Outsourcing

Even the Coronavirus Can’t Stop Legal Tech Companies From Pushing Forward: eDiscovery Trends

Sure, the COVID-19 (coronavirus) is disrupting many things from eDiscovery industry events to web teleconferencing solutions to even Federal and State court dockets.  But, at least according to one article, legal tech “vendors” are still chugging along.

According to Bloomberg Law (Legal Tech Companies Push Forward Despite Virus Disruption, written by Sam Skolnik), legal tech vendors say they are unbowed in the wake of the coronavirus outbreak, and are so far keeping new product releases on schedule despite volatile markets and disruptions in how their law firm and corporate clients operate.

Even though some vendor executives recognize that a prolonged national emergency spurred by the virus could cause legal industry clients to reassess their need for new products and services, many in legal tech—especially larger, well-established companies—say disruptions to the pipeline to develop and implement legal technology caused by COVID-19 seem far away.  Examples:

  • Technology and legal services company UnitedLex isn’t delaying any product or service rollout as a result of the virus, CEO Dan Reed told Bloomberg Law in a statement. Digital is in our DNA and we are designed as an organization to deliver even with a primarily remote-first work model,” said Reed. “We continue to monitor and assess the situation and can wholeheartedly speak to our clients’ ongoing reliable access to business applications and information.”
  • Veritone, which offers artificial intelligence-enabled eDiscovery and transcription and translation services, said they haven’t seen a drop-off in work since the coronavirus hit. They say this is reflected by the new contracts they’ve signed with police department and advertising agency clients, as well as one legal client in a transcription matter.
  • For Ben Levi, co-founder and chief operating officer of InCloudCounsel, a legal tech provider, the outbreak has been “unprecedented” in some ways. Yet the pandemic hasn’t been as disruptive to his business as it could have been, he said, citing a strong company balance sheet and the fact that his team was already set up to work from home.  “We’re well-positioned to ride this out,” he said.
  • Orrick Herrington & Sutcliffe is still poised to roll out the next version of the Orrick Dashboard on May 1, according to partner Don Keller. The tool would enable the firm and its tech company clients to access clients’ corporate legal information and to collaborate.

CloudNine is also continuing to push forward with new software releases as well.  On Monday, we rolled out the latest release (version 1.08.05) of our Concordance Desktop product, which focuses on a brand-new document viewer (the first new image viewer in many years!) and related production and printing functions.  If you’re a Concordance Desktop client, you can download the new release here.

So, at least one thing – legal tech “vendors” churning out product releases – hasn’t changed in this very unusual time.

So, what do you think?  Has the COVID-19 pandemic changed how you use and purchase legal tech software?  Please share any comments you might have or if you’d like to know more about a particular topic.

Sponsor: This blog is sponsored by CloudNine, which is a data and legal discovery technology company with proven expertise in simplifying and automating the discovery of data for audits, investigations, and litigation. Used by legal and business customers worldwide including more than 50 of the top 250 Am Law firms and many of the world’s leading corporations, CloudNine’s eDiscovery automation software and services help customers gain insight and intelligence on electronic data.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

eDiscovery Markets Are Growing and Legal Tech Investments Are “Skyrocketing”. So, Who’s Buying?: eDiscovery Trends

No, I don’t mean who’s buying the drinks.  Though the growth of the markets and the growth in legal tech investment is certainly worth celebrating (especially for those who’ve seen their investments pay off).  ;o)  But what I’m asking is: who’s buying the technology?

First, the investment part.  As discussed earlier this week in Legaltech News® (As Legal Tech Investments Skyrocket, Startups Combat Tech Adoption Perceptions, written by Victoria Hudgins), it’s been a record-setting year for investments in legal tech, with the industry reaching the $1.2 billion threshold this year for the first time, according to Bob Ambrogi’s excellent LawSites blog.  And, that was as of the middle of September!

Hudgins has some excellent quotes from several C-Suite execs from legal tech companies that have received funding from investors and part of the tone of the article is the challenge associated with convincing investors that tech-averse lawyers will really buy the software.  As an example, Litify chief revenue officer Terry Dohrmann, whose law firm management software company raised $2.5 million in 2018 and $50 million last June, noted that there are differences in pitching legal tech to investors.

