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Getting Educated at LegalTech New York 2010

By Conrad J. Jacoby, Published on March 27, 2010

For the legal community, the New York LegalTech show and conference has long been one of the preeminent opportunities to catch a glimpse of the future of legal technology. Sometimes, LegalTech has been spectacularly wrong in its "group think" predictions--I clearly recall the year that the exhibit hall was dominated by Lotus Notes-based solutions, most of which had completely disappeared within a year of their triumphant release. Most of the time, however, the conference provides a surprisingly accurate snapshot of litigation support, electronic discovery, and even the health of the legal industry as a whole. For this alone--and LegalTech offers much more--the show is a must-attend event for hundreds, if not thousands of legal professionals.

NY LegalTech has been criticized for years, however, for the "conference" side of the event. Though it offers dozens of educational presentations, a good number of which are CLE certified, the conference seems to have more than its fair share of sessions that never move beyond the most elementary discussion of their subject matter or are led by faculty who appear to be chosen for reasons other than their subject matter mastery and presentation skills. These presentations seem all the more jarring because the majority of conference attendees already have sophisticated knowledge of many session topics, and they attend these programs to increase their existing knowledge, not to be tutored in basics they have known for years.

LegalTech 2010 continued to have its share of weak presentations, but I was pleased to see that a number of conference sponsors took the conference's persistent criticism to heart. Perhaps in keeping with the "back to work" ethos that permeated the entire conference, I found many more sessions than in the past that focused on practical examination of specific problems, rather than entry-level explanations of general issues. Even sessions featuring judges tended to discuss specific issues and their potential resolution, rather than the theoretical discourse that's so common when judges must balance their ability to shape legal analysis against their need to appear impartial.

For me, though the educational sessions always offer some new information, I continue to get a greater education by visiting the exhibit hall and spending time with the vendors there. In wandering the aisles this year, for example, I could see not only the hundreds of specific solutions on display, but also industry reactions to the flood of e-discovery-related legal opinions that were issued in 2009. And, while LegalTech encourages all manner of practice support vendors to attend the show, the vast number of e-discovery solutions on display--overpowering the diverse mix of other exhibitors--also said a great deal about the current focus of the legal and legal technology industries.

So what are some of the more interesting things I picked up at LegalTech this year? Here are a few that come to mind.

  1. Clients are getting even more serious about taking direct charge of e-discovery projects to save costs and to reduce business disruption.

    It was impossible to escape exhibitors who were offering enterprise-level data collection tools. Although representatives from each of these companies would still agree (if pressed) that using a competent third party professional or collection service remains the gold standard for neutral, unassailable data harvesting, the increasing frequency of pre-discovery meet and confer sessions to hammer out discovery protocols has made it possible for many litigants to negotiate less invasive and expensive data collection protocols. In addition, while litigants will always disagree to some extent about the appropriate procedures for discovery data collection, years of education within the legal community have somewhat reduced the knee-jerk skepticism with which self-collection is viewed

    Dramatic growth in the number of enterprise data collection systems, with or without accompanying "early case assessment" analytical functionality, suggests that vendors are seeing corporate litigants invest ever more heavily in infrastructure that ostensibly reduces the costs of data collection and standardizes collection procedures across the organization's entire litigation portfolio. Tools that automatically build audit information into each file acquisition add further reliability to ESI that has been collected by a self-collection tool, helping establish that these copies contain the full range of digital information that the originals possessed. I expect to see some of the less-well-funded or advertised tools wither away as the market matures, but I believe that we will continue to see continued growth in defensible self-collection solutions.

  2. Hosted litigation support platforms continue to take market share from local-based litigation support software.

    Traditional litigation support software systems like Concordance and Summation continue to have a huge installed user base. However, it's also clear that many legal teams are increasingly using outsourced, web-based repositories to host their discovery documents. Several basic reasons continue to drive this process.

    First, because many law firms still have insufficient in-house litigation support staff and resources to quickly respond to every legal team's needs, outsourced hosting can offer faster access to discovery documents than loading the documents in-house. Second, it's never been easier--or more expected--for lawyers to have access to their documents at any location and at any time. Web-based document repositories offer full access anywhere the legal team can find Internet access. Instead of laboriously copying the latest version databases onto laptop computers--or forcing users to attempt VPN connections over uncooperative hotel broadband networks--web-based repositories offer unlimited remote access without the security and configuration issues that arise when remotely connecting to law firm networks. Third, outsourcing a document repository relieves significant pressure on law firm network infrastructure. With multi-terabyte e-discovery projects becoming a common occurrence, it simply doesn't make sense for law firms to continually invest in ever-larger amounts of network storage for their local networks. Increased network storage also carries significant costs that can't necessarily be passed through to clients, such additional support staff and increased data redundancy / disaster recovery overhead.

