Legal tech vendors aiming to be one-stop shops for attorneys
This article was originally featured on Bloomberg Law.
- Integrated solutions reduce costs, create better user experience
- Expertise required to enter new areas of the market, industry says
Legal technology companies are expanding their products and buying vendors with niche market expertise as they aim to become sole sources of cutting-edge tools for law firms and legal departments.
Onit, DISCO, and other providers of such legal optimization tools as e-discovery and document review are scaling up to provide enterprise-wide solutions for their customers.
The demand for legal tech services is rising—along with investment in the field—as law firms and legal departments increasingly look for ways to boost efficiency, Bloomberg Law analyst Meg McEvoy said.
“Legal tech companies are meeting the market by solving more than one problem,” McEvoy said. “Buyers don’t want to deal with a dozen different providers whose technology potentially doesn’t integrate.”
Offering many legal tech products on one integrated platform means users only have to learn one system to access different tools, reducing their training time, legal tech executives said. Companies, though, must ensure they have sufficient subject matter expertise to properly serve their clients—and that they differentiate themselves from competitors.
Legal technologies help automate and speed up the process for performing daily legal tasks such as contract drafting, legal research, and billing—freeing up attorneys’ time to focus on other work.
The companies are expanding by developing new tools or acquiring other companies. Private equity and venture capital funds invested $400 million in legal tech companies in the first quarter of 2019 alone, a Bloomberg Law analysis of Crunchbase data shows.
“We’re trying to consolidate as many tools as we can under one roof to provide a one-stop shop for legal tech,” Matt DenOuden, Onit Inc.’s vice president of sales, said.
Entering New Territory
Houston-based Onit, which offers e-billing, contract management, and other solutions, has been acquiring tools to expand into fields such as legal holds, a process by which companies preserve documentation in anticipation of a lawsuit.
The company May 13 announced that it acquired SimpleLegal, a provider of software to help legal departments manage their matters and track legal spending. Onit already provides those services to large legal departments, but the acquisition will allow it to service small and mid-sized departments as well, Onit CEO and co-founder Eric M. Elfman said.
Elfman said the company’s next focus is contract lifecycle management, and that it plans to acquire more companies over time.
E-discovery solution provider DISCO, headquartered in Austin, Texas, is looking to create a “litigation life cycle management platform” by branching out into case management and other legal processes, DISCO Chief Marketing Officer Neil Etheridge said. A new tool called “Case Builder” is scheduled for launch later this year, he said.
Hundreds of vendors now offer varying legal tech solutions. Consolidating solutions enables law firms and legal departments to manage their information in one place and avoid time-consuming training on myriad platforms.
“We are seeing a need for interconnected systems and a unified solution,” said Sharath Beedu, vice president of products at Elevate, which provides consulting, legal technology, and project management services. The single data source provided by enterprise-wide tech would enable firms and departments to apply artificial intelligence to generate insights and trends from the data, he said.
Companies seeking to expand into new areas of legal tech, however, will find themselves competing with established vendors that have been listening to their clients and tailoring their products to address client needs, Robin Snasdell, Managing Director at Consilio, which provides e-discovery, document review, and consulting services for legal departments, said.
Companies that do branch out in the field must make sure they know more than just the tech, industry executives said. That means knowing your audience, what potential buyers are looking for, and what systems are already in place, Beedu said.
Etheridge, of DISCO, said his company was able to expand across legal practice areas through a combination of engineering and legal domain know-how.
“Oftentimes software companies are very good at developing software but not as good at understanding client needs,” Hassan El Asraoui, managing director and global head of Duff & Phelp’s legal management consulting group, said.