“The short answer is yes, there is a difference,” Dohrmann said. “A lot of that is driven by the universal acceptance that law firms are a little behind in adoption of technology.”

So, it’s the law firms that are fueling this growth in the market?  Maybe partially, but I’m not so sure they are the major factor.

As we’ve covered many times before, Rob Robinson on his terrific Complex Discovery site tracks the eDiscovery specific mergers, acquisitions and investments here (he’s got them all the way back to 2001).  By my count, we’ve had 44 such transactions so far this year (that we know of), with a total estimated amount (at least where amounts are available) of over $560 million, just for eDiscovery company investments.  And, that doesn’t include two investments of over $2.5 billion which have been announced, but not closed.  So, that $1.2 billion threshold could be shattered before year’s end.  Crikey!

Also, as we covered just last week, Rob presented his worldwide eDiscovery services and software overview for 2019 to 2024 on Complex Discovery last month and his annual “mashup” of industry estimates shows the eDiscovery Software and Services market is expected to grow an estimated 12.93% Compound Annual Growth Rate (CAGR) per year from 2019 to 2024 from $11.23 billion to $20.63 billion per year.  Here’s the combined eDiscovery markets for 2019 to 2024, represented graphically:

Of that, the eDiscovery Software market is expected to grow at an even larger estimated 13.05% CAGR per year from $3.39 billion in 2019 to $6.26 billion in 2024, growing about 85% in five years.  Here’s the eDiscovery software market for 2019 to 2024:

Which leaves the eDiscovery Services market, which is expected to grow at an estimated 12.88% CAGR per year from 2019 to 2024 from $7.84 billion to $14.37 billion per year.  Here’s the eDiscovery services market for 2019 to 2024:

Charts courtesy of Complex Discovery.

So, who’s buying?  Seems a lot of the technology is being purchased by the service providers, who are (in turn) using it to provide services to corporations, law firms and government entities, who are buying those services.  Obviously, corporations, law firms and government entities are buying some of the technology as well and law firms providing some of the eDiscovery services.  But, it seems like it’s the service providers who have the biggest impact on the growth of the market.  Do you agree?

So, what do you think?  Will the growth of the market and the “skyrocketing” investment in legal tech continue?  Please share any comments you might have or if you’d like to know more about a particular topic.

Sponsor: This blog is sponsored by CloudNine, which is a data and legal discovery technology company with proven expertise in simplifying and automating the discovery of data for audits, investigations, and litigation. Used by legal and business customers worldwide including more than 50 of the top 250 Am Law firms and many of the world’s leading corporations, CloudNine’s eDiscovery automation software and services help customers gain insight and intelligence on electronic data.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

It’s Time for Your Annual “Mashup” of eDiscovery Market Estimates!: eDiscovery Trends

The appearance of the mashed potato graphic can only mean one thing.  Nope, not that it’s Thanksgiving week (though, many of us will enjoy our mashed potatoes this Thursday).  It means that it’s time for the eDiscovery Market Size Mashup that Rob Robinson compiles and presents on his Complex Discovery site each year.

It’s become an annual tradition for Rob to release it earlier and earlier each year, and, this year, he released his worldwide eDiscovery services and software overview for 2019 to 2024 on November 12 (not quite before Halloween like I predicted last year, but still eight days earlier than last year, so it might happen next year).  ;o)

This is the eighth(!) year we have covered the “mashup”(!) and we can continue to gauge how accurate those first predictions were.  The first “mashup” covered estimates for 2012 to 2017 and the second one covered 2013 to 2018.  Last year, we took a look how close the estimate was for 2018 back then.  This year, we can look at the original 2019 with a look back at the estimates for 2014-2019 (in two parts).  We’ve also covered estimates for 2015 to 2020, 2016 to 2021, 2017 to 2022 and 2018 to 2023 and will undoubtedly look at those in future years.

Taken from a combination of public market sizing estimations as shared in leading electronic discovery publications, posts, and discussions (sources listed on Complex Discovery), the following eDiscovery Market Size Mashup shares general market sizing estimates for the software and services area of the electronic discovery market for the years between 2019 and 2024.

