Running Legal Like A Business - Ch. 4 - One ELM Platform to Rule Them All

In 2018 legal tech investment exceeded $1b for the first time. Though COVID appears to have dampened the upward trajectory, investment clocked in at $1.4b in Q3 with a year-end number expecting to come in at $1.8b. Legal tech has grown to account for 2%+ of the nearly $74b in venture capital funding as of 2020.  

It is no longer unusual for law schools, corporate law departments, and law firms to incubate new legal tech-forward businesses as a way to diversify business risk, to focus innovation and to drive revenue.  Also, acquisition and consolidation of solutions by venture-backed law companies is a given.

As legal technology ecosystems become more complex, the question arises, what will become the norm going forward?  Will legal tech clients continue to string together best-in-class point solutions?  Will there become one ELM (enterprise legal management) system to rule them all? Or will legal technology solutions be swallowed by a whale (e.g. an enterprise management system on the order of an SAP or Oracle). 

Earlier this month Buying Legal Council hosted a webinar "What NOT to do in 2022. LEGAL TECH Trends to IGNORE!" with Matt DenOuden of Onit and Robin Snasdell of Consilio. An audience poll on this exact question came back with the majority vote for best-in-class point solutions (1). 

A Hub Platform Approach

This is the conversation in which Liam Brown, Sharath Beedu and Daniel Katz of Elevate situate chapter 4 "All Together Now: The Advent of a Single ELM Legal Operations Platform" (2). They propose an approach of having one system serve as "the platform for connection, communication and collaboration across all point solutions." Because this system integrates data from across point solutions, it offers potential to provide a single unifying data model.

A hub platform approach is the path I have championed for most of the past 15 years. Up until now, the department's matter management system has been the best candidate as a platform hub integrated with the company's financial payments platform, and the department's document management, intellectual property and litigation hold systems (3). 

The authors include an illustration with the workflow and visualization tool serving as the hub. The workflow tool with visualization as connector is a strong contender for taking the hub role going forward.  Over the next several years, for companies using Microsoft Office I expect PowerAutomate with BI to streamline integrations currently managed by multiple APIs. In legal tech, Onit and Mitratech's TAP embraced this vision early.  

More Work To Do

At least in my experience, the vision laid out in the chapter is in many ways aspirational.  All the same the authors summarize a good attributes list that provides useful navigation. 

Early in the chapter the authors note that collaboration across the law department and their firms and law companies is hampered by each entity's patchwork of technology.  The law department platform hub does not resolve the friction of collaboration and communication with legal service providers, each of whom maintains connections to a number of client systems (4).  

While the hub approach reduces internal complexity, at present there is still the impediment of having to continuously update the APIs between the point solutions and the hub for system updates and new functionality.  The number of points interconnected by the central hub also throws up barriers to switching hub platform providers, similar to the level of effort the authors describe in switching to a suite solution.

Also while a hub can potentially provide a single data model, in the matter management system as hub example, for most of my tenure in legal ops we have had a dashboard on each tool. In my experience single dashboards for multiple tools have tended to bring together several data models into a single useful interface, rather than create a single coherent data model.  

Conclusion

For the foreseeable future, best-in-class point solutions will continue to rule, but a hub approach will bind them.. The Elevate authors paint a convincing picture that the workflow tool with visualization as connector is a strong contender for taking on the hub role going forward with potential significant advantages over the more traditional matter management system as hub model.

End Notes

1 -  Poll results were 50% for best-in-class point solutions, 38% absorbed by enterprise solutions and 12% morphs into all-in-one platforms.

2 -  From Running Legal Like A Business by Connie Brenton and Susan Lambreth, PLI Press, 2021

3 - In  the mid-term I believe contracts management systems, contracts analytics tools leveraging AI, document generation and management systems will merge.  That said, in my experience to date, the contract management system, if any, has been integrated with Salesforce but not with the hub. 

4 - In my experience IP systems have built stronger interfaces for collaboration on matters between inside and outside counsel and inventors.