in the cloud, the firm can virtually hitchhike, almost for free, on the rate of cloud innovation.
• The Legal Cloud Computing Association (LCCA) is on to something with its recently published Cloud Security Standards essentially designed to give legal professionals more peace of mind when selecting (and using) true cloud technologies. Beyond the column, check out this Legaltech News article on the LCCA standards including commentary from highly esteemed legal technology folks.

The next issue of Thinking Out Cloud will appear in May, focused on cloud apps and services legal professionals attending ALA's Annual Conference & Expo in late May can look forward to. Interested in Thinking Out Cloud? Drop me a line.

ABA TECHSHOW 2016: 10 Pre Tip-Off Highlights

The ABA TECHSHOW, edition #30, is taking place at the Hilton Chicago this week (March 16-19). The 2016 ABA TECHSHOW Planning Board is chaired by law practice management expert and Affinity Consulting partner Steven Best and features 18 educational tracks including 73 sessions, panels, plenaries and keynotes over multiple days. As past TECHSHOW attendees know, there are far too many sessions, events and conference extras to take-in, so here's our contribution of 10 to keep (or put) on your radar:

1. Meet the Chair:  The Digital Edge podcast hosts Sharon Nelson and Jim Calloway recently interviewed TECHSHOW 2016 Chair Steve Best to learn more about this year's conference, session highlights and hot issues affecting legal professionals. Check it out ... it's 20 minutes well spent. (And subscribe while you're there!)
2. Session Mania:  With so many sessions and so little time, here's a 'short' list of some of our faves:
   1. The Automatic Law Firm  (Thursday, 9:00-10:00am)
   2. Lawyers as Entrepreneurs: It's Not Just About Doing Business panel  (Thursday, 1:45-2:45pm)
   3. How to Hire Robot - Or Using Experts Systems in Today's Law Firm  (Thursday, 1:45-2:45pm)
   4. The Deep Dark Web  (Friday, 9:00-10:00am)
   5. TECHSHOW 2016 Keynote Cindy Kohn  (Friday, 12:45-1:45pm)
   6. Data is the New Oil - Lessons from Standard Oil, Smart Diapers, and Uber for Law Firms  (Friday, 3:45-4:45pm)
   7. 60 Tips, Tricks, Gizmos, Gadgets and Sites in 60 Minutes  (Saturday, 11:30-12:30pm)
3. Podcast Love Fest:  The Legal Talk Network (LTN) crew is going 'bigger and better' in 2016 with a variety of TECHSHOW exclusives: 'Special Reports' is a series of podcasts recorded, produced and distributed directly from the expo floor, and 'Live from #TECHSHOW" streaming live interviews hosted by LTN podcasters Dennis Kennedy and Adriana Linares. The good folks at Legal Talk Network (booth 722) will also be live blogging and posting photos. Make sure to check out their TECHSHOW event page for details on podcast times, live streams and previous session podcasts.
4. Special Events and 'Extra-curriculars' have always been a hallmark of TECHSHOW and 2016 is no different. In addition to a 30th anniversary celebration on Thursday night and a new opening reception in the exhibit hall Wednesday night, there are four special events planned during TECHSHOW week. These include a 'Tech for Justice Hackathon' and a Legal technology Innovators Showcase on the 15th.
5. Meet the TECHSHOW Faculty:  Whether it's getting a snapshot view of all 72 speakers and their 2016 sessions or finding their social media channels, this handy, online Faculty Directory has it all. Detailed faculty bios can be accessed here.
6. ABA TECHSHOW Blog ... Walking Down Memory Lane:  The conference blog has really kicked into high gear this year including the notable post series 'XX TECHSHOW's Ago' which features conference chairs' reflections from year 1-30. Start with Don Hagans' '30 TECHSHOWs Ago' post from 1986 and work your way forward.
7. Taste of TECHSHOW:  The Taste of TECHSHOW Dinners have evolved into a definite conference value add over the years. When do you have the chance to dine with session speakers and conference attendees who share the same tech obsessions and interests as you? 20 separate dinners will be held Friday night and span an array of technology topics and application areas.
8. Conference Mobility:  The ABA TECHSHOW Conference App is available on multiple platforms and will help you map out your TECHSHOW plan. Download it now.
9. Social Media:  "Don't knock it till you try it." Follow #ABATECHSHOW or @ABATECHSHOW for the latest and greatest Twitter activity as well as our coverage at @InsideLegal. Also be on the lookout for loads of informative blog posts and live blogging throughout the week. 
10. 'A cloud is worth a 1,000 words':  This year we decided to emulate our annual LegalTech NY exercise of creating the first conference agenda word cloud for TECHSHOW in order to provide visual clues of what topics are hot and which ones are not.

