We’ve all been there before. You work with, or for, somebody who uses the same expression or phrase over and over again. It drives you mad. Yet one day you wake up and you have begun to use the same phrase that has now been burned into your brain. For me, one of those phrases is “pattern recognition”. A former boss used it all the time and my colleagues and I would roll our eyes and laugh about it. Yet I am now the one saying it to my colleagues — and to you.
“Pattern recognition,” involves drawing insights on how to better solve a problem/seize an opportunity based on past experience with similar patterns.
Since joining Vannin Capital to lead our business in North America, I have been surprised by how similar the patterns are in litigation and dispute financing to the patterns that our team at Bloomberg Law encountered in legal tech. Prior to joining Vannin, I knew that both litigation finance and legal tech served the same constituents: law firms and their clients. I also knew that Vannin and its competitors solve many of the same problems with capital that legaltech vendors solve with technology:
- How can law firms better differentiate themselves by leveraging assets such as capital and technology?
- How can capital and technology be used by smaller companies and firms to level the playing field against larger, better resourced organizations?
- How can capital and technology be used to help the players in the legal market function in a more efficient and logical manner?
What I have encountered since joining Vannin though, are the following similar patterns:
- Change Management: It is a common refrain amongst members of the legal community that are considering leveraging new technology and/or embracing new business models that law firms and their clients are slow to change. Change management is particularly difficult in the legal market given that attorneys and their colleagues are often time and bandwidth challenged and risk averse. The challenge is even more difficult at large law firms where decisions often are made by committees rather than by individuals. While change management isn’t easy, there has been a significant amount of change in both the Practice and Business of Law over the last two decades. The market evolution is accelerating due to, among other things, the need for firms to find ways to differentiate themselves and client demands for efficiency and transparency. Firms that are succeeding by leveraging technology and capital are addressing change management issues by leveraging internal champions and competitive information to demonstrate how others are succeeding with innovative structures, data and tools.
- The Keepers of Knowledge: Legal technology companies often work with the Chief Knowledge Officer and the Knowledge Management Organization. Looking through my legal tech lens, I viewed these organizations as being primarily focused on Technology and Research. However, since joining Vannin, I have learned that Knowledge Management is equally as relevant to innovative business models and uses of capital. Many firms have Professional Support Lawyers focused on litigation and other practice areas on their Knowledge Management teams. These lawyers advise internal clients on areas ranging from civil dispute resolution and internal risk management to providing guidance regarding innovation impacting both the Business and Practice of Law. This education process enables practitioners to be up to speed on the options available to them, whether those opportunities are driven by technology, data or capital.
- Growth: Differentiation is difficult in an industry that is commoditized due to the presence of a lot of very good lawyers, but firms need to differentiate themselves in order to drive growth. In the legal tech world, firms leverage data and technology to provide their clients with insights that go beyond advising on legal issues. In the world of litigation finance, firms are leveraging capital and innovative deal structures to provide their clients with multiple options. Litigation funders like Vannin help law firms grow by partnering with those firms on matters at an early stage that enables the firm to leverage the funders’ experience as a value add. Firms are highlighting access to litigation funding and relationships with funders in their BD efforts in a manner similar to how they have leveraged data and technology to differentiate themselves in developing business.
- Strategic Group vs. Service Group: One of the aspects of legal technology that appeals to in-house counsel is that it enables the in-house group to be a more strategic partner to the business. Litigation finance offers a similar opportunity. Corporations leveraging litigation financing are able to improve cash flows and P&L performance to turn their legal groups from cost centers to profit centers. By bringing forward these opportunities, in-house counsel add value as strategic members of an organization’s leadership team that goes beyond providing day to day legal advice.
- Data & Technology: Whether it be to make Practice of Law decisions such as which venue to choose or how to negotiate an agreement, or Business of Law decisions such as what practice areas and markets to invest in, firms and their clients are embracing data and technology as a means of getting to the right answer. Similarly, litigation funders are embracing technology and data to assess how strong a case is based on judicial benchmarking, strength of outside counsel, etc. in order to determine whether partnering with a firm or company on a case is the right business decision. The use of data and technology by all members of the legal ecosystem will only increase moving forward.
- The Diversity Conundrum: An unfortunate pattern that exists across the legal market is the lack of Diversity in senior leadership, whether it be at law firms, in house groups, legal tech or litigation finance companies. This not only applies to gender, but also to race, age, background, experience, etc. Without Diversity an organization is limiting the type of ideas and creativity that can drive it forward. Organizations across the legal industry have to do better on this front.
As the legal market continues to evolve, the firms, clients and vendors who are most likely to win are those that recognize these patterns and proactively apply their past learnings in order to seize opportunities and address challenges.
Scott Mozarsky is Vannin Capital’s Managing Director – North America with overall responsibility for Vannin’s North American business. Prior to joining Vannin, Scott was President of Bloomberg Law, leading Bloomberg’s business across the Legal Market. Prior to joining Bloomberg, Scott held a number of executive business and legal roles during a thirteen-year tenure in the United Business Media plc Group. Scott also spent eight years at two multinational law firms representing media, technology, telecommunications, insurance and manufacturing companies on business, financial and legal issues arising out of cross-border transactions.
