As the gap between technology adopters and their less savvy counterparts continues to widen, we’re likely to see some striation in the legal tech market.
It’s no secret that the market for legal technology is becoming more saturated by the day (for proof, see Bob Ambrogi’s article from last week on the record amount of investments in legal tech that we’ve already witnessed in 2019). As we continue to see an influx of capital funding in the space, and as the field continues to crowd with new solutions, it is becoming more important for legal professionals to understand how to identify what tools will work best for them and their organizations.
A good starting point for this is to develop a basic understanding of what different technologies are out there and what they can do. The Wolters Kluwer Future Ready Lawyer survey includes some background on how to categorize different types of technology by their function and the use cases they are best suited to. The survey indicated the following categories:
- Foundational Technologies are basic tools that deliver benefits today and set the stage for an organization to integrate more advanced technologies on an ongoing basis. These include client portals, electronic matter management, data security tools, and billing software.
- Enabling Technologies improve efficiency, productivity, and work product, and often require some level of change in work process to fully leverage them. These include contract management/analytics software, data analytics, and practice management solutions.
- Transformational Technologies deliver demonstrable new business results. This category includes artificial intelligence, machine learning, predictive analytics, and blockchain.
As we have discussed before in this column, tech needs can vary widely across different kinds of organizations. For professionals in the Corporate Legal Department (CLD) space, there are several technologies that I believe will see continued investment in the coming months:
- Knowledge Management (KM): While KM may seem to be a given to many readers, heightened complexity and volume of information was named as a leading challenge for respondents of the Future Ready Lawyer. Leverage of a manageable and intuitive knowledge management system will continue to be an important asset for corporate legal departments.
- Contract Management, Contract Review, Contract Intelligence: The application of technology to the contract is, in my humble opinion, the hottest and fastest growing area within legal tech with an increasing focus on use cases for CLD professionals. Depending on the level of technology involved, these solutions can span the enabling technology and transformational technology categories.
- Legal Operations, Time Tracking, Process Improvement: As the focus on legal operations continues to grow, we will see additional investment to measure costs (and time) and then help the CLD optimize spend. These solutions can also span enabling and transformational technology, depending on the type of capability they involve.
I recently spoke with Andy Polovin, General Counsel and Secretary at Uptake Technologies Inc., to discuss the use of technology within his own corporate legal department. As someone who operates within a highly nimble organization — and one that specializes in predictive analytics, no less — he had some interesting insight to share regarding the role that technology adoption plays for him and his team.
Uptake uses data analytics and predictive software to help companies improve performance in industries like energy, transportation, mining, and rail. “Our job is to predict failures on very large machines before they happen, and to empower our customers to prevent those failures from happening,” Andy said. In its five years, Uptake has grown at an impressive pace, becoming the third unicorn in Illinois in 2015 and raising $100 million in its Series D funding round, which led Pitchbook to name it the fastest U.S. startup ever to reach a $2B valuation.
As Uptake’s Chief Legal Officer, Andy is responsible for and oversees all legal, regulatory, oversight, and compliance matters. His team comprises three lawyers who specialize in commercial issues, intellectual property (including tech transactions to support the commercial attorney), and general corporate law, including governance, M&A, labor and employment, and more. The team collectively handles a wide range of other practice areas on an as-needed basis, such as real estate, tax, financing, and other areas. As the company has continued to grow, Andy’s team has implemented a number of technology tools to manage the common challenges that face corporate legal departments of all sizes, and to help the department articulate the value it provides to the business.
In the area of contract management, Andy foresees a growing need within his organization to continue to invest resources — and by the look of the current market landscape in this area, many other corporate legal departments have identified a similar need. “There is a lot of venture capital money flowing into that space right now, and we’re hearing a lot about AI in contract management that can perform certain functions without human intervention,” Andy said. “Our legal department at Uptake will likely get to that kind of solution a bit faster, given the nature of our business, but we’re not there yet. What I think is lacking in the conversation around AI in contract management is finding a simple, elegant solution that makes the operation of the in-house legal department more efficient and effective today.”
For other needs within the department, such as billing management, Andy’s team has developed an arsenal of homegrown solutions that they built on top of Uptake’s existing business intelligence platform. “Since Uptake was already using a BI program in other areas of the company, including our financial system, it made sense to use the same program for needs that we had in the legal department like billing,” he said. The solution allows Andy to access real-time information on the company’s outside counsel spend and intellectual property activity. Andy’s experience in this regard is a great example of a more nimble organization that has found an expedient path to what other tech adopters in the space are seeking — speed, efficiency, and the ability to drive value.
In terms of handling outside counsel — an area that we have covered in this column in the past — Andy and his team have not yet encountered a need to adopt another solution to do that, but as the company grows, Andy anticipates that this could be a future need. In his team’s case, nearly 70 percent of the company’s legal work is currently done in-house thanks to a highly talented in-house team. “Apart from a handful of functions, we handle the majority of our own legal work right now, but as we grow we will continue to evaluate our potential needs around outside counsel and workflow management,” he said.
As the gap between technology adopters and their less savvy counterparts continues to widen, we’re likely to see some striation in the legal tech market as certain use cases for legal professionals begin to take the lead. In next month’s article, we’ll discuss future technologies that will feature more prominently in the future for law firms.