Only one practising UK commercial lawyer came to LegalTech in New York. Recession hit the litigation support industry before our eyes. One of the recurring themes there was that the clients are taking discovery in house. Down the road we saw some other extinct species
As if LegalTech itself were not enough, Sunday, my first full day back from New York, lasted for 24 hours, thanks to disrupted sleep patterns, a full InBox and a five hour meeting discussing potential discovery developments in Australia and AsiaPac.
You know better by now, I think, than to expect a dutiful account of LegalTech. You get from me little in the way of faithful reports of worthy sessions, no deep market analysis, no breathless interviews with industry leaders. Others, I know, sit on the special pews reserved for bloggers and have their reports filed before the speaker has made it to the bar. I got to few sessions, although I did turn up, I think, to all those I was booked to speak at. There is no shortage of industry leaders to talk to – you bump into CEOs in corridors or go up to their eyries above cloud level at the Warwick Hotel – but journalistic scoops are not really my style and I am content to wait for the press releases. I am into broader sweeps than the last big sale or the next major release.
Nor do I go round the booths much, and if I do, it is to see the people who are manning them, not the applications. I do intend, every year, to take the opportunity to contrast and compare the solutions on offer from rival suppliers. But you can do that anytime – they will all beam a webcast straight into my office next week if I ask them to, when I am in a comfortable chair with a cigarette and coffee to hand. What you can’t do anytime is bump into people and chat, catch the gossip and find out what is going on, as you can in and around LegalTech.
What is the point of going to LegalTech? What is it anyway, you might ask, and why does it matter in London, or Sheffield or Sydney? At one level, it is a large trade show, with every serious provider of software and services for litigation or regulatory investigation having something to show. It is a forum for serious discussion, with thought-leaders (and doers) exchanging ideas in big formal sessions on the main tracks and in the smaller rooms. It is chance meetings in lobbies, or dinners in well-chosen restaurants, or random rencontres in bars.
LegalTech Town Hall – a world-class panel of experts
It takes place in the Hilton on 6th Avenue, the Avenue of the Americas, and it is very American in tone. You – the putative addressee of this piece, the litigation lawyer or in-house counsel in any common law jurisdiction – perhaps think that America is just the place for this sort of thing. After all, you say (some certainly do) the Americans invented electronic discovery and look how expensive it is. That, of course, is to muddle cause and effect – what US lawyers and technology suppliers have done is to take the lead in defining how we handle all this stuff. If it were just the US lawyers practising US law, we could let them go their own way to damnation. It is not just US law and lawyers however. As one speaker helpfully reminded us, globalisation is everywhere these days. Data collection, data processing and data review raise issues which transcend national boundaries and involve multiple systems of law. They do, however, use the same technology from Melbourne to Madrid, and from Manchester to Manhattan. We could just leave our clients’ documents and data to the Americans. I am sure they will be pleased to tell us what to do.
One of the significant shifts, however, in a market which has seen a lot of shifts in twelve months, has been a fight-back from those who have hitherto left the US to make the running. We are glad to have their technology, of course, but we are beginning to see some serious US thinking about the wider implications where we have felt hitherto that US lawyers and suppliers have seen the rest of the world as a backward and obstructive place – backward because we generate fewer documents per head and seem in no hurry to deal with those we have, and obstructive because we do not roll over and comply when a US judge orders us to hand over our data.
When General Mark Clark was moving up Italy in 1944, his Chief of Staff was asked about solving a particular problem. His answer was “Sir, in the American Army we don’t solve our problems, we overwhelm them”. That has seemed the American way with the problem of information management for litigation or regulation, but it is changing. Within the US, judges, lawyers and clients are beginning to see the value of a prepared and co-operative approach to discovery. Outside it, those who want our data have started to say “please” and to recognise that a US court’s time limits are persuasive rather than mandatory east of Ellis Island. Those who would sell us software and services no longer approach us as if they were bringing glass beads to West African chiefs. And, as the rule-makers of Australia, Canada and the UK draw attention to our own rules and the (at least theoretical) power which they have to control costs, the more thoughtful US players are beginning to realise that the US may not have the monopoly on common-sense approaches to the problems.
Three years ago at LegalTech I heard someone ask “What can the UK learn from our FRCP Amendments?”. The answer now would probably be “what to avoid”. That said, we are collectively making progress, not just in the technology (which is gaining on the problems, not least in tools for early case assessment) but in their place in a process in which, increasingly, people are realising that the best technology lies between your ears. Everything else – rules, practice and computer technology – are servants to a more thoughtful approach.
There is a greater concentration of thought at LegalTech for three days every February than anywhere else. It may be funded by those with things to sell, but that does not diminish the focus on the context – the business, societal and jurisprudential setting in which the technology is used – and, besides, we do need the technology to clear up what technology has created.
