Legal Market Presents Abundant Opportunities For Solution Providers Versed In Law

There's something like 50,000 law firms in the United States. The digital age has created new challenges for them in the form of inordinate numbers of electronic documents, as well as new technologies that solution providers can bring to that extremely lucrative market.

But the legal industry is unique in many ways, and a VAR who wants to tap into it must intimately understand the needs and restraints inherent to the profession, according to Steve Berrent, CEO of eMag Solutions of Atlanta.

"Law firms are buyers with particular needs and particular desires. It's challenging to foresee those needs and desires and drivers without having had the experience in working with them, and understanding their decision-making and thought process," Berrent told CRN.

[Related: Employee Mistakes, E-Discovery Drive Encryption Deployments: Study]

Sponsored post

At the same time, those firms are under mounting pressure to drive down legal costs, and vendors are delivering solutions geared to do that.

"A sophisticated reseller that understands that market, and understands the technologies, has the opportunity to bring to market solutions that can differentiate himself," Berrent said.

Berrent worked as Vice President Al Gore's IT director during his 2000 presidential run, then went to law school after the unsuccessful campaign. He joined a large firm after graduating and started practicing law at a time when a document identification and evaluation process called "electronic discovery" was becoming more prominent.

Realizing the potential for bringing the process to his fellow attorneys, Berrent dropped law, formed his own IT company and went searching for a software vendor to partner with who could offer a "differentiating technology."

"I was looking for something that was innovative and had a material impact in an attorney's ability to get the job done," he said. "In Recommind, we found a partner that does that."

Recommind, a San Francisco-based developer, sells a software package called Axcelerate that handles e-discovery and other legal search functions using advanced analytic techniques.

Tyler Robbins, vice president of global hosting at Recommind, said the company has been serving the legal market for nearly 12 years, and business is picking up steam now with a cloud-based delivery model.

"When clients have a legal matter with lots of discovery of documents back and forth, they come to us to collect data, process it and go through a long review process before negotiating with the other side about what they will turn over," Robbins told CRN.

Recommind has sold mostly direct to its customers so far, but with its successful partnership with eMag, and potential new partners in the pipeline, the company's goal for 2015 is to build out a channel, Robbins said.

The software the company employs a sophisticated analytic technique called predictive coding.

It’s a powerful way of conducting e-discovery, which accounts for 80 percent of Recommind's business.

In broad strokes, discovery involves one party involved in litigation requesting a certain set of documents it believes relevant to its case, the opposing party producing those -- and only those -- documents, and then the requesting party reviewing what it received for useful information. In theory, it’s a simple process, but the reality can be a nightmare for lawyers.

"When I went to law school, what I learned about discovery is that I wanted no part of it. When the volume of documents skyrocketed to hundreds of thousands and millions, it became untenable," Berrent told CRN.

The predictive coding approach can be of benefit to both sides in the dispute -- the defendants who typically need to comb through troves of documents and select those relevant to the discovery request without turning over anything they don't want the other party to see; and the plaintiffs who need to review all they receive, which can amount to a staggering load of information.

Robbins said discovery requests often produce terabytes of documents. "Three or five years ago, they had to look at every single document one line at a time and make the decision about that," Robbins told CRN.

"Once you know some key parts of the case, you can go train our software and it can go find that more quickly," he said.

When using the software properly, both parties can meet certain thresholds of scrutiny that qualify as "defensible," which means "a reasonable effort" was made to fulfill the request, Robbins explained. Like most things related to law, that comes down to a judgment call and a slew of cases that serve as precedents.

"With software assistance, the level of accuracy is much, much higher. Industry has taken time to figure out what's defensible, and a bunch of cases have been debated around what we call predictive coding," Robbins said.

NEXT: Slowly Embracing An Analytic Solution

There's been a sea change of late, he said, where predictive coding has gone from being considered acceptable, to a good idea, to something now mandated in certain cases.

"I think we're still in that confusion curve in the industry. But that's not so much the debate anymore. Now it's about how you can prove you've applied the proper methodology," Robbins said.

To that end, Recommind's software provides attorneys with precise documentation on methods, sampling and accuracy.

For years, Recommind mostly sold its software either through on-premises licenses or in an "on-demand" fashion in which it would be procured for specific cases.

"Traditionally, the SaaS market for legal has been very transactional," Robbins said, with corporate clients and attorneys typically making buys to process documents on a case-by-case basis.

But now that's changing, with those legal professionals starting to understand "it's much more economical and consistent in our process if we purchase a solution that we use in all of our cases and commit to that methodology," Robbins told CRN.

To accommodate that shift, Recommind has been building out a versatile SaaS environment in which the vendor manages the entire software stack and the customer administers it themselves in the cloud.

"We train clients to run software, and they really have full autonomy to run as many cases as they want," Robbins said.

Berrent told CRN the legal market actually has a "consumption gap" in its use of technology, with solutions on the market that can drive success that attorneys aren't taking advantage of.

But solution providers that want to capitalize on that gap must make themselves familiar with the industry's unique culture and the varied requirements of different types of cases -- corporate litigation, investigatory, SEC, criminal, intellectual property all have different drivers and concerns.

"There is a lot of opportunity for knowledgeable players to enter and be successful in the market. That said, it is a market that is driven by specific drivers that are particular to legal," Berrent told CRN, including "what keeps them [lawyers] up at night."