For everything attorney tech education-related, ABA Law Practice Division's TECHSHOW won't disappoint. Check out the 12 page conference brochure before you enter the Hilton Chicago.

InsideLegal Partners with ILTA to Produce the 12th Annual Vendor Education Program Onsite at ILTACON

We at InsideLegal have been partnering with ILTA to co-produce the Vendor Education Program at the ILTA Annual Conference since 2004. For our twelfth year anniversary, we will be offering our popular "InsideLegal Market Flash Course" that outlines the best tips and advice for promoting your company to the legal space as well as bringing back our very popular session, "Advice for Selling to ILTA Firms". Don't miss the opportunity to hear directly from ILTA members the best way to market and sell to them leading up to ILTACON and throughout the year. As always, the program begins with Peggy Wechsler's Vendor Business Meeting covering any conference announcements and tips on how to work with ILTA throughout the year and ends with the release of the 2015 ILTA/InsideLegal Technology Purchasing Survey covering ILTA firms' purchasing habits and trends for the upcoming year. Please get your booths setup early on Monday, August 31st so you can join us at 1:30 in the Anzio room of Caesars for the 2015 ILTACON Vendor Education Program.

Vendor Education Program
[Monday, August 31st, 1:30-4:00pm in Anzio (Promenade Level, 3rd Floor)]

1:30 - 2:00 p.m.: ILTA Vendor Business Meeting
This session will include an opportunity to meet the ILTA staff and Board, receive an update on conference activities, and learn additional ways to work with ILTA throughout the year.
Faculty - Peggy Wechsler, ILTA Program Director

2:00 - 3:00 p.m.: InsideLegal Market Flash Course - How to Promote Your Company Within the Legal Space
We know how valuable your time is on-site at ILTA, so this rapid fire session will pack in industry statistics and legal marketing information. The program will include topics such as: legal market statistics; the one thing EVERY legal vendor should do…and it's free; where to get marketing research; stats on purchasing budgets and trends; and working with the legal media. Walk away with tips, tricks and legal resources you can use immediately.
Faculty - JoAnna Forshee, InsideLegal CEO & Jobst Elster, InsideLegal Head of Content & Legal Market Strategy

3:00 - 3:30 p.m.: Advice for Selling to ILTA Law Firms
Priceless advice from ILTA members on how to reach out to them and what not to do.
Faculty - Kevin Sullivan, Cohen & Grigsby Director of Technology

3:30 - 4:00 p.m.: 2015 ILTA/InsideLegal Technology Purchasing Survey Results
Last but not least, we will be reviewing the results from this year's ILTA member technology purchasing survey conducted by InsideLegal. The report includes data from 184 ILTA law firms of all sizes including: what percentage of firm revenue they spend on technology; what they purchased last year; what they will be purchasing next year; did their budgets increase or decrease; what vendors gave exceptional customer service; etc. Session attendees will receive a hardcopy report. View the 2014 Survey.
Faculty - Jobst Elster, InsideLegal Head of Content/Legal Market Strategy

Complete your setup early Monday and make sure to join us for the program. Please RSVP to JoAnna Forshee with name, title, company and email address for each participant.

Additionally, InsideLegal has added a link that pulls all their exhibitor resources and articles. Check it out! 

Furiously Innovative: 2015 'Fastcase 50' Award Winners

Award shows, 'best of show' galas and fancy award ceremonies are dime a dozen ... especially the legal community has its fair share of 'attaboys' recognizing any legal-themed superlatives you can think of. And there's the Fastcase 50, an annual no-strings attached recognition of entrepreneurs, innovators, and trailblazers — people who have charted a new course for the delivery of legal services, and are paving the way for new legal disruption by providing a first look at what’s next for law and technology.