Here are some highlights (based on the estimates from the compiled sources on Rob’s site):

  • The eDiscovery Software and Services market is expected to grow an estimated 12.93% Compound Annual Growth Rate (CAGR) per year from 2019 to 2024 from $11.23 billion to $20.63 billion per year. Services will comprise approximately 69.7% of the market and software will comprise approximately 30.3% by 2024.
  • The eDiscovery Software market is expected to grow at an estimated 13.05% CAGR per year from $3.39 billion in 2019 to $6.26 billion in 2024. In 2019, software comprises 30.2% of the market and, by 2024, approximately 64% of the eDiscovery software market is expected to be “off-premise” – a.k.a. cloud and other Software-as-a-Service (SaaS)/Platform-as-a-Service (PaaS)/Infrastructure-as-a-Service (IaaS) solutions.
  • The eDiscovery Services market is expected to grow at an estimated 12.88% CAGR per year from 2019 to 2024 from $7.84 billion to $14.37 billion per year. The breakdown of the services market by 2024 is expected to be as follows: 63% review, 20% processing and 17% collection.

If we look at the original “mashup” that we covered for 2014-2019 (in two parts), the original eDiscovery Software and Services market estimate for 2019 was $10.56 billion, the original Software portion of the estimate was $3.38 billion and the original Services portion of the estimate was $7.18 billion.  So, the original software estimate was understated at .01 billion, while the original services estimate was understated by .66 billion.  Overall, that’s an understatement of .67 billion.  A reversal from last year, where all of the 2018 estimates were overstated from the actual 2018 numbers reported last year.

A couple of other notable stats:

  • The U.S. constitutes approximately 63% of worldwide eDiscovery software and services spending in 2019, with that number decreasing to approximately 58% by 2024.
  • Off-Premise software spending constitutes approximately 54% of worldwide eDiscovery software spending in 2019, with that number increasing to approximately 64% by 2023. That’s a considerably slower move to off-premise than previously forecast five years ago (78% by 2019).  So, on-premise software is still a significant portion of the software market and is expected to be for some time to come.

So, what do you think?  Do any of these numbers surprise you?  Please share any comments you might have or if you’d like to know more about a particular topic.

Sponsor: This blog is sponsored by CloudNine, which is a data and legal discovery technology company with proven expertise in simplifying and automating the discovery of data for audits, investigations, and litigation. Used by legal and business customers worldwide including more than 50 of the top 250 Am Law firms and many of the world’s leading corporations, CloudNine’s eDiscovery automation software and services help customers gain insight and intelligence on electronic data.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

Firm IT Director Predicts “Carnage” in Legal Tech Consolidation: eDiscovery Trends

Not since Clubber Lang predicted “pain” in Rocky III has the state of legal tech consolidation been stated quite this way.  Is that good news or bad news for consumers of legal tech software and services?

As reported in Legaltech News (Consolidation is Inevitable in Legal Tech, Says Firm IT Director, written by Simon Lock), major consolidation within the legal tech market is unavoidable, according to the director of IT at international law firm Osborne Clarke.  That’s probably because it’s already happening as we speak…  ;o)

Speaking at Legal Week’s Strategic Technology Forum, Europe in Spain, Nathan Hayes said that the most successful legal tech ventures would not come out of one specific institution but instead via amalgamations and joint ventures between traditional law firms, accountants and legal tech firms.

“It’s not going to be one of those, it’s going to be a merging of them,” Hayes argued.

“We’re already beginning to see law firms buying up legal tech companies; law firms partnering with academia and legal tech, having stakes in them, investing in them,” he said. “I think we’re going to see different entities evolving rather than these siloed organisations.”

“We’re in a situation where we’ve just seen a massive explosion in legal tech which is great,” said Hayes.

“The carnage that will ensue though, there’s going to be a lot of consolidation, which is going to be incredibly helpful for people like me.”

Yes, he actually referred to it as “carnage”.

Stephanie Hamon, the former managing director and head of external engagement at Barclays, also expected greater collaboration to follow.

“The market is highly fragmented, so when you’re on the client side, you get solicitation all the time and it’s really hard to see the wood from the tree,” she said.

“It’s true for the law firms, and it’s even worse for legal tech.”

