Right as Legaltech New York kicked off last week, an article ran about consolidation in the industry, laying out the perceived benefits and challenges to those involved and “smaller” companies left out.
We had several conversations with clients and partners about it while in New York, and there was consensus that the article missed the mark. It was written by an investment banker, and there were some serious oversights concerning the real issues consolidation presents in the legal tech space.
First, we’re not in an industry in which the technology is mature. With TAR 2.0 and continuous learning platforms just hitting their stride — and the majority of the industry still tied to less robust and flexible TAR tools designed originally for other industries — there is SO much room for growth. It’s not these consolidated companies that are leading new technology development; they are trying to catch up, in fact. Eventually, this reality will lead to more universal deployment of TAR 2.0 because, simply put, it was designed for legal data matters and works better, is more efficient and saves more dollars.
Since we’re a TAR 2.0 company and will be on the front lines of new advances in legal-specific technology, we’re unashamedly bullish on that fact.
Second, more and more in-house legal departments want multiple choices for technology partners. It’s becoming increasingly rare that a F500 has just one tool or platform to choose from on a matter, and that’s smart… because no data set is the same, they require different functionalities and workflows. Consolidation means fewer choices. That’s a good thing for us, ultimately, because we’re not a Relativity provider like so many of these companies are. Again, another opportunity for growth.
Last, getting into new geographic regions or “expanding reach” just isn’t as important as it was a few years ago. In our industry, data can originate anywhere and be collected easily… it’s then going to be processed, reviewed and produced in secure, centralized locations. It’s more relevant to focus on how the data is stored, on forensics and data privacy, on chain of custody and review protocols, and not producing privileged materials. If this “geographic” concern was real in the minds of corporations and law firms, they’d never use an offshore LPO for review (or even technology). While it’s nice to have an office or facility near a client’s location, it’s just not necessary. As we all know, companies based in Nashville service clients in Denver, or those doing the majority of their business in DC have institutional clients in Seattle. What’s important is capacity, security and service.
That’s why we love being an intentionally independent company. We can choose the technologies we provide (if you haven’t looked at Catalyst’s Insight Predict yet, you should), are innovative at our core, and prioritize client service above all else. These consolidated companies can’t say the same things.