Given the events in the UK – three important cases in a few months, pending developments in the rules and the anticipated attention which companies (and their liquidators, administrators and receivers) give to their receivables, and which regulators bring belatedly to their responsibilities – one would expect interest from UK lawyers in this, the one area in which new business might be expected in 2009. There was indeed good representation from practising UK commercial lawyers – and here he is.
Mark Surguy of Pinsent Masons in Birmingham
Mark Surguy from Pinsent Masons in Birmingham was, so far as I know, the only British lawyer at LegalTech who practices as a lawyer (as opposed to the three of us – Sanjay Bhandari of Ernst & Young, Matthew Davis from Lovells and me – whose work is on the litigation support side). All four of us spoke on panels but (speaking for myself, at least) were there to learn as well as speak. My total outlay in air fares, hotels etc was under half what it costs to go to a big London conference and trivial relative to the vast sums lost in the Digicel, Hedrich and Abela cases in 2008.
If Mark Surguy was the only practising UK lawyer, there was a good UK turnout on the supplier side. I came across UK-based people I know from names familiar in Britain (whether or not of UK origin) as well as with non-UK people, both new and familiar. I am not going to list them all, mainly for fear of omitting one, but the point is that those who supply software and services to a litigation market worth billions per year were there in force, as were a few of the London law firm litigation support managers, but I saw no UK lawyers or practice managers. I did, however, go to the Museum of Natural History, where I saw a lot of dinosaurs.
Attendance was down this year, for reasons which were not necessarily the obvious ones. Many businesses are cutting travel budgets; many people fear that if they leave their desk the company will sell it, or burn it to keep warm; many, I reckon, are bothered about the perception of absence, and are ditching all kinds of initiatives – useful marketing or client-getting initiatives – because they are more worried about setting an example of frugality than about the actual purpose of the journey. It seems daft to me – the time to acquire skills, to throw yourself at marketing initiatives, and to put yourself about is now, particularly if you are in one of the few industries where work is likely to pick up.
That is, of course, both a relative and an untestable proposition. If anyone purports to tell you where the market is going in 2009, don’t listen. Yes, it is very possible that businesses will have to bring or defend litigation or be forced to respond to the increased attentions of regulators. Corporates will certainly look more closely at their costs and may respond by investing in in-house systems for document retention, for litigation readiness and perhaps for taking part of the actual discovery process in house – I sat on a panel with one such last week who reckoned that his company recovered its capital costs well within one year relative to the cost of sending all the work to outside lawyers and providers. All this is both an encouragement to those who sell applications and services and a spur to lawyers – well, to Mark Surguy and Pinsents, anyway – who can advise the clients what to do.
There was a chill wind blowing around the Hilton, scattering the CVs of those in the industry who – rather suddenly in some cases – found it expedient to turn LegalTech into a large impromptu recruitment fair. Acquisitions, layoffs, withdrawals from the market, and, in one case, a sudden shut-down, all make for a nervous atmosphere.
A scribbled note apologises for SPi’s sudden absence from their own session
It is not just the employees, the shareholders and the banks who have cause to be nervous; clients will have committed resources for, developed relationships with, and entrusted data to third parties. When, as Craig Ball apparently put it recently, you may be able to buy your EDD services provider in 2009 for less than you paid for its services in 2008, clients are going to choose their providers with extra care. There are many ramifications here deserving a fuller analysis which I will leave to others.
Whatever is unclear (and much is unclear, in this market as in everything else) electronic data is not going to disappear. It must drive a move by corporates to take work in house – suddenly the conflict between capital spend on in-house resources and third party spending acquires a new dimension as companies consider their dependence on outsiders and not just the cost. It will drive consolidation, with some big players getting bigger. Size is not everything, however, in this as in other things. Recession has a knack of bringing on new talent, small, nimble providers able to move quickly, new opportunities and new ideas.
What applies to suppliers applies equally to their law firm clients, and in the UK as well as elsewhere. There is a space for lawyers who are fleet of foot and able to appreciate that the old costs models will come under scrutiny, that astute use of the rules coupled with more active judicial management and the sensible use of technology can give them an edge over larger rivals. LegalTech would have given them the opportunity not just to see the technology but to sniff the wind.
As well as its dinosaurs, the New York Museum of Natural History has some wonderful tableaux of animals – hunters and hunted, killers and prey, survivors and those doomed not to survive. I went there with my son, planning no more than an interesting afternoon out, but analogies and parallels crowded around us.
Not all the dinosaurs were absent from New York in LegalTech week
Species rise, dominate and fall away, wiped out by a failure to adapt to a changing environment or through some cataclysm. Apparently immutable landscapes change with the climate and with agricultural and industrial developments. Man evolves, his tools and weapons advancing along with the size of his cranium. All in all, the subject-matter of the discussion in and around the Hilton was pretty closely mirrored in the museum.
This post is just an overview on my first day at a keyboard since my return – the super-light, long battery-life laptop which I bought for such trips was barely opened. Other posts will follow, about the panels I spoke at or attended, a challenging keynote speech by Judge Facciola, and other things which came my way in New York.