Also this week, Rob Robinson posted the eDiscovery Mergers, Acquisitions, and Investments in Q2 2019 on his excellent Complex Discovery blog.  Rob notes that there “have been at least 12 M&A+I events in the eDiscovery ecosystem during Q2 2019”.  That’s the second most in Q2 in the last five years – only last year with 15 events had more.  That’s after this Q1 had the most events in the past five years for Q1 with 15 events and last year’s Q1 was the second most with 14 events.  So, if that doesn’t show that the pace of M&A+I events is accelerating, I don’t know what does.  “I pity the fool” who doesn’t see that!  ;o)

So, what do you think?  Do you predict “carnage” in the consolidation of legal tech companies?  As always, please share any comments you might have or if you’d like to know more about a particular topic.

Image Copyright © United Artists

Sponsor: This blog is sponsored by CloudNine, which is a data and legal discovery technology company with proven expertise in simplifying and automating the discovery of data for audits, investigations, and litigation. Used by legal and business customers worldwide including more than 50 of the top 250 Am Law firms and many of the world’s leading corporations, CloudNine’s eDiscovery automation software and services help customers gain insight and intelligence on electronic data.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

My Guest Post for Complete Legal: eDiscovery Best Practices

You might think that since I write a daily blog, I have no time to do any other writing on the side.  And, a lot of times, that’s true.  However, I wrote a guest blog post recently for our good friends and Kansas City partners at Complete Legal and so I’ve decided to point to that blog post for today to give our readers a chance to read that post.

The blog post is titled Leveraging Your Services Provider to Meet Today’s eDiscovery Challenges: eDiscovery Best Practices and it’s on Complete Legal’s site here.  We’ve been partners with Complete Legal for several years and have worked with co-founders Jeff Dreiling and Eric Kelting for several years before that.  In the post I noted that in this era of automation in eDiscovery, you might think that the need for eDiscovery services is dwindling, but nothing could be further from the truth – the need to partner with an experienced eDiscovery services provider to ensure a successful outcome to your case is more important than ever.

I covered several topics in the post, including some interesting statistics that illustrate that the demand for eDiscovery services is as strong as ever, why you need an eDiscovery provider, making sure you select a provider with the right experience, getting your eDiscovery “geek” involved early and often, working with your eDiscovery service provider as a partner (not as a vendor) and how familiarity breeds “content” – which is to say that developing a comfort level with the right vendor can be a beautiful partnership that lasts for years.  That’s something we can all appreciate!

Again, the post is here, so please check it out!  Consider it today’s post, just in a different place.  See what I did there?  Sneaky, huh?  :o)

So, what do you think?  How do you work with your eDiscovery services provider?  Please share any comments you might have or if you’d like to know more about a particular topic.

Sponsor: This blog is sponsored by CloudNine, which is a data and legal discovery technology company with proven expertise in simplifying and automating the discovery of data for audits, investigations, and litigation. Used by legal and business customers worldwide including more than 50 of the top 250 Am Law firms and many of the world’s leading corporations, CloudNine’s eDiscovery automation software and services help customers gain insight and intelligence on electronic data.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

Investment is Changing the eDiscovery Market as We Speak: eDiscovery Trends

Yesterday, we talked about how eDiscovery business confidence seems to tend to take a downturn every summer.  But, when it comes to private equity firms’ investment in eDiscovery companies, eDiscovery business confidence seems to be stronger than ever.

As reported in LegalTech News (E-Discovery Market’s Demand Attracting More Investors Than Ever Before, written by Rhys Dipshan), the author notes that over the past few years, private equity firms have invested in over a dozen eDiscovery companies.  Since January 2018, have played a leading role in reshaping the eDiscovery market.  Some examples:

  • Xact Data Discovery was acquired by private equity firm JLL Partners in January 2018;
  • San Francisco-based private equity firm GI Partners was behind the March 2018 merger of Consilio and Advanced Discovery;
  • In October 2017, Knox Capital led a funding round for eDiscovery and forensics provider HaystackID, which then supported HaystackID’s April 2018 acquisition of Envision Discovery and Inspired Review;
  • In late May 2018, another New York City-based private equity firm, Leeds Equity Partners, also moved into the e-discovery industry by investing in Exterro. While the exact investment amount was not disclosed, Exterro told Legaltech News it was a “nine figure deal”;
  • And yet another private equity firm, Peak Rock Capital, invested in eDiscovery company (and sponsor of this blog) CloudNine and helped fund its March 2018 acquisition of the LexisNexis eDiscovery product suite. A spokesperson for Peak Rock Capital said the firm invested in the CloudNine because it “saw great potential in CloudNine as a high growth software-as-a-service provider of processing and review solutions.”

