Huron Legal hosts post-LegalTech discussion in London

Nigel Murray, managing director of Huron Legal in London, was the host this week of a discussion and dinner at the Cavalry and Guards club whose purpose was a roundup of LegalTech from a UK perspective. This has become a fairly regular event and a good opportunity for those who went to LegalTech to report back to those who were unable to be there.

The UK contingent at Legaltech was smaller than usual this year. There seems to be no consistent reason why regular attenders gave it a miss: budgetary constraints provide an obvious answer; there may be a sense that the format has little to offer to non-US people (I do not agree, merely surmise that others might think so);  anecdote suggests that there is a lot of work on at the moment which, coupled with the shortage of experienced  people, may mean that the regulars could not be spared for a week away.  It would be fair to say that LegalTech showed little interest in us this year – so far as I could see, the Integreon panel in which I participated with kCura (on the Jackson reforms)  and UBIC‘s cross-border session were the only ones which paid any attention to the world beyond US borders.

Nigel Murray, Andrew Haslam of Allvision and I were the only ones present at the Huron evening who had been at LegalTech. Andrew Haslam had with him the draft of his usual roundup article which will appear shortly. Nigel identified some key themes and the rest of us kicked them about.

Predictive coding

Pretty well every software provider now has something labelled “predictive coding” in its product set. It was fashionable this year to give an affected yawn at the mention of the subject, as if it were last year’s fashion item; someone had suggested to me that we need the next new thing to come along so that lawyers do not feel that predictive coding is too dangerously modern for them.

Doubts were expressed as to whether predictive coding was being used very much in the UK. Andrew Haslam and I agreed that it was more widely used than anyone knew about, but not necessarily openly as the primary means of determining whether a document should be disclosed or not. Prioritisation seems to me to be the primary benefit – if you were to ask a lawyer if he or she found value in having documents offered up in a presumed and (and draft) order of importance, the answer should be “Of course”. Discussion around the room suggested that predictive coding was increasingly seen as valuable for cross-checking decisions which had been arrived at by some other means; it would not take long before that position was reversed, with predictive coding being the primary selection process, cross checked by other means.

An example was given of client pressure to use predictive coding. The lawyers were reluctant but, being relieved of the decision-making process (because the client insisted on its use), got on with it and were happy with the outcome. It is the clients, of course, who have the greatest interest in the savings which the use of this kind of technology can bring.

There remained some misconceptions. I said I had come across a firm who had somehow concluded that predictive coding was designed to relieve the lawyers of the need to read the documents which they disclosed.  How did they reach that conclusion? Maths and stats were not necessarily a big selling point for arts graduates, but the conclusion should be that one must hire those talents, not simply ignore the technology. Lawyers did not like the idea that senior people were making primary relevance decisions, a function traditionally undertaken by more junior people. That objection appears to take no account of the probability that money would be saved by the early focus on important things.

The overall conclusion was that predictive coding is here to stay and that we will hear much more about it during 2013

Big data into small data

There is a tendency to label any large volume as “Big Data”. Nigel Murray suggested that the real focus was on turning large volumes of data into “small data” by aggressive but defensible reduction of volumes – getting rid of useless and duplicate data. He cited the launch of Nuix’s Luminate product as simultaneously the best product launch of the show and as a harbinger of things to come.

I said (having just written an article about this) that pending changes to the Federal Rules of Civil Procedure (specifically a new version of Rule 37(e) and the express inclusion of the word “proportional” into the definition of relevance) would help steel the nerves of those contemplating defensible deletion. We did not in the UK have the same pressures to disclose everything and, indeed, the new rules were taking us in the opposite direction. It was not an excuse for lax eDisclosure, but it gave clients a strong incentive to both narrow the scope of disclosure case-by-case and to be more assertive about deletion. The problem lay in establishing ROI whilst the focus seems only on cheap storage. Was anyone, I wondered, keeping track of the documents which were being collected time after time and regularly discarded. What was that costing?

Lawyers have been slow to grasp the potential for selling new services to their clients. The clients had other priorities, or thought that they did. We will not break through this until clients start adding up the costs of repeated disclosure from large volumes.

Law firm structure – who will own whom?

The future structure of law firms came up more than once. The predictive coding discussion had highlighted the increased role for senior lawyers at the beginning of the disclosure process. That, I said, was a subset of a wider change in which law firms would comprise a small number of senior people, supported by technical experts, providing tactical and strategic advice which the clients were willing to pay for, together with some very junior people. The middle rank would be replaced by technology and by increased use of outsourced services, for example for managed review. The winners would be the law firms (and not necessarily only the large ones) who recognise this competition (which came from their clients as well as from rival business models) and matched it.

It was suggested that, instead of law firms buying technology, technology providers would start buying law firms. It is more likely in fact that both would be acquired by some larger entity who cherry-picked the best in order to provide a single cohesive service. The entry of Capita into the managed review business is a straw in the wind.

Employment

Nigel Murray observed that there seemed to be a lot of people at LegalTech offering their CVs around – a phenomenon last seen in 2009.  At the same time, however, it is said that the industry (both in law firms and providers) is desperately short of skilled and talented people. Nigel pointed out that the increase in volumes does not require more people; it is the number of matters which counts.

The UK has the same shortage – or perhaps mismatch – of skills. It was said that CVs flood in all the time from people who have done a lot of review work on a wide range of platforms and consider themselves qualified as a result to manage eDisclosure projects. We need something more than experienced reviewers, and the probability is that they will come from other industries or (as Nigel Murray observed) be trained up straight out of university by companies like Huron.

Software winners

Someone asked if there was yet a rival on the scene for kCura’s Relativity. Andrew Haslam said (and I concurred) that the acquisition of Lateral Data and Viewpoint by Xerox provided the most interesting new model in 2012. I expanded on this, saying that Xerox could now offer behind the firewall, hosted and SaaS models with whatever degree of consultancy was appropriate to the case, and with a new managed review service as well. That has to be taken seriously, as does the breadth of the new Summation from AccessData also mentioned by Andrew.

The audience remained discontented with the present per gigabyte model and the high cost of getting large volumes of data into systems in the first place. Many providers (Nigel pointed out that Huron is one of them) charge according to end volume rather than starting volume. We will see a transformation when it becomes cost-effective to tip starting volumes into predictive coding tools.

Conclusion

It will be clear from what I have said above that our discussion ranged far beyond the original remit to discuss LegalTech. We need more groups like this, where providers, law firms and others with an interest in the subject gather informally to kick ideas around. The overall conclusion was 2013 would be a very busy year in which we would see significant changes.

The evening ended with a fine dinner by candlelight. Many thanks to Nigel Murray and to Huron Legal for organising an interesting and useful evening.

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