The 2015 Fastcase 50 recognizes 50 such innovators bringing the total of '50ers' to 250 since the inaugural award in 2011. Legal tech 'heavy' and Fastcase 50 brainchild (and CEO) Ed Walters points out how much collaboration there is among honorees. “There are only 250 people who we’ve recognized, but the world of legal tech is a small town, especially in a time of social networks and conferences. Many Fastcase 50 winners from 2011 are working with honorees from 2014 and 2015.”

The Fastcase 50 class of 2015 again showcases the brightest and most 'rogue' and disruptive of what our law firms, law schools, legal think tanks, courts, bar associations, government legal and legal technology companies have to offer. First off, JoAnna Forshee, my long time colleague  and fearless leader of InsideLegal and Envision Agency, made the 2015 list for her 16+ years of service within the legal technology space. When she recognized a gap in information between legal technology providers and legal professionals over a decade ago, she created InsideLegal.com to serve as an online community and blog for legal pros about doing business in the legal technology marketplace. Also, JoAnna herself is no stranger to legal awards, having collaborated with legal legend Ross Kodner on the annual 'Dinner' a who's who of legal influencers for 7 years and co-producing the 'CityWealth 100' with editor Karen Jones in 2004.

And yes, there are 49 other just as deserving 2015 recipients representing law firms [11]; academia: universities, legal think tanks and incubators [8]; legal (technology) companies [16]; bar associations/state practice management advisors [9]; and government legal/judiciary [6]. 30% of this year's honorees are Founders and/or CEOs of their respective organizations.

InsideLegal congratulates all 2015 winners and is particularly proud and excited to share the stage with long time legal colleagues and influencers Laura Calloway, Director of the Practice Management Assistance Program at Alabama State Bar and Natalie Kelly, Director of the Law Practice Management Program, The State Bar of Georgia.

Legal Influencers Weigh In On Legal Technology Startups

Entering Startup. While you would probably pass right by Startup, a 4-square mile town in Snohomish County, Washington with a population of 676, the tidal wave of startup businesses and entrepreneurs hitting the legal shores is hard to ignore. We’ve all heard of the new, post 2008-recession ‘normal,’ and the legal technology startup scene is definitely a part of it. How big of a part? Is it just noise? An exciting distraction or a true disruption poised to change the legal game forever?

All intriguing questions … and ones that our esteemed colleagues at Legal IT Professionals asked us to address in the current issue (hot off the press today) of Legal IT Today (LITT). “Start me up … I’ll never stop” pulls back the covers on the legal version of the startup craze to better understand it. Who are the leading legal entrepreneurial minds? What are they looking to change? And how’s it going?

 

In the spirit of collaboration, we have reached into our treasure chest of legal influencers and crowd sourced some prolific commentary and opinions on the startup topic. Check out the LITT article for some of these gems and keep on reading for our ‘Legal Influencers Weigh In’ series, ‘Startup’ edition. We requested feedback on a multitude of questions including state and rise (or fall) of legal startups; current startups - fad, trend or true disruption? And, which startup apps and legal services are winning the race?

 

Startup trend = disruption in legal?!

On disruption in legal (and whether startups will lead this charge), David Perla, President of Bloomberg BNA Legal Division and Bloomberg Law offers a ‘big picture’ view. “The last decade has brought a methodical move toward efficiency, predictability and transparency across virtually every area of law. Since none of these areas has historically been core to lawyering, it’s been very difficult for the establishment to keep pace with market demands. The large number of startups that have been able to enter this space with little or no prior legal experience is impressive. However, few will affect real disruption, as the need increases for sophisticated (and capital-intensive) analytics technologies that can be deployed on the massive sets of unstructured data that permeate the profession.”

 

Perla adds: “Disruption has the potential to radically change how lawyers work and think about their clients, but it also requires significant capital and a keen understanding of how lawyers consume information. This is where startups will struggle. The massive capital needs and long time frame required are a mismatch for the funding sources currently investing in legal startups – angel, venture and strategic. As a result, most legal startups won’t make it – and change will come from the few that do, plus a handful of existing larger players with the requisite combination of capital and legal and technology prowess.”