So, what’s behind private equity’s appetite for all things eDiscovery? The author states that “[a]t its core, it stems from private equity’s belief that demand for e-discovery technology and services remain strong for years to come.”

Private equity firms seem not to be too worried that their eDiscovery picks will be crowded out of the market anytime soon. Peak Rock Capital, for instance, believes that there “is ample demand in the growing e-discovery segment. There’s been consolidation on the services side, but the market is quite large, and we continue to see robust demand from new customers.”

As I’ve noted several times on this blog, a great resource for a list of mergers, acquisitions and investments is Rob Robinson’s Complex Discovery blog where he lists industry transactions back as far as November 2001 – which is even before Kroll acquired Ontrack!  Now, both names are absorbed in acquisition.  We’ve certainly seen several large transactions over the years, but if you look at the most recent transactions (since May 1, 2018), we have at least three “nine figure deals” in the last nine months.  That’s big business!

So, what do you think?  Are you surprised in the amount of investment in the eDiscovery industry?  Please share any comments you might have or if you’d like to know more about a particular topic.

Sponsor: This blog is sponsored by CloudNine, which is a data and legal discovery technology company with proven expertise in simplifying and automating the discovery of data for audits, investigations, and litigation. Used by legal and business customers worldwide including more than 50 of the top 250 Am Law firms and many of the world’s leading corporations, CloudNine’s eDiscovery automation software and services help customers gain insight and intelligence on electronic data.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

Public or Private Isn’t the Only Question You Should be Asking about Cloud Solutions: eDiscovery Best Practices

In yesterday’s post detailing the discussion of industry experts regarding the adoption of cloud technology within the legal industry, several points of discussion were discussed, including the differentiation between “public cloud” and “private cloud”.  It’s important to know the difference between the two implementations and why you might consider selecting one over the other (and what you need regardless of which one you select).  But, public or private cloud isn’t the only question you should be asking about a cloud solution.

To begin to understand what we’re talking about, it’s important to define three terms typically related to cloud computing: Infrastructure as a Service (IaaS), Platform as a Service (PaaS) and Software as a Service (SaaS):

  • Infrastructure as a Service (IaaS) is a service model that delivers computer infrastructure on an outsourced basis to support enterprise operations. Typically, IaaS provides hardware, storage, servers and data center space or network components.
  • Platform as a service (PaaS) is a category of cloud computing services that provides a platform allowing customers to develop, run, and manage web applications without the complexity of building and maintaining the infrastructure typically associated with developing and launching an app.
  • Software as a service (SaaS) is a software distribution model in which a third-party provider hosts applications and makes them available to customers over the Internet.

This diagram, courtesy of the site virtualclouds.in, does a good job of illustrating examples of each.

As you can see, the software application residing on top of the cloud platform and infrastructure are separate and unique and don’t necessarily have to be from the same provider.  Sometimes they are, like in the case of Office 365 hosted in the Microsoft Azure platform; other times they aren’t, like in the case of Salesforce.com hosted in Amazon Web Services (AWS).

Here’s another diagram, courtesy of YourDailyTech, which illustrates the different components to the solution and what you manage in a) an on-premise implementation, b) an IaaS implementation, c) a PaaS implementation and d) a SaaS implementation.

As you can see, there’s a lot of components to manage.  A lot of organizations are managing many (if not all) of those components anyway to support various internal needs for their organizations, but many organizations are turning to IaaS, PaaS and SaaS implementations for at least some of their solution choices.  The choices they make are based on several factors, including costs and security requirements.  There’s no right or wrong answer here – each choice can be appropriate depending on the organization and its needs.

However, you know the saying that a chain is only as strong as its weakest link?  Well, that holds true for cloud solutions as well.  Whether you favor a public cloud or a private cloud approach, you still have to vet the software provider on top of that public or private cloud infrastructure.  Obviously, when evaluating comparable software solutions, it goes without saying (but I’ll say it anyway) that you should look at the features of the different solution choices and evaluate them against the needs of your organization.

