30K Feet: Key Takeaways from Legaltech

Harris Williams professionals regularly attend industry conferences and events. On the flight home, they share three key takeaways to help shape your priorities.

Event: Legaltech

Report by: Derek Lewis, managing director, and Bryce Walker, vice president, both of the Harris Williams Business Services Group

Why is this an important event for professionals active in this industry?

Lewis: Size and scope: Legaltech is the largest legal technology event of the year. As such, it enables us to keep current with technology trends in the legal sector and check out the latest products and services intended to meet the technology needs of law firms and corporate legal departments.

Which trends, companies or business models were top of mind at the event?

Lewis: Both corporate law departments and law firms are professionalizing their organizations to manage their cost-effectiveness and to be more productive. This is driving demand for technology and services that can help organizations run more like businesses that manage P&Ls. 

Walker: Being the general counsel at a large organization is a much more complicated task today and requires more of a business focus than it has in the past. The General Counsel's office is now managing legal spend throughout the organization, both internally and externally, and making decisions about insourcing and outsourcing to optimize cost, similar to a sophisticated procurement organization. 

Lewis: To build efficient and effective legal operations, a growing number of corporate legal departments and law firms are adopting the 12 core competencies laid out by the Corporate Legal Operations Consortium. Those competencies include using data analytics, leveraging technology, implementing process improvements and realizing cost savings through supplier management. Building these competencies brings many benefits: It helps legal teams manage costs, and it ensures compliance with regulations and corporate policies. It also helps them better manage significant risks such as cybersecurity. And it drives robust demand for new technologies and related services. 

What opportunities are these dynamics creating for strategic buyers and private equity investors?

Walker: For one thing, they’re creating a significant growth opportunity. Legal technology is a booming, cycle-agnostic industry: It supports a diverse array of industries, and litigation does not typically cycle with the economy. Companies with strong management teams, scalable technology platforms and a solid track record of organic growth are clearly attractive to both strategic buyers and financial investors. 

Lewis: Also, companies with broad solution sets—or that can enlarge their suite of services over time—are well positioned for growth. As the technology needs of law firms and corporate legal departments expand, providers that are already serving those customers in some capacity are in an advantageous position to provide additional products and services because they have a trusted relationship over an unknown competitor. Many eDiscovery providers, for example, are beginning to provide ancillary products and services to their eDiscovery customers, such as information governance to help organizations protect sensitive data, reduce eDiscovery and storage costs, and more easily comply with legal and regulatory requirements. 

A broad solution set also helps companies be the provider of choice as corporate legal departments move toward relying on a smaller number of vendors. Many are consolidating their sourcing in an effort to gain scale pricing, simplify operations and achieve consistency across the enterprise. This gives legal technology companies that meet an array of customer needs an advantage over their competitors as the playing field narrows. 

Published March 2020