 

We first took note of Fastcase and its CEO Ed Walters back in 2010, when the company announced its free legal research app for the iPad, a bold and innovative move. We asked Ed about the future of startups and what will occur first – further expansion of the startup landscape, consolidation or increasing dissolutions? “There will be *both* expansion and consolidation for the next two years. Venture funds now see the opportunity in legal tech. Legal services are broken – but change (intelligent agents, document automation and analytics) is coming. There will be ample capital available for attackers, and the market will expand. At the same time, the market will consolidate in two areas. Global publishers will continue to divest business units (even big ones) that don’t keep pace with international growth targets. And unless innovators can achieve both scale and profit in time, they will have to be acquired. If the stock market remains high, and interest rates stay low, there will be ample capital available for acquirers as well.”

 

State of the current legal (tech) startup space

Basha Rubin is the CEO of Priori Legal. Like many of her fellow startup founders, Rubin is a lawyer who identified a major gap between existing legal services and what she would want to access as a potential client. While Priori Legal is focused on high value business-attorney matchmaking, Rubin sees a lot of similarities between the large pack of startups: "We all have the same short term goal of changing behavior. As a community, we can all collaborate to change the way consumers and businesses source legal services and how these services are made more accessible." In terms of where startups are now, Rubin sees continued opportunities for growth. “We are still in the very early days with lots of room for innovation and legal problem solving.” According to Rubin, new entrants focused on law practice management, legal services marketplaces and legal research are bubbling to the top. Also, per Rubin, the April acquisition of Shake, a legal forms and agreements startup is “a big deal” and perhaps the sign of more M&As to come.

 

Dan Lear, Avvo’s Director of Industry Relations, blogger, legal technology meet-up founder and legal hacker, knows a thing or two about the startup growth path. "There is definitely a lot of interest in the space. It’s a combination of a well-performing technology sector combined with a fair number of out of work or underemployed, under-utilized, or just plain unhappy lawyers who are looking to do something different.” Lear notes we are at an inflection point with technology as well. “The cloud, mobile, greater broadband access and some interesting technological innovations are really opening peoples’ minds to some amazing possibilities.”

 

Rob Saccone, CEO of SeyfarthLean Consulting (SLC), leads a team of 35 legal service design and technology professionals focused on law department optimization and legal service design. SLC is a subsidiary of Seyfarth Shaw and operates across all types and stages of legal, risk and compliance work. “I feel like the window has passed for events such as LexRedux (a legal startup/investment event platform created by Rob, Josh Kubicki, and Dave Perla a few years back) or ReInvent Law. There was a wave of interest in activity which I feel has slowed down over the past several months, as startups shift into execution mode and buyers take a more practical and detailed look at their options. Some startups continue to do well, particularly in the B2C space, but activity is definitely down from what it was this time last year.”

 

SLC is still pushing ahead with legal innovation. “Seyfarth has made active investments in its captive innovation and R&D efforts for 10 years. We’ve invested in more failed attempts than most firms have invested at all, and our culture supports the ‘fail fast’ mindset to truly innovate and learn,” concludes Saccone.

 

Rise of legal technology and business of law startup companies

According to Dr. Roland Vogl, Executive Director of CodeX, the Stanford Center for Legal Informatics, “there is a new generation of savvy ‘lawentrepreneurs’ using existing web technologies to provide new options for corporate clients demanding more efficient delivery of legal services. At the same time, many startups are trying to find new ways to empower consumers, providing them with more affordable legal documents or legal advice.”

 

“Not all of these startups will succeed. Some will go out of business. Others will merge with competing startups. A few will be acquired by (or partner with) the large legal information companies. It's not clear whether there first will be consolidation between startups or acquisitions by larger companies, but I am quite certain that, five years down the road, there will not be dozens of players in the various legal technology ‘sub-verticals’ and application areas.” What’s next? “The next generation of legal innovation will likely develop from companies that provide ‘computable law,’ where technology can process legal rules and can automate legal decision making, or where contracts are smart and ‘operationalized.’ Computable law techniques will also embed legal information in the systems that we use every day (e.g., cars) and bring it to the person who needs it in real-time,” surmises Vogl.

