Players in the legal technology industry recently announced exciting integrations and acquisitions. Several software platforms have acquired more functionally focused providers. This is truly the norm in many industry verticals, but particularly so in the world of technology.
Any provider of legal tech will tell you that the platform is never finished. Every provider is persistently discerning how to increase their market share. The focus is supporting the needs of attorneys. The challenge? Needs vary. According to the ABA’s 2018 TECHREPORT on Practice Management, the question of individual purpose versus a robust platform continues to be a question.
Platform or Purpose?
One-stop shops are a goal of businesses, and the impulse toward them is commonplace. In economics, the Consolidation Curve exists to model the path industries, across the board, follow to produce undisputed industry leaders. Industries pass through Opening, Scale, Focus, and Balance & Alliance phases. During these phases, competitors absorb competitors to increase their presence in the market. This happens until several industry giants remain to dominate eighty to ninety percent of that industry’s market--to be one of the few options consumers can choose from.
In the context of the legal technology industry, though, the act of consolidation, the reduction of consumer choice, and the pursuance of a one-stop shop is a mixed bag of benefits and risks. On the one hand, it promotes multi-feature tools, like case and practice management platforms, with dozens of capabilities accessible via one login and displayed on one user interface. On the other hand, though, consolidation risks overlooking the fact that attorneys want different services and outcomes from legal technology. And, for many law firms, they are interested in solving a single need versus many. So the option to adopt, for example, solely a time tracking tool is limited when consolidation occurs.
For now, the answer for legal tech seems to be both! Some firms prefer a full platform. Others prefer individual solutions.
According to Wolters Kluwer’s Future Ready Lawyer Survey, law practices, legal departments, and business service firms differ in their interest in Technology Advancement Initiatives. These initiatives include efforts to hire a technology specialist or team, create a formal innovation initiative, and partner with a legal technology start-up (though this last one possesses the least variance between groups).
This study also notes that Technology Leading and Technology Transitioning legal organizations differ in their rates of interest. The adoption of client portals, time and billing systems, and other foundational technology tools are not equally valued across the lifespan of tech adoption by law firms.
And according to Bloomberg Law, law practices have used various smaller legal technology vendors for their practices instead of large platforms when larger providers did not suit their needs. However, this approach isolates information in different software solutions, making tasks like data analysis, information sharing (say, between attorneys and clients or attorneys and colleagues), and communication more isolated, time-consuming, and varied.
So, what's next?
All in all, from foundations to advancement initiatives, it is not as easy to say what attorneys want from technology. Rather, they want many different things. What, then, is the proper approach to consolidation that strikes a balance between the instinct toward strategic acquisition and the diverse technology needs of attorneys?
Such an approach should first keep in mind the true impact of our industry’s technology. Our industry’s platforms enable attorneys to do more in the same amount of time, which empowers attorneys to serve more clients--many of whom are beleaguered by divorce, personal injury, a custody battle, and more. As such, consolidation in this industry can directly affect some attorneys’ abilities to practice law for their clients.
Such an answer should attend to user feedback all the more so that platforms can better service the multiplicity of nuanced technology interests that attorneys possess. As that Wolters Kluwer study highlighted, the legal industry will be more exposed to legal technology in the coming years, but firms will continue to encounter technology at different rates and for different reasons. As such, consolidation in the legal technology industry must account for these nuances. So as consolidation continues, it's important to note variety is key.
Flexibility is key
There is no “perfect fit.” However, providers should appeal to the technology needs of attorneys, and attorneys should be flexible in their visions for technology. While attorneys certainly know their own practice better than anyone, and while technology that is not “the perfect fit” is a risk, of sorts, that risk is a worthwhile one—and maybe not a risk at all. After all, less-than-a-year-old evidence in the ABA’s 2018 TECHREPORT on Practice Management states that over ninety percent of practices are satisfied with their current legal technology tools.
True, massive consolidation in the legal technology industry is far off, but the industry is growing; technology adoption will continue to increase. As such, even now, the manner by which we, the providers, and attorneys approach consolidation will impact the way attorneys are able to practice law and serve their clients.