Legal Technology And Innovation: 3 Key Points
Law firms and lawyers must embrace innovation, including new technology -- or suffer the consequences.
This summer, Above the Law will celebrate its tenth anniversary. Looking back over the past decade, one can divide up ATL’s history into three periods.
The first I’d call the Biglaw/gossip stage. From 2006 through 2010, ATL reported on the rise (the Simpson-led pay raise of January 2007, the Cravath-led “special” bonuses of October 2007) and the fall (layoffs, salary cuts and freezes, dissolutions) of large law firms. We also gave you lots of delicious law firm gossip (which we still offer today, even if it’s now mixed in with more sober fare).
The second I’d call the law school/career advice period. From 2010 through 2014, ATL chronicled the crisis within legal education — and warned our readers about the risks of going to law school, urging them to think carefully about this major life decision. We ramped up our career advice posts and our resources for prospective law students, current law students, and lawyers, launching our inaugural law school rankings in 2013.
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The third period, which we’re in the middle of, I’d call the Rise of the Machines. While we still cover Biglaw, gossip, law schools, and career advice, we have dramatically increased our coverage of legal technology and innovation, showcasing how technology is transforming both the practice and profession of law. We have amazing legal technology columnists who are, pound for pound, the best in the business when it comes to covering legal tech. (And, of course, we’re grateful for the innovative technology companies who advertise in our pages and make our work possible.)
One of the most innovative legal technology companies out there is Thomson Reuters. It’s most well-known among lawyers and law students for Westlaw, but it does so much more — as I learned when I attended TR’s Innovation Summit yesterday, where executives and technologists at Thomson Reuters briefed journalists and analysts on the company’s approach to innovation and particular products in the pipeline.
This post, the first in a two-part series, will take a “big picture” approach to technology and innovation in the law. The second post will focus more on specific products and programs. Here are three takeways about innovation from yesterday’s proceedings.
Susan Taylor Martin
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1. Innovation is essential.
Susan Taylor Martin, President of Legal for Thomson Reuters, began the conference by explaining how innovation is key to helping the company’s customers work more efficiently and confront the challenges they face in their organizations — challenges that are greater than ever.
Innovation and technology are transforming the lives and careers of white-collar workers just as they previously did for blue-collar workers. Both companies and individuals must adapt — or suffer the consequences.
In the legal business specifically, we’re looking at a buyer’s market (both in terms of in-house lawyers having leverage over law firms, and law firms having leverage over job applicants). Competition is fierce. In the wake of the Great Recession, companies have been reducing their spending on outside counsel and taking more of their legal spending in-house, especially when it comes to top concerns of general counsel like regulatory compliance and risk management. As a result, outside law firms must be efficient and cost-effective if they want to win business from corporations.
And that will require innovation. If your competitors are working more efficiently — thanks to advances like cloud computing, predictive coding, analytics and Big Data, and various software-as-a-service products — then you better tap into these technologies too, just in order to keep pace (to say nothing of excelling).
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Otherwise, you might go the way of Kodak, the now-defunct photography giant. As Martin explained, Kodak spent the 1980s stubbornly defending its old turf as competitors gobbled up market share using digital technology. Ironically enough, Kodak invented digital photography in the 1970s but didn’t really develop it commercially, seeking instead to protect its monopoly. In 2012, Kodak filed for bankruptcy.
2. Innovation requires integration.
Charlotte Rushton
Charlotte Rushton, Managing Director of U.S. Large Law Firms and Head of Innovation at Thomson Reuters Legal, echoed Susan Taylor Martin’s comments about the importance of innovation (in an equally awesome accent; both women are British, and Cambridge-educated to boot). Rushton talked about TR’s history as an acquisitive company, picking up “best of breed” companies in the legal space — Serengeti, Pangea3, Practical Law Company, and, of course, West itself — and then putting them under one roof.
But merely owning a bunch of great brands is not enough. To deliver innovation to clients, Thomson Reuters needs to integrate all of its offerings and make them work together seamlessly — something that clients have been requesting of the company in the wake of its acquisitions, and something that Thomson Reuters is determined to do better. This doesn’t mean that TR will stop acquiring great legal-tech companies, just that it has shifted its focus to integration and to internal development of new soutions.
Integration is, of course, a challenge for all the major legal technology companies, including Thomson Reuters competitors like LexisNexis, Bloomberg, and Wolters Kluwer. For more discussion of this subject, see Sean Doherty’s analysis of the Lexis/Lex Machina deal in our pages.
3. Innovation calls for collaboration.
As Rushton put it, “Innovation is not just about product, it’s also about process.” So Thomson Reuters is collaborating as it develops new products, working closely with both clients and other companies. Some of these collaborations might fail — but taking a page from the Silicon Valley innovation playbook, TR is ready to learn from any failures.
Rushton gave examples of several collaborations. First, Thomson Reuters works closely with its customers when developing products, so these products reflect what clients want and need. When TR developed WestlawNext, it worked in secrecy rather than collaboratively; customers were surveyed in advance about what they wanted in a legal research offering, but they weren’t an active part of the development process. But that was a different time, when law firms didn’t have the same pressures, the billable hour was still king, and technology advanced less rapidly.
Today, Thomson Reuters can’t develop products in a vacuum and hope that a product that went into development two years ago will still be relevant when it launches. For example, when the company developed its eDiscovery Point (to be discussed in the second post in this series), it worked closely with four outside law firms to make sure that its new ediscovery product reflected what they wanted in a platform. It uses boards of customer advisers for other products as well, taking feedback from clients to adjust the product along the way.
Second, Thomson Reuters collaborates with other companies on its offerings. It has entered into a multi-year agreement to use IBM’s Watson — you remember Watson, the Jeopardy-playing cognitive technology that has some document reviewers worried about their job security — to develop a host of new products. One of them is for the legal business, as explained by Bob Ambrogi in his account of the Innovation Summit:
TR Legal will be the first [Thomson Reuters unit] to release a product that has Watson “under the hood,” according to Eric Laughlin, managing director, Legal Managed Services and Corporate Segment, and head of the Watson Initiative. The product will help users untangle the sometimes-confusing web of global legal and regulatory requirements and will be targeted at customers in corporate legal, corporate compliance and law firms. Initially, it will focus on financial services, he suggested, but will also address other domains important to corporations.
Finally, Thomson Reuters works with academia. It currently collaborates with CodeX, the Stanford Center for Legal Informatics, making some TR data available to CodeX for use in an innovation challenge. (Shout-out here to CodeX fellow Monica Bay, our newest tech columnist at ATL.)
What products have resulted from all of this innovation and collaboration? I’ll discuss the new offerings from Thomson Reuters in part two of this series.
Corporate Lawyers Say They Are Spending More In-House [DealBook / New York Times]
Thomson Reuters Unveils New Platforms for E-Discovery and Legal Research [Law Sites]
