NEW YORK — What is the future of the legal industry? Will the largest and most prestigious law firms continue to steer the legal economy, or will innovative business models — companies that leverage technology and globalize service models and business process expertise — take the reins? Will these new entrants revolutionize the practice, sending talent, revenue, and prestige in a new direction? Or will they merely enhance the ability of Large Law to serve their clients?
Such were the questions debated last week at Martin Lipton Hall at the New York University School of Law. In an auditorium built by Large Law, an impressive and eclectic group of NYU Law alums spoke to a packed crowd about who — they believe — will build the future of law. The audience (most also from NYU Law) included law students, Large Law attorneys, in-house counsel, and many leaders of innovative legal technology companies.
The event was kicked off by its brainchild, Anna McGrane, COO of PacerPro. McGrane argued that NYU Law’s unique culture of collaboration and transparency, combined with its historical strengths in public interest and business, should put it at the forefront of a critical dialogue on law and technology.
But the marquee news came from the energetic Christian Lang. A Davis Polk alumni, Lang runs the NY Legal Tech Meetup, an organization that boasts more than 1,000 members and is designed to inspire and empower the legal innovation community in New York. The news was that NYU Law is launching its own innovation fund, in an effort to establish leadership in future of the practice.
Finally, the event then featured two panels, both hosted by the ever-entertaining Zach Abramowitz, CEO of media company ReplyAll, and frequent advisor and commentators on all things legal tech.
The Entrepreneurial Lawyer: Leveraging Legal Tech Today
The first panel, “The Entrepreneurial Lawyer,” provided a snap shot of how legal innovation is being leveraged today. The panel featured Ron Friedmann, partner at leading legal consulting firm Fireman & Co., and widely followed legal commentator; Chris Martin, lead innovation and tech solutions attorney at Latham & Watkins; and Jason Schultz, director of NYU’s Technology Law and Policy clinic.
[McGrane] warned that many in the legal tech space have good ideas, but have not necessarily created good products, and thus, struggle with sales, even if they have an appealing piece of technology.
Friedmann walked the audience through the ongoing debate about whether innovation in legal is actually making an impact on those practicing, or whether the hype is largely an echo chamber emanating from of a small group of enthusiasts. He asked whether technologies — like automation tools in areas of contracting, e-billing, or due diligence — were fundamentally changing how attorneys practiced law, or simply allowing them to do it faster? More importantly, were attorneys actually freed by technology to do higher value (and ostensibly more interesting) work, or had their lives not materially changed from the days of paper?
In one area of legal technology, e-discovery, Friedmann is certainly bullish on how technology has been able to change lawyers’ lives for the better. He noted that machine learning in litigation document review had dramatically reduced the time (measured in days) when hundreds of temporary lawyers are required to toil away at routine e-discovery matters.
Martin discussed his work at Latham trying to bridge the gap between the firm’s elite lawyers and its chosen technology providers. Martin said he was an early adopter of due diligence tech solutions and their ability to change firms’ mergers and acquisitions practice. Accordingly, Martin said he was surprised to see that unlike litigation, deal work had hardly evolved in the five years since he had last practiced. He noted that still today, many attorneys are doing M&A review manually.
One reason why, Martin explained, is that often there is too much pressure on immediate review, and clients simply want the work done perfectly. Thus, in the heat of the moment, it is easier for lawyers to do what they’ve always done, and which they and their clients know can work extremely well.
Asked whether there is client pressure to using such technology to improve efficiency and lower cost, Martin noted that, in reality, there is pressure in both directions —there can be pressure to use the best software in the market and get the lowest cost; but sometimes, there is no appetite for trying new things among certain clients, even if it would save cost.
Finally, Schultz, of NYU Law, argued that while legal tech is important, buyers and users had to examine ways to get information outside of the legal tech hype echo chamber. Law firms and other users should look to technology that had been audited by peer reviewed research, Schultz said, adding that he looks carefully at how the impact of these technologies can be measured accurately.
The State of Legal Technology: Creating the Legal Tech of The Future
The second panel, “The State of Legal Technology,” was designed to provide a peek into the future of legal innovation. The panel featured three NYU Law alumni who went on to launch or run successful legal technology companies: McGrane, of Pacer Pro; Noah Waisberg, CEO of Kira Systems; and Alma Asay, Chief Innovation Officer at Integreon (and founder of Allegory).
McGrane began her talk with generous praise of her co-presenters, noting that both of their products are “actually used” by law firms. She emphasized that the primary job of a legal tech company, including Pacer Pro, it is to build technology that allow law firms (or other legal services providers) to better fulfill their clients’ needs. She warned that many in the legal tech space have good ideas, but have not necessarily created good products, and thus, struggle with sales, even if they have an appealing piece of technology. “The slowness of a law firm has a purpose,” she said, adding that many clients come to law firms, not to innovate, but to get it right.
Friedmann walked the audience through the ongoing debate about whether innovation in legal is actually making an impact on those practicing, or whether the hype is largely an echo chamber emanating from of a small group of enthusiasts.
Next, Waisberg described how, before Kira Systems, he was an M&A associate at Weil, Gotshal & Manges, and his big realization was that he was doing a lot of the same work over and over. He argued that today, alternative legal service providers (ALSPs) utilizing contract automation technology and good process can get contract review done at up to 90% less cost than a top-tier law firm using associates and no technology. To him, a key question for the future is, what else can you do with this massive cost savings: Deeper diligence? More review? Explore more controversial M&A deals? He concluded that these savings have the ability to expand the legal pie all together and possibly unlock a latent market which does not exist today.
Finally, Integreon’s CIO Asay (a former Gibson Dunn associate) said she initially wanted to build systems that allowed litigators to eliminate reinvention of the wheel and win cases. Moreover, she became annoyed that complex case management was handled by rudimentary technology, specifically Excel spread sheets and share drives, and wanted to find the next step in e-discovery.
Asay noted that when she started Allegory in 2012, there was not a lot going on in legal tech. Today, she is proud to say that while change still might not be happening fast enough, it is happening. (Allegory was purchased by Integreon in November 2017.)
Alma reminded the audience that innovation is not only about tech — the human element is crucial. As a “naïve entrepreneur” you believe “if I build it they will come,” she noted, adding that, unfortunately, often they will not.