Hello, and welcome to another edition of The Law Firm Disrupted. I'm Law.com reporter Roy Strom, and this weekly email briefing attempts to make sense of the biggest challenges and opportunities facing law firms today. Let me know what you think at [email protected].

➤➤ Sign up here to receive next week's The Law Firm Disrupted straight to your in-box as part of your American Lawyer subscription.

 

An Antidote for Legal AI Hype

 

The Legal AI Hype Train has moved fast and far enough that there is a regular blog documenting “law firm marketing bullshit.”

Even executives at “artificial-intelligence based” companies have pushed back against the hype around AI in legal. Take this tweet from Kira Systems CEO Noah Waisberg quoting Julian Tsisin, who works in legal technology at Google:

 

 

Waisberg added the 100 emoji as if to say, “Right there with you, buddy.”

The problem isn't that AI is useless. It's that AI has become a buzzword; a marketing touchstone growing more worn out with every hopelessly inane rub. Law firm and corporate marketing shouldn't be based on what a technology is(AI, of course). It should tell you what it does, and the customer should know why that's important. 

For that reason, I applaud the approach of Pieter van der Hoeven, co-founder and CEO of growing legal tech company Clocktimizer.

“It certainly classifies as AI what we do,” van der Hoeven said in a phone interview from the Netherlands. “But we just say, whatever technology is behind it, it's a solution that's working. That very pragmatic approach seems to resonate well with law firms.”

(Van der Hoeven said he “may be too pragmatic to be in marketing,” before self-reflectively adding “I don't know.”)

Anyway, his product aims to solve a well-known problem facing law firms hoping to provide useful budgets to clients, which is they don't have great insights about how much time a given task or matter actually takes.

Clocktimizer pulls information from a law firm's billing systems—data firms already have—and sorts it by discrete tasks. To be more precise, it pulls the billing narratives.

Once that unstructured data is sortable, it can be used in all sorts of ways. A firm could analyze whether a new workflow is more efficient by comparing it to historical matters, for instance. That can tell you how valuable an efficiency change really was—or wasn't. The data can also help clients better understand why a matter costs what it does. Or, perhaps, it could tell a law firm how much of its associates' time is being spent on tasks at risk of automation.

Van der Hoeven doesn't want you just to take his word for it. The company lets law firms do free trials of its software to see how (or if) it actually works using real time entries. About 20 firms are currently testing it, he said, and another 20 are already paying for the software, including DLA Piper and Hogan Lovells.

As for the product trials?

“That falls within the put-your-money-where-your-mouth-is and actions-speak-louder-than-words type of marketing that we prefer to be doing,” van der Hoeven said.

That practical approach should be more widespread because it would make life easier for law firm CIOs.

 

Unclear Ramifications 

 

The first major outsourcing deal involving a legal department was announced this week, as legal service provider UnitedLex Corp. announced it would take on roughly 200 employees from the legal department of DXC Technology Co. in order to handle the IT outsourcing company's contract management services.

As I wrote for The American Lawyer, the deal is not expected to greatly threaten DXC's current law firm providers. UnitedLex CEO Dan Reed said less than 10 percent of the work his company will now be doing for DXC would have previously been handled by Big Law.

But any potential future impact on Big Law is less clear. If it proves a worthwhile model for legal departments, the history of outsourcing companies suggests they could take on larger portions of legal department operations and work. That may change who law firms' clients are, and how focused they are on the bottom line.

 

Roy's Reading Corner:

 

➤ Do Mergers Work? Yes, at least according to this analysis by ALM Legal Intelligence's Hugh Simons and Nicholas Bruch. Intra-Am Law 200 combinations result in an average climb of 23 places in the profits per equity partner rankings from the five years before to the five years after a combination, Simons and Bruch report.

One main takeaway from the ALI report is that mergers, rather than lead to practice group bloat, actually refine a law firm's focus on its most profitable areas.

The two also state: “The decade ahead will be turbulent for Big Law. As profits weaken and some firms unravel, high-performing partners will look for stronger platforms. They will be attracted to (and retained by) firms that provide the stability afforded by strong fundamentals (as reflected in high average compensation for all partners) and that possess the ability to pay their high-performing partners competitively (as reflected in high PPP rankings). Where high-performing partners go, attractive clients follow.”

➤ Disrupted, Literally: The slow-motion demise of Sedgwick continues. This week, two high-profile insurance lawyers from the firm's headquarters in San Francisco said they would join Clyde & Co, confirming long-rumored talks about Sedgwick lawyers heading to the insurance-focused U.K. firm. It remains to be seen how many make the move, but my colleague Joseph Evans at Legal Week in London reports that it could be up to 25 partners.

➤Divorces Disturbed: A chat bot wants to help you get your next divorce. (Or your first one.) Gabrielle Orum Hernández writes about a voice tool called “Larissa” that lets you ask free, simple questions about divorce law. “It's geared toward real people that don't really understand legalese,” the company's founder, Tom Martin, told Hernandez. Because robots apparently understand legalese better than “real people.”

 

➤➤ Thank you for reading The Law Firm Disrupted. You can check out other new briefings from my Law.com colleagues and sign up here.

Please share your thoughts on how the law firm market is changing:[email protected].