But, you shouldn’t stop there.  You also want to evaluate the companies offering the different solution choices as well.  How long has each company been in business?  What’s the average tenure of their top leadership team?  What’s the average tenure of their support and services teams?  You don’t want to select a “fly-by-night” company that could be gone tomorrow or a company that has a “revolving door” in key positions where you’re continually dealing with someone new in support or services.  Familiarity breeds…comfort – not contempt (at least when it comes to a cloud SaaS provider).

So, what do you think?  How closely do you vet the SaaS company providing the solution in a cloud solution selection?  Please share any comments you might have or if you’d like to know more about a particular topic.

Sponsor: This blog is sponsored by CloudNine, which is a data and legal discovery technology company with proven expertise in simplifying and automating the discovery of data for audits, investigations, and litigation. Used by legal and business customers worldwide including more than 50 of the top 250 Am Law firms and many of the world’s leading corporations, CloudNine’s eDiscovery automation software and services help customers gain insight and intelligence on electronic data.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

The Speed of Migration of Legal to the Cloud is Debatable: eDiscovery Trends

How fast is the legal industry moving to the cloud?  And, what is holding some law firms back from migrating to the cloud?  These and other questions were discussed in a recent online discussion among industry experts.

In an article sponsored by ReplyAll on Bloomberg Law (Live Conversation: Making Sense of Legal’s Migration (or Not) to the Cloud), Zach Abramowitz moderated the discussion and introduced the topic as follows:

“The migration of the legal industry to the cloud has been, much like the word migration would suggest, slow and deliberate. Although Fortune 500 companies are using cloud based technology to track everything from their back office to their marketing and sales teams — and (as anyone who’s been through an airport can tell you) all the biggest tech companies in the world like Microsoft, Amazon and Alibaba are competing to offer you cloud storage and related services — many law firms are still insisting on keeping client data behind the firewall… Many of the best legal technology start-ups tell me that their #1 obstacle in selling their product is law firm resistance to the cloud. So, as we kick off this conversation, the question I’d like to start tackling today, is what should be the industry standard (we can discuss that too), but also begin by trying to better understand the disconnect between law firms and the rest of the world. With all the information available, is it rationale for law firms to still hesitate when it comes to the cloud?”

Panelists included:

  • Alma Asay, Founder of Allegory which was acquired last year by Integreon (where Alma is now the Chief Innovation Officer)
  • Dan Baker, Chief of Staff and Director of Legal Operations at Ancestry.com
  • Adam Cohen, Managing Director at Berkeley Research Group
  • Heidi Fessler, member of the Litigation Department and the eDiscovery, Data and Document Management Practice Group at Barnes & Thornburg
  • Bryon Bratcher, Managing Director at Gravity Stack LLC and formerly Director of Practice Solutions at Reed Smith LLP

Here are some of the observations from the panelists:

Asay: “Law firms regularly use private cloud providers, we simply don’t call them that. Legal service providers like Integreon regularly host data for their clients, effectively offering private cloud services, and are well adopted by law firms… Law firms know that they will fight tooth and nail against turning over their clients’ data, and they’re quite sure that service providers that specialize in the legal industry will fight just as hard (or risk never having another client). However, law firms have been less sure about how big companies servicing many different industries would proceed in the face of an order to release data in their possession. This is an issue that has come up time and time again, even as great strides have been made by law firms to understand and accept the benefits of the cloud… I think you’d be surprised how many professionals inside law firms quietly are advocating to use the cloud and recognize the benefits over hosting data inside the law firm, but they don’t feel empowered to execute until the banks do. Just as (supposedly) no one ever got fired for choosing IBM, there is still a sense that no one gets fired for NOT choosing the cloud.”

Cohen: “I think this (the question whether Amazon is handing over client data} is a real issue for some, but it’s not the overriding issue, which is a fundamental ignorance as to the allocation of risk in the cloud and how to deal with it. If you don’t understand the services you are buying, then you can’t assess security appropriately–something lawyers are required to do by virtue of their professional responsibilities.”

Cohen also quoted the headline from this press release “Threat Stack Analysis Reveals 73% of Companies Have Critical AWS Cloud Security Misconfigurations” where Threat Stack, a cloud security and compliance management company, announced the findings of an analysis of more than 200 companies using AWS that revealed nearly three-quarters have at least one critical security misconfiguration, such as remote SSH open to the entire internet.

