New Rivalries Emerge as Law Firms Race to Innovate
Reactions to a new EU regulation show one way firms are increasingly competing not only with each other, but also with alternative legal service providers.
November 10, 2017 at 02:30 PM
5 minute read
Like this column? Email [email protected] to sign up for a new Law.com email newsletter, “The Law Firm Disrupted.” Written once a week by reporter Roy Strom, the newsletter keeps you in the know about the changing market for legal services.
New regulation is often said to stifle business. The opposite is happening for legal service providers in response to a new European Union data privacy law set to kick in next year.
The General Data Protection Regulation changes how companies that do business in Europe can share and store personal data. It is also providing a glimpse into what a legal services market looks like when alternative providers compete head-on with law firms. Both are harnessing technology to help clients stay away from the teeth of the data privacy regulation: A fine that can be as large as 4 percent of a company's annual revenue.
Orrick, Herrington & Sutcliffe launched a complementary online interview tool powered by HotDocs that lets companies “stress test” their readiness for the law. DLA Piper made an app that allows users to download the text of the law onto a phone. Hogan Lovells' app asks seven questions of its users to determine a basic understanding of their readiness for GDPR. (Of the three, Orrick's is the most advanced.)
Meanwhile, alternative legal services provider Axiom Law has developed what it hopes will be a more end-to-end product. Axiom's solution uses artificial intelligence to review contracts; provides a staff of human lawyers to negotiate new provisions; and guides their work using a GDPR-specific workflow management system. Consilio, the e-discovery and document review provider, wants clients to know it has tailored its document review technology product for the GDPR.
These kinds of nontraditional, client-facing products are still relatively rare among law firms. Much easier to find are more typical solutions such as brochures explaining what the law is and practical handbooks to help companies ensure they're compliant.
There are at least two good reasons for legal service providers and law firms to invest in technology in response to the GDPR. One is the scale of the regulation. It affects nearly any company that holds personal customer data on European customers, which in today's economy is basically all of them. Axiom says companies in the Fortune 500 and FTSE 100 alone will spend more than $1 billion on contract analysis to comply with the law.
The other reason speaks to why the GDPR may be a sign of where the legal services market is headed. The type of legal work required to adjust to the GDPR can be assisted by a technology that has recently made large strides in efficiency and quality: automated contract review.
Mathew Lewis, co-head of Axiom's global banking and regulatory practice, expects his technology will analyze “tens of thousands if not hundreds of thousands” of contracts for GDPR clients. He says the technology has been trained to identify data privacy-specific terms and can trim down the number of contracts lawyers need to spend time changing. In that way, it's a cost-saving tool.
“GDPR is unique in that it is really broad in a way a lot of regulation has not been,” Lewis said. “But it's also that the tools have gotten better over the last 12 to 18 months.”
At Orrick, the online interview tool has been used more than 60 times since its September launch, said Kolvin Stone, co-chair of the firm's cybersecurity and data privacy team. Including a manual version of the interview process, Orrick has had discussions with more than 250 clients, Kolvin said. The interview template, which is dynamic and produces a custom report for users, took six months to develop.
The broad swath of companies affected by the law has also led to the tool being used across multiple practice groups. More than 55 of the firm's lawyers have been engaged with the tool, across 16 offices and from 12 practice groups.
The success of the product is growing interest at the firm to invest in other technology solutions in the coming months, Stone said, with the firm considering hiring developers to help with that push.
“You're pulling intellectual capital and putting it into technology for a number of people to use,” Stone said. “That's a model I think we're going to follow going forward. It lends itself very well to GDPR, but within Orrick we're looking at ways to develop that across other areas.”
The Orrick story is an example of how firm management can help bring about change by investing in successful technology-based legal products. It is also why firms should cater to forward-thinking partners and let them invest time upfront in building these products. Once the tool is built, skeptical partners can be swayed by the tool's benefits as a business development tool.
Stone said more than 50 partners have sent the interview tool to clients. After a partner sent it to a venture capital firm, the client forwarded it to a number of its portfolio companies. That led this week to Stone crafting a proposal to do GDPR work for those firms.
