Bringing the Disruption of the Legal Services Market into the Law School Classroom

Is it important to help law students understand the disruptions that are now occurring in the legal industry?  Well, let me ask a more fundamental question.  How can a law professor efficiently obtain better information on these complex and diffuse changes? None of us legal academics are experts in this area, and that's a problem in and of itself.

In the process of struggling with these questions, I decided to carve out 15% of the grade in my Corporations class for team-based profiles of NewLaw companies.  Here is how I described the conundrum in my syllabus:

The legal industry is changing in dramatic ways, including the creation of new legal businesses that rely upon technology and process design to solve legal problems that have traditionally been handled by lawyers. These businesses are often financed and managed by nonlawyers, which some of you may find surprising. ...

Remarkably, very few practicing lawyers grasp the type of industry context described above ...  Yet, the influx of financiers and technologists is likely going to have a dramatic effect on your future legal careers.  These changes are extremely foreign to the substance of traditional legal education – we (the legal professoriate) just don’t understand the breadth and depth of the changes that are now occurring.  Rather than sweep this uncomfortable fact under the rug, let’s do what great lawyers do with their clients.  Let’s learn about the business and the industry so that we understand the context.  Armed with this information, we can make better decisions with regard to our own careers.

Two months ago, I circulated the full assignment to the class, divided the class into teams, and gave students two weeks to select a company.  The only restrictions were no duplicates, so first-come first-serve, and the company had to be a non-law firm business operating, partially or entirely, in the legal industry.  (BTW, JB Ruhl's Law Practice 2050 course at Vanderbilt Law tackles this topic head-on.)

Students made their presentations this past Monday evening (Nov. 18) in Indiana Law's Moot Courtroom.  It was a marathon session that ran nearly four hours.  Because of the novel content, several practicing lawyers showed up to see the presentations. The following companies where profiled:

• AdvanceLaw.  Privately held company that operates a closed community of legal departments who share information on law firms and individual lawyers in order obtain better quality at a lower cost.  Discussed on the LWB here.

• Axiom Law.  Venture and private equity-based company that helps legal departments more efficiently manage and source their legal needs. Discussed on the LWB here.

• Black Hills IP.  Privately held onshoring company that does highly specialized IP-related paralegal work -- their internal motto is "innovate and automate."  Founders were involved in an earlier LPO that sold to CPA Global a few year ago. Discussed on the LWB here.

• Datacert.  An e-billing platform for legal departments that has added on a large overlay of data analytics so legal departments can more aggressively benchmark and monitor their expenses to outside counsel.

• Ernst & Young.  Big Four accounting firm that hires an enormous number of law grads each year for its tax and consulting practices.  Very much set up for the tastes and preferences of Millenial professionals including training, work space, and work-life balance.

• Exemplify.  Start-up company founded by Professor Robert Anderson at Pepperdine Law and his student.  Used super computer technology and inductive computational linguistics to identify the market standard language in a myriad of forms found in the SEC Edgar database. Will speed up negotiations on what is "market"; setting stage for eventual market convergence on standards.

• Huron Consulting.  Publicly held consulting firm that formed out of the ashes of Arthur Anderson's post-Enron collapse.  Although a business consulting organization, a surprisingly large part of their business is e-discovery through attorneys in U.S. and India.  This group trudged through the company's 10Ks, which was a great educational experiemce for them. Discussed on the LWB here.

• Integreon.  Venture- and private equity-based LPO that has tried to distinguish itself with its global platform and language capabilities.  The company recently cut a deal with Microsoft to handle a large tranche of their patent portfolio work.

• KM Standards.  Privately held legal knowledge management company that is trying to deconstruct the logic of contracts into standardized terms to enable autonmation and reduce ambiguity (and thus litigation).  Potentially very disruptive.

• LegalForce.  Privately held company hoping to recapture the lost consumer and start-up market through a novel storefront strategy.  Financed at least initially through LegalForce's  enormously successful online trademark practice run by the company's founder, Raj Abhjanker.  More trademarks granted by PTO than any other law firm.

• Manzama.  Privately held company in Bend, Oregon that scrapes the Internet with machine learning technology to filter business intelligence for law firms and other professional service firms track.  Enormously scalable. Daily results presented through a dashboard technology. 

• Modria.  Online dispute resolution system that enables businesses and governments (mostly municipalities) to avoid costly, in-person legal proceedings to resolve a steady stream of similar disputes that are part of running a business or government. Discussed on the LWB here.

• Neota Logic.  Privately held company founded by former Davis Polk partner and CIO Michael Mills.  The company specializes in the creation of expert systems that can improve the quality and efficiency of many transactional and compliance related activities.  

• Pangea3.  LPO with substantial operations in India.  Initially back by venture capital in 2004 but subsequently sold to Thomas Reuters in 2010.  Employs roughly 1,000 lawyers in the US and India.  Discussed on the LWB here.

• Recommind.  Privately held company that specialized in predictive coding for use in document review and e-discovery.  Founders were graduate students in Artificial Intelligence programs at Stanford and UC Berkeley in early 1990s.  Discussed on the LWB here. 

• Stewart Richardson.  A privately held Indianapolis-based deposition services company that has gradually and successfully expanded into a broader array of law firm support services.  Very focused on technology to make the job of clients easier.  

The assignment was an experiment, albeit one that worked very well.  Both students and the visiting lawyers reported surprise at the depth and breadth of the innovations taking holding the legal market.  

Although some of the innovations where clearly eroding the need for traditional legal service jobs, the profiles also revealed the tremendous opportunities for those willing to stretch into the law and technology space.  Many students commented that the evening drove home the point that they need to proactively obtain new skills and knowledge.  Why? Because the emerging market has no secure place for the complacent or mediocre.  Better for them to discover it in the course of an assignment than for me to say and have it fall on deaf ears.

Many thanks to the profiled company, who exhibited enormous generosity in helping my students complete this assignment.   Remarkably, most groups had the benefit of a lengthy conference call with senior leadership.  My only regret is that more practicing lawyers did not attend.  My students, who have have 1L team and presentation experience, brought their "A" game.  I will fix that in the next class, as there is no shortage of NewLaw companies to be profiled.