Baker: “The concern – benchmarked with several large firms – is that cloud solutions may result in a scenario where the cloud provider could read the law firm’s files/email, if the provider wanted to. This could violate privilege or provide alternate, and unexpected, routes of discovery…{With regard to a question from Abramowitz as to whether public cloud providers simply change their terms of service to get law firms comfortable or is legal such small fry for them that they wouldn’t bother} Through a certain lens, yes. Through another lens, there’s booming growth in legal tech – especially surrounding contract and litigation discovery. I expect that public cloud providers will need to update their terms of services to get law firms more comfortable, and that it will be the discovery firms driving the change.”

Bratcher: “Ultimately many law firms are adopting a hybrid approach between a private cloud with a smaller public provider coupled with a cloud area with the larger public providers like AWS or Azure. I would see that trend continuing for the foreseeable future.”

Fessler: “It is hard for those outside of the law firm environment to understand the level of reticence to adopt “new” technology within the legal world. Most attorneys feel an enormous responsibility to keep their client data secure and under their personal lock and key. Unfortunately, this perception of control and security does not equate with fact. It is still common to find otherwise sophisticated attorneys who refuse to use eDiscovery tools and technology and instead running review using Excel spreadsheets. At times this hesitation is also the result of a misdirected drive to reduce legal spend.”

These are just a few snippets from an overall interesting conversation regarding legal’s adoption of the cloud.  Click here to view the entire conversation.  Tomorrow, I’ll have some thoughts about cloud selection and why the question of private or public cloud isn’t the only one you should be asking.

So, what do you think?  Do you think that the legal industry is still slow to adopt the cloud?  If so, why do you think that is?  Please share any comments you might have or if you’d like to know more about a particular topic.

Sponsor: This blog is sponsored by CloudNine, which is a data and legal discovery technology company with proven expertise in simplifying and automating the discovery of data for audits, investigations, and litigation. Used by legal and business customers worldwide including more than 50 of the top 250 Am Law firms and many of the world’s leading corporations, CloudNine’s eDiscovery automation software and services help customers gain insight and intelligence on electronic data.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

One ALSP Exits, Another Prepares to Enter: eDiscovery Trends

The topic of Alternative Legal Services Providers (ALSPs) is always an interesting one, with considerable discussion at this year’s Legaltech® New York conference and my colleague, Tom O’Connor, recently wrote a white paper on the topic for our blog (a four part series here).  They can also be somewhat controversial.  Looks like one existing ALSP is shutting down, while another one (coming soon) is promoting itself to be “Uber for lawyers”.  Hmmm…

Going Out: As reported by Gabrielle Orum Hernández in Legaltech® News and also reported by Bob Ambrogi in his LawSites blog, legal directory Avvo is shutting down its controversial Avvo Legal Services, a service that provides fixed-fee, limited-scope legal services through a network of attorneys.  Internet Brands, the company that acquired Avvo last January, has decided that the service does not align with its business and focus, according to a letter sent by B. Lynn Walsh, Internet Brands’ executive vice president and general counsel, to the North Carolina State Bar last month.

Avvo has faced a number of bar association challenges to its Avvo Legal Services offering, including the New Jersey Supreme Court, which issued an ethics opinion last year barring the service from the state because of the offering’s use of what they determined was improper fee splitting. State bar groups in New York, Virginia, Ohio, South Carolina and Pennsylvania issued similar ethics orders.  But other states, like North Carolina and Illinois, were more open to the service.

Upon acquisition, Internet Brands planned to fold Avvo into its other legal services portfolio alongside brands like Lawyers.com, Nolo and Martindale-Hubbell. However, by April, most of Avvo’s leadership, including former CEO Mark Britton, CFO Monica Williams, CPO Sachin Bhatia, CTO Kevin Goldsmith, and chief legal officer Josh King, had made plans to depart the company.

Coming In: As reported by Ian Lopez in Legaltech® News, Kevin Gillespie, a self described “serial entrepreneur,” believes he’s found a way to leverage tech for lower-cost legal services while managing to comply with these rules. His answer is mobile platform “Text a Lawyer,” an app-based service where a consumer fires off a legal question into the ether and lawyers flock to answer them.

