If you're a kid with an algorithm and a dream, chances are you may be asking yourself: Is now a good time to stick a toe into the fast-paced world of e-billing?

The short answer is that yes, demand for such technology from legal departments is strong, especially the insights into matter spend and overall efficiency that can be attained by analyzing financial data. But that doesn't necessarily guarantee a winning hand for startups, who will likely have to live the long shadows of the market's more established companies .

Kevin Harris, a project manager with Orion Law Management Systems Inc., thinks that there might actually be fewer e-billing players operating now than when the market first started developing in the late 1990's. Due to the power e-billing gave clients to apply downward pressure on legal services, the practice flourished—and  led to a round of acquisitions and consolidation, Harris said.

In the absence of an innovative new approach or product, companies entering the space now could resemble David going up against several Goliaths.

“There's almost this glass ceiling, if you will. It's very hard to get into that marketplace … as a company, if I'm a startup in e-billing, where is my profit margin going to be?,” Harris said.

One of the key problems that startups attempting to enter the e-billing space face is being able to provide big data analytics, which are pivotal for law firms and corporate legal departments alike.

Carly Toward, who leads value propositions, market positioning and industry insights for Thomson Reuters corporate legal departments, pointed to cost control as a key priority for legal departments and identified e-billing analytics as the best way to approach that task.

“There's large, structured data sets within e-billing and with that comes the opportunity to deploy machine learning and really provide a lot of data insights in terms of business intelligence and so I think you'll see a lot in the coming years from those areas,” Toward said.

But while data sets are valuable and in high-demand, they also don't just crop up overnight.

Jonah Paransky, executive vice president and general manager of Wolters Kluwer ELM Solutions, Inc. said that law firms are interested in using information derived from e-billing to develop budgets and allocation models, but attempting to do those things using the data from, say, one client or company is not enough.

“You hear a lot of people talk about AI and big data and machine learning and the dirty secret of all of those capabilities is they only work if you have lots and lots and lots of data,” Paransky said.

Wolters Kluwer, for example, maintains a repository of anonymous e-billing data that clients have voluntarily contributed. Organizations can use that information to draw comparisons to other similarly situated departments at other companies.

It's difficult to imagine startups having access to that kind of a data pool right out of the gate, but that hasn't precluded continued movement inside the e-billing space. Ralph Wutscher, COO and chief legal officer of Incubator LLC, indicated that in some instances, law firms and tech companies may be joining forces to bring that work away from the market and closer to home.

“Tech companies are partnering with law firms. Law firms are setting up their own tech companies more. They set up departments within the law firms, like a tech department, to do this stuff,” Wutscher said.