“It has led to many engagements that we otherwise wouldn't have,” Stone said.
That should be convincing enough.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllLaw Firm Innovation: How BakerHostetler Launched FinClar, a Lawyer-Built FinTech Tool
8 minute readNew York Times Sues Microsoft, OpenAI Over Alleged Use of Copyrighted Content to Train ChatGPT
Trending Stories
- 1The Law Firm Disrupted: Playing the Talent Game to Win
- 2GlaxoSmithKline Settles Most Zantac Lawsuits for $2.2B
- 3Preparing Your Law Firm for 2025: Smart Ways to Embrace AI & Other Technologies
- 4BD Settles Thousands of Bard Hernia Mesh Lawsuits
- 5Partner Cuts: The Grim Reality of Post-Merger Integration
Who Got The Work
Eleanor M. Lackman of Mitchell Silberberg & Knupp has entered an appearance for Canon, the Japanese camera maker, and the Brooklyn Nets in a pending trademark infringement lawsuit. The case, filed Sept. 16 in California Central District Court by T-Rex Law on behalf of technology company Phinge Corporation, pursues claims against the defendants for their ongoing use of the 'Netaverse' mark. The suit contends that the defendants' use of the mark in connection with a virtual reality platform will likely create consumer confusion. The case, assigned to U.S. District Judge Consuelo B. Marshall, is 2:24-cv-07917, Phinge Corporation v. Yankees Entertainment and Sports Network, LLC et al.
Who Got The Work
Fox Rothschild partner Glenn S. Grindlinger has entered an appearance for Garage Management Company in a pending lawsuit over alleged wage-and-hour violations. The case was filed Aug. 31 in New York Southern District Court by the Abdul Hassan Law Group on behalf of a manual worker who contends that he was not properly compensated for overtime hours worked. The case, assigned to U.S. District Judge Analisa Torres, is 1:24-cv-06610, Bailey v. Garage Management Company LLC.
Who Got The Work
Veronica M. Keithley of Stoel Rives has entered an appearance for Husky Terminal and Stevedoring LLC in a pending environmental lawsuit. The suit, filed Aug. 12 in Washington Western District Court by Kampmeier & Knutsen on behalf of Communities for a Healthy Bay, seeks to declare that the defendant has violated the Clean Water Act by releasing stormwater discharges on Puget Sound and Commencement Bay. The case, assigned to U.S. District Judge Benjamin H. Settle, is 3:24-cv-05662, Communities for a Healthy Bay v. Husky Terminal and Stevedoring LLC.
Who Got The Work
Caroline Pignatelli of Cooley has entered an appearance for Cooley, partner Matt Hallinan, retired partner Michael Tu and a pair of Cooley associates in a pending fraud lawsuit related to the firm's representation of startup company Carbon IQ and founder Benjamin Cantey. The case, filed Sept. 26 in New Jersey District Court by the DalCortivo Law Offices on behalf of Gould Ventures and member Jason Gould, contends that the defendants deliberately or recklessly concealed critical information from the plaintiffs regarding fraud allegations against Cantey. Gould claims that he would not have accepted a position on Carbon IQ's board of directors or made a 2022 investment in the company if the fraud allegations had been disclosed. The case, assigned to U.S. District Judge Robert Kirsch, is 3:24-cv-09485, Gould Ventures, LLC et al v. Cooley, LLP et al.
Who Got The Work
Attorneys from Skadden, Arps, Slate, Meagher & Flom have stepped in to represent PDD Holdings, the operator of online marketplaces Pinduoduo and Temu, in a pending securities class action. The case, filed Sept. 30 in New York Eastern District Court by Labaton Keller Sucharow and VanOverbeke, Michaud & Timmony, contends that the defendants concealed information that rendered the growth of PDD unsustainable and posed substantial risks to PDD’s business, including merchant policies that made it unprofitable for vendors to do business on PDD platforms; malware issues on PDD applications; and PDD’s failure to implement effective compliance systems. The case, assigned to U.S. District Judge Pamela K. Chen, is 1:24-cv-06881, Macomb County Retiree Health Care Fund v. Pdd Holdings Inc. et al.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250