 

Peter Ozolin, Manzama’s CEO & Chairman attributes the rise in legal startups to a few technology shifts. “Innovation Debt: in the period from 2004-2010, we didn’t see a lot of disruptive legal technology brought into the marketplace (other than small firm solutions). As a result, when new entrants like Manzama came along, there was a strong interest in new approaches from firms to develop business, largely fueled by the worst recession in recent memory, and a sense that it wasn’t going to be ‘business as usual,’ which meant that new methods and practices needed to be encouraged at the firms themselves. Secondly, cloud computing raised the potential for firms to consider new technologies at relatively low cost that, if successful, could easily displace enterprise applications that required more of a footprint both in terms of servers and people, as well as vendor support.”

 

Fred Cohen, CEO & Founder of Zola and Amicus Creative Media, groups the wave of new startups into three primary categories: “Uberification: Connecting idle legal resources with those that demand it, whether in a B2B or B2C context. An example is a service which enables business lawyers to make themselves available on demand as in-house counsel to small businesses. Specific technology (providing brilliant solutions to very narrow problems): Most of these are in the practice management space, such as services that enable clients to stay abreast of billable hours or ingenious task management solutions. The challenge with many of these tools is that they rarely work well with larger practice management solutions, so lawyers are often forced to do double data entry and deal with multiple applications, the burden of which may not justify the increased productivity afforded by the solutions. AI: Finally, the most interesting category in the legal tech space involves tools that leverage unprecedented computing power for artificial intelligence used to review legal documents. While many of these are at a very early stage, over time they could supplant attorneys - at least when it comes to many transactional matters.” 

 

Doug Caddell is the owner of Legal CIO Consulting LLC and former CIO of Foley & Lardner. He has spent the last 22+ years leading the technology efforts of various legal organizations, including mid-sized and large law firms and a governmental law department. During that time, he has witnessed several waves of legal technology innovation including the third and latest wave staring around 2011. So why the current rise? “New foundational technologies such as cloud computing and increasingly flexible programming languages have made it easier to develop products, and meet the needs of underlying changes to law firm business models created by the recession. The recession changed law firm economics and the market for legal services from a seller’s to a buyer’s market, putting dramatic pressure on law firms to become more efficient to meet client demands,” notes Caddell.

 

Dr. Rick Kabra, CEO of CosmoLex Cloud, sees the surge of legal technology solutions as a “…result of evolving technology making it possible to offer ‘next-generation’ solutions that significantly improve a lawyer’s daily work life. In the law practice management space, the first generation cloud based legal technology solutions handled only a single function (like billing or practice management). Now 2nd generation solutions offer multiple, integrated functions (such as billing & accounting & document management) - along with mature, dependable & secure mobile access - that is a much better fit to the way lawyers actually work. It’s a lot like how the mobile phone went from being a simple PDA type device to a smartphone performing dozens of useful tasks that have revolutionized everyone’s daily life.”

 

Stevie Ghiassi, Co-Founder of Australian-based Legaler believes “advancing the delivery of legal services” is a major startup priority, but there are two key areas that need the most attention – access and communication.” Ghiassi adds: “It is well documented that there is a monumental access to justice/legal services problem not just in the US, but globally. In the US alone, up to 80% of consumers are not able to access legal services for reasons such as complexity, affordability and sheer unapproachability. However, the lesser known fact is that poor communication is the main culprit in up to 90% of legal malpractice suits. Both figures are staggering and have no right to exist in this day and age of technology. History has shown startups can have a rampant and immense social impact in a very short time and it is now our responsibility to tackle these problems head on. Communication should be the lawyers’ biggest asset, not a sword to fall on.”

 

This concludes our legal startup ‘weigh in.' The LITT article along with this companion piece with additional contributors’ comments will hopefully get you thinking. Look us up, share with your peers and keep the conversation going. Also, if you don't already subscribe to Legal IT Today, sign up today to receive the free online subscription delivered directly to your inbox. Enjoy.