Describing the platform as “Uber for lawyers,” Gillespie told Legaltech News that Text A Lawyer functions via two apps, one for consumers and one for lawyers. He noted that both will be free for download, though the client app charges a “flat one dollar software license fee” per question submitted and a four dollar as an “attorney verification fee,” which includes identity and license verification services. Potential clients are charged $20 (and “some cents” for a credit processing fee) per initial question, which includes a brief discussion with a lawyer, then $9 per follow up question. Clients can then print out the Q&A and use it as needed.

“I figure everyone’s got 20 bucks. So I’m trying to bridge the gap between lawyers, at hundreds dollars an hour, that blue collar Americans cannot afford … with what they can afford,” Gillespie said. “I’ve [tried] many different pricing models, and I keep coming back to that.”

Like an ride-sharing service, the app functions as a marketplace for free agent service providers to profit. In this case, that agent is the lawyer, who collects a fee of $15 per first question and $8 a follow up. Also like a ride-sharing service, users can rate attorneys, though Gillespie said that these ratings are “kept internal” and only used to connect a user “with the best lawyer available.”

“It’s the Yelp approach, except the clients never see them,” Gillespie added.

While not yet available to consumers, Gillespie plans on issuing a beta version of Text A Lawyer in August or September in Oregon and Washington, and he has plans on eventual expansion to all 50 states. He noted that he designed the app “from the beginning” to be “as close as possible” to ethically compliant with RPCs in all 50 states. “There are a couple of states who will have their heads buried in the sand, their bar associations, I mean. [But] there’s nothing you can do about that,” he added.

So, what do you think?  Will the “Text a Lawyer” succeed in gaining bar association approval where Avvo failed?  Please share any comments you might have or if you’d like to know more about a particular topic.

Sponsor: This blog is sponsored by CloudNine, which is a data and legal discovery technology company with proven expertise in simplifying and automating the discovery of data for audits, investigations, and litigation. Used by legal and business customers worldwide including more than 50 of the top 250 Am Law firms and many of the world’s leading corporations, CloudNine’s eDiscovery automation software and services help customers gain insight and intelligence on electronic data.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

Today is the Day for eDiscovery for the Rest of Us!: eDiscovery Webcasts

Does it seem like eDiscovery technology today is only for the “mega-firms” and “mega-cases”? What about for the “rest of us”? Are there solutions for the small firms and cases too? What does the average lawyer need to know about eDiscovery today and how to select a solution that’s right for them?  Find out in our webcast today!

Today at noon CST (1:00pm EST, 10:00am PST), CloudNine will conduct the webcast eDiscovery for the Rest of Us. In this one-hour webcast that’s CLE-approved in selected states, we will discuss what lawyers need to know about eDiscovery, the various sources of data to consider, and the types of technology solutions to consider to make an informed decision and get started using technology to simplify the discovery process. Topics include:

  • How Automation is Affecting All Industries, including eDiscovery
  • Drivers for eDiscovery Automation Today
  • Challenges from Various Sources of ESI Data
  • Ethical Duties and Rules for Managing Discovery
  • Getting Data Through the Process Efficiently
  • Small Case Examples: Ernie and EDna
  • Key Components of an eDiscovery Solution
  • Types of Tools to Consider
  • Recommendations for Getting Started

As always, I’ll be presenting the webcast, along with Tom O’Connor, who wrote a four part blog post series that we have published on the blog in the past couple of weeks.  To register for it, click here.  Even if you can’t make it, go ahead and register to get a link to the slides and to the recording of the webcast (if you want to check it out later).  If you want to know what eDiscovery solution options there within an affordable budget, this is the webcast for you!

So, what do you think?  Do you feel like you can’t afford eDiscovery technology?  Please share any comments you might have or if you’d like to know more about a particular topic.

Sponsor: This blog is sponsored by CloudNine, which is a data and legal discovery technology company with proven expertise in simplifying and automating the discovery of data for audits, investigations, and litigation. Used by legal and business customers worldwide including more than 50 of the top 250 Am Law firms and many of the world’s leading corporations, CloudNine’s eDiscovery automation software and services help customers gain insight and intelligence on electronic data.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.