    As an aside, I've found it interesting that few clients and law firms appear particularly concerned about the security of using web-based repositories to host confidential, even highly confidential, client documents. I certainly believe that the repositories themselves have relatively good protection against intruders, but lawyers pay surprisingly little attention to the other end of the digital pipe--the computers they use to access these systems. I've encountered more than a few lawyers sending e-mail messages or even reviewing documents in a Starbucks coffee shop. Public wifi hot spots are one of the least secure ways to access the Internet, and bad guys can use a number of electronic eavesdropping methods to capture exactly what information is being sent to and from a given computer. As a practical matter, the odds that this type of snooping will lead to the theft of sensitive client documents remains low, but that risk is still greater than zero. It will be interesting to see whether any litigant ever alleges that a document's legal privilege status has been waived because the document was intercepted during its transmittal over a public network.

  3. The phrase "Early Case Assessment" continues to be overused and under-defined.

    In 2009, "Early Case Assessment" ("ECA") was one of the hottest buzz-words in the legal software industry. Suddenly, it seemed, everyone needed to have an "early assessment tool," as though the concept of early evaluation of legal disputes was a revelation to lawyers (generations of whom had been doing this type of analysis, albeit with limited technological assistance, for decades, if not centuries). LegalTech 2010 continued this trend by exhibiting a broad range of early case assessment tools for quickly extracting intelligence from discovery documents. However, as with other popular jargon, the initial meaning of this phrase continues to be broadened and weakened.

    Today, it appears that some traditional litigation support software is being marketed as an early case assessment solution by simple virtue that the system provides the ability to run full-text searches against the database records loaded into it. Such marketing efforts are correct in that virtually any search tool can be used to identify documents, but these efforts also conveniently ignore the speed with which more sophisticated ECA systems can be deployed or the degree to which ECA tools try to streamline manual search so that the least amount of work possible is required to identify documents containing the most critical information. I haven't gotten the impression that sophisticated litigants or lawyers are being fooled by these apples to oranges marketing claims, however, so it's unclear whether this strategy will generate new sales.

    As confused as the ECA market may be at this time, it's clear that litigants remain keenly interested in developing better valuation of a legal dispute early in the process. As ECA tools continue to mature, it will be interesting to see whether these tools are making a material difference in how litigation (and pre-litigation) matters are resolved. It will also be interesting to see whether law firms that aggressively market ECA to its clients will capture additional business. It doesn't appear that litigants are choosing outside counsel based on the degree to which they are using electronic ECA tools, but in-house counsel are continuing to take a much closer look at ways that legal disputes can be resolved quickly and at the least expense.

  4. Outsourced document review remains on the cusp of wide-spread adoption.

    Outsourced document review, whether conducted in the United States or offshore, continues to be a hot discussion topic. Notwithstanding the ABA's opinion generally approving of properly supervised outsourced document review, I have heard some lawyers continue to question whether non-law firm document review services, some of which are marketing themselves as "soup to nuts" solutions for all aspects of discovery document reviews, are setting themselves up for unauthorized practice of law charges.

    A twist in this continuing debate, however, is that it's unclear exactly how many legal teams are using outsourced review at all. For every case study that is published, hundreds of other legal teams consider and then reject the practice of turning over document review to a non-law firm service. Outsourced review would seem to be a logical continuation of the trend of engaging lower-cost "discovery counsel" to assist with first and second-level document review, but it's still not typical case strategy for most litigants.

    LegalTech's exhibit hall showcased a number of offshore document review services, each boasting of its secure review location and scalability to meet the needs of small and large document reviews. When pressed, however, many of these solutions providers admitted that outsourced review remains a "growing market"--meaning that they're still not as busy as they'd like to be. As the legal market recovers from a generally weak 2009, it will be interesting to see the extent to which these services are used. It may well take until LegalTech 2011 to develop a good sense of whether outsourced review has moved into the mainstream--or whether it will remain on the cusp of general acceptance for yet another year.

Conclusion

In great contrast to last year, LegalTech New York 2010 offered an upbeat assessment of the legal market for the coming year. Increased investment in tools, combined with evidence of an upturn in the amount of legal work taking place, suggests that lawyers and legal technologists alike are finding themselves busier and more confident about the future of the legal marketplace. The products and services at the show--along with some of the advanced discussion of prominent e-discovery issues--also indicate the continuing sophistication of the legal community as it continues to address the legal problems caused--and solved--by technology.