Like it or not, we live in interesting times. They are times of danger and uncertainty; but they are also the most creative of any time in the history of mankind.
Robert Kennedy
The ILTA Conference I am attending this week is great for seeing where the legal tech industry is going. This is true especially for Big Law and large corporations. One trend is clear: we are witnessing the second wave of Gen AI in this legal market segment. In a word: its consolidation.
The First Gen AI Wave
In the first wave of Gen AI development in the legal space, various provider groups were scratching their heads over Gen AI. They were figuring out how to use the tools with their specific databases. Legal research providers like LexisNexis, Thomson Reuters, and vLex developed (or purchased) Gen AI platforms to work with their data. This data was primarily case law and regulatory and statutory materials. These companies came up with sophisticated Gen Ai tools to work with their data, but the utility of their tools was limited to their data. The providers had no ability, for example, to run programs on a customer’s internal documents.
Document management service providers like NetDocuments and iManage maintained large data sets of internal company documents. This data was private to the company and protected. These providers worked on Gen AI tools that would mine and use those internal materials. They needed GenAI tools to enable their customers to obtain query responses based on that internal data. Their Gen AI tools were also limited by the data that they had: they could not access the legal research providers’ case law and regulatory and statutory material.
Then you had the Ediscovery providers. These providers were experts in creating litigation holds and then collecting and reviewing materials on specific projects. They were skilled, in other words, in finding certain subsets of data in giant haystacks. The providers needed to be flexible and tailor their work processes to the problems and projects presented. Providers like Relativity and Disco begin developing Gen AI tools to work with their existing AI and automation tools. The combinations to enabled sophisticated search, retrieval, and review of internal company documents. Like the document management and legal research groups, their Gen AI tools were limited by the data to which they had access.
A customer would need to go to one place for legal research tools, one place for document management tools, and one place for Ediscovery service to fully take advantage of the Gen AI capabilities
So, in the first wave, a customer would need to go to one place for legal research tools, one place for document management tools, and one place for Ediscovery service to fully take advantage of the Gen AI capabilities. Not a desirable solution for most customers who want one stop services.
The Second Wave
Of course, it became apparent that marrying the internal databases of a company with the case law, regulatory, and statutory databases would create a better use case. It would better enable customers to have more of a one-stop tool. Raymond Bentinck Chief Product Officer of Opus2, a leading litigation case management provider, put it this way in his presentation today, “Clients want ai to be single source of truth.” They want “a single solution that manages all case docs and information.” Daniel Bonner, Director of Client Solutions for the eDiscovery provider Level Legal stated it even more forcefully: clients are “tired of going from provider to provider.”
As a result, we began to see partnerships and integrations between the legal research providers and the document management service providers to integrate their databases and GEn AI products. This trend is fully evident here at ILTACon. All three of the big legal research providers now have these partnerships or integrations with the large document management companies. Their Gen AI platforms can work seamlessly with the internal documents of customers as well as the legal research providers’ data.
The Gen AI tools can now respond to natural language queries based not only on case law, regulations, and statutes from the legal research firm’s database but also on internal documents and past efforts housed in the databases of the document management service providers. These partnerships and integrations significantly increase the power and benefits of the GenAI tools. These benefits range from generating better quality documents to creating documents that bear the firm’s or businesses’ unmistakable aura and culture and better training.
Why the DMS companies and not the eDiscovery providers? The DMS providers house all the documents, not only for businesses but also for law firms. Their reach is broader than that of many of the eDiscovery providers. The DMS providers needed the GenAi providers to broaden what they could provide and what their customers wanted. So, the combination was natural.
The Ediscovery providers have significant capabilities and flexibility in dealing with data in specific situations
Where Does This Leave The eDiscovery Providers?
The lines between what the legal research companies, the DMS providers and ediscovery providers are, as Jake Heller of Thomson Reuters put it in his product briefing, blurring. While the combinations thus far have been between the legal research and document management providers, the Ediscovery providers have significant capabilities and flexibility in dealing with data in specific situations which will continue to make them players.
A Third Wave?
And the trend is evident: customers want one stop shopping. They want to go to one place for all their needs.
So someone somewhere, will get the bright idea to marry all three groups and apply Gen AI tools to legal research, document management, AND eDiscovery. After all, what each of these groups does and the tools they need to serve their customers are similar.
In a word: consolidation.
We live in interesting times.
Photo by BAILEY MAHON on Unsplash