Hello, and welcome to another edition of The Law Firm Disrupted. I'm Law.com reporter Roy Strom, and this weekly email briefing attempts to make sense of the biggest challenges and opportunities facing law firms today. Let me know what you think at [email protected].

➤➤ Sign up here to receive next week's The Law Firm Disrupted straight to your in-box as part of your American Lawyer subscription.

 

An Antidote for Legal AI Hype

 

The Legal AI Hype Train has moved fast and far enough that there is a regular blog documenting “law firm marketing bullshit.”

Even executives at “artificial-intelligence based” companies have pushed back against the hype around AI in legal. Take this tweet from Kira Systems CEO Noah Waisberg quoting Julian Tsisin, who works in legal technology at Google:

 

 

Waisberg added the 100 emoji as if to say, “Right there with you, buddy.”

The problem isn't that AI is useless. It's that AI has become a buzzword; a marketing touchstone growing more worn out with every hopelessly inane rub. Law firm and corporate marketing shouldn't be based on what a technology is(AI, of course). It should tell you what it does, and the customer should know why that's important. 

For that reason, I applaud the approach of Pieter van der Hoeven, co-founder and CEO of growing legal tech company Clocktimizer.

“It certainly classifies as AI what we do,” van der Hoeven said in a phone interview from the Netherlands. “But we just say, whatever technology is behind it, it's a solution that's working. That very pragmatic approach seems to resonate well with law firms.”

(Van der Hoeven said he “may be too pragmatic to be in marketing,” before self-reflectively adding “I don't know.”)

Anyway, his product aims to solve a well-known problem facing law firms hoping to provide useful budgets to clients, which is they don't have great insights about how much time a given task or matter actually takes.

Clocktimizer pulls information from a law firm's billing systems—data firms already have—and sorts it by discrete tasks. To be more precise, it pulls the billing narratives.

Once that unstructured data is sortable, it can be used in all sorts of ways. A firm could analyze whether a new workflow is more efficient by comparing it to historical matters, for instance. That can tell you how valuable an efficiency change really was—or wasn't. The data can also help clients better understand why a matter costs what it does. Or, perhaps, it could tell a law firm how much of its associates' time is being spent on tasks at risk of automation.

Van der Hoeven doesn't want you just to take his word for it. The company lets law firms do free trials of its software to see how (or if) it actually works using real time entries. About 20 firms are currently testing it, he said, and another 20 are already paying for the software, including DLA Piper and Hogan Lovells.

As for the product trials?

“That falls within the put-your-money-where-your-mouth-is and actions-speak-louder-than-words type of marketing that we prefer to be doing,” van der Hoeven said.

That practical approach should be more widespread because it would make life easier for law firm CIOs.

 

Unclear Ramifications 

 

The first major outsourcing deal involving a legal department was announced this week, as legal service provider UnitedLex Corp. announced it would take on roughly 200 employees from the legal department of DXC Technology Co. in order to handle the IT outsourcing company's contract management services.

As I wrote for The American Lawyer, the deal is not expected to greatly threaten DXC's current law firm providers. UnitedLex CEO Dan Reed said less than 10 percent of the work his company will now be doing for DXC would have previously been handled by Big Law.

But any potential future impact on Big Law is less clear. If it proves a worthwhile model for legal departments, the history of outsourcing companies suggests they could take on larger portions of legal department operations and work. That may change who law firms' clients are, and how focused they are on the bottom line.

 

Roy's Reading Corner:

 

➤ Do Mergers Work? Yes, at least according to this analysis by ALM Legal Intelligence's Hugh Simons and Nicholas Bruch. Intra-Am Law 200 combinations result in an average climb of 23 places in the profits per equity partner rankings from the five years before to the five years after a combination, Simons and Bruch report.

One main takeaway from the ALI report is that mergers, rather than lead to practice group bloat, actually refine a law firm's focus on its most profitable areas.

The two also state: “The decade ahead will be turbulent for Big Law. As profits weaken and some firms unravel, high-performing partners will look for stronger platforms. They will be attracted to (and retained by) firms that provide the stability afforded by strong fundamentals (as reflected in high average compensation for all partners) and that possess the ability to pay their high-performing partners competitively (as reflected in high PPP rankings). Where high-performing partners go, attractive clients follow.”

➤ Disrupted, Literally: The slow-motion demise of Sedgwick continues. This week, two high-profile insurance lawyers from the firm's headquarters in San Francisco said they would join Clyde & Co, confirming long-rumored talks about Sedgwick lawyers heading to the insurance-focused U.K. firm. It remains to be seen how many make the move, but my colleague Joseph Evans at Legal Week in London reports that it could be up to 25 partners.

➤Divorces Disturbed: A chat bot wants to help you get your next divorce. (Or your first one.) Gabrielle Orum Hernández writes about a voice tool called “Larissa” that lets you ask free, simple questions about divorce law. “It's geared toward real people that don't really understand legalese,” the company's founder, Tom Martin, told Hernandez. Because robots apparently understand legalese better than “real people.”

 

➤➤ Thank you for reading The Law Firm Disrupted. You can check out other new briefings from my Law.com colleagues and sign up here.

Please share your thoughts on how the law firm market is changing:[email protected].