Level 2 Legal Solutions, which calls itself a legal services company, today announced the formation of new Compliance and Privacy Practice Areas. These practice areas, according to Level 2 Legal, are specifically geared towards corporate counsel and law firm needs.

 

That in and of itself might not necesarily sound like big news, especially since Level 2 Legal has been in this space for a while. But what Level 2 Legal is doing is, in fact, a good lesson in disruption, innovation, and how to compete in today’s changing legal marketplace.

 

Level 2 Legal started about 11 years ago as an eDiscovery service provider. Along the way, it discovered that the knowledge it gained in ediscovery enabled it to develop expertise in other areas. Areas such as helping clients with compliance, privacy, and investigations. These service areas, says Level 2 Legal, have informally grown from 66% to 298% over the past three years. By formerly launching the Practice Areas, Level 2 Legal hopes to make its compliance and data analytics expertise more broadly available to clients. This offering is especially relevant today as new complex legal issues, such as those presented by CCPA and GDPR, are bedeviling corporate counsel.

 

Compliance requires not only determining where documents are but also engagement with individual custodians.

 

As I pointed out in a recent post, one of my former partners was fond of saying always try to become knowledgeable and get control of your client’s documents. It will make you indispensable. By that, he meant you would get such great insights into your client’s problems and business that you will be in a unique position to provide advice. Level2Legal knows this too.

 

Joey Seeber, CEO of Level 2 Legal, sees the new privacy and compliance tools will enable just that. Compliance, according to Seeber, requires not only determining where documents are but also engagement with individual custodians. Just the things my partner and I used to do to get control of the documents in litigation. Just the sort you thing that will ingrain Level 2 Legal in its clients’ business and enable it to provide sound legal and business advice. And by offering compliance and privacy services, Level 2 Legal will do this apart from litigation. If and when litigation occurs, Level 2 Legal will be the trusted advisor the client turns to manage the document ediscovery phase. Seeber says he hopes to use this kind of approach to compete with the Big 4 and, although he didn’t say it, other ALSPs and law firms.

 

But more than that, from providing this kind of value add, its only a small step toward becoming even more ingrained in the client’s business. Since most in house counsel today want legal advisors to understand the business issues, that’s a pretty important goal. Seeber told me recently that his vision is not just to be a discovery provider but to be an advisor to corporate clients. As Seeber puts it in the Level 2 Legal press release, “Our clients turn to us because we understand the big picture. The varied backgrounds of our attorneys – from engineering to behavioral science to philosophy – give us a unique perspective and enhances our legal expertise. The formal creation of compliance and privacy practice areas is another example of Level 2 Legal doing more of what we do best: delighting our clients.”

 

What business are you in?

 

Ted Levitt, the famous Harvard economist, pioneered the concept that businesses should stop defining themselves by what they produce. Instead, they need to reorient themselves toward customer needs. He challenged businesses to ask questions. Questions like what business are you in?

 

Levitt demonstrated the value of this question at the time by pointing to the railroad industry. Railroads did not stop growing because the need for passenger and freight transportation declined. It actually grew. Levitt believed the railroad business shrunk not because the growing demand was filled by others (cars, trucks, airplanes, and even telephones) but because it was not supplied by the railroads themselves. Railroads let others take customers away from them because they assumed themselves to be in the railroad business rather than in the transportation industry. They failed to recognize the diverse needs of their customers. (Levitt is also well known for the observation: “People don’t want a quarter inch drill, they want a quarter inch hole”).

 

In each case, disrupters challenged the existing players because they defined their business in such a way that they could be more flexible and nimble

 

The proof of Levitt’s concept and the relevance of his question is even more evident today. Think of Uber and taxi cab companies. Airbnb and hotel chains. Blackberry and the iPhone. In each case, existing industries were disrupted because they were product-oriented rather than customer orientated. In each case, disrupters challenged the existing players because they defined their business in such a way that they could be more flexible and nimble. By so doing, they were able to meet the diverse, intimate, and specific needs of their customers. The result, railroads were left to the lowest common denominator: hauling massive quantities of goods.

 

That’s the exciting thing about companies like Level 2 Legal. Seeber and his team are customer-oriented. They have asked and looked hard at what business they are in. And they hope to have found a way to supply a need their competitors were not efficiently and effectively providing.

 

Oh, one more thing: they see their competition not as ediscovery providers but as other ALSPs like the Big Four and even more fundamentally, law firms.

 

 

Bob Ambrogi and I have a running dispute. He says I was the first one to ask whether it might be malpractice to not use legal data analytics in today’s litigation world. I say he was the first one to ask that very legitimate question.

 

But it really doesn’t matter who first coined the question. Recent results from the third annual Legal Analytics Survey by LexisNexis suggests if the answer is not already yes, it’s getting darn close to it.

 

Here are some key stats from the Study entitled Bringing Legal Analytics Into Focus:

 

  • 70% of large law firms use legal analytics tools,

 

  • 75% of respondents report an increase in usage at their firm over the last year.

 

  • 73% of respondents at firms with access to the tools report using legal analytics, either directly or indirectly.

 

  • Among users, 90% say the technology makes them better lawyers, and 92% plan to increase use over the next year.

 

Litigation analytics is now mainstream

Pretty impressive numbers. Clearly, among large firms, litigation analytics is now mainstream.

 

And analytics are not just used to gain litigation insights. According to the Survey, over three-quarters of analytics users say “gaining competitive insights'” is very to somewhat important. Other important uses include “pricing projects or legal matters” (68%) and “competitive intelligence for pursuing new business” (67%). What this means is that if you aren’t using analytics, you simply are at a competitive disadvantage especially in the large law firm market.

 

Another vital metric: 81% of users say use of legal analytics is encouraged or looked upon favorably by clients. “The results from this year’s study clearly show we’ve reached a tipping point in the legal analytics adoption curve driven by competitive pressures, the expectations of corporate clients, and the need to control costs,” sys Karl Harris, CEO of Lex Machina, a LexisNexis company.

 

When people say legal is slow to change, they might want to consider the rise of analytics

When people say legal is slow to change, they might want to consider the rise of analytics from its inception barely ten years ago till today. I met up with Harris at this year’s LegalWeek to talk about the Survey and rate of adoption. Harris very much looks and acts the part of a Silicon Vally computer company CEO. (He graduated from Stanford Law School, and received his bachelor and masters computer science degrees from Dartmouth and the University of Texas). Harris believes that development of legal analytics stemmed from a Stanford professor named Mark Lemley wondering the best jurisdiction in which to file a patent case.

 

At the time (2010), says Harris, there was no readily available way to answer the relatively straightforward question. A group of Stanford law students did some research, built a database, and discovered that Florida was the place. (Lemley famously finished his Paper on this research by asking, “Q. Mark, you’ve just completed an exhaustive study of where to file your patent suit. What are you going to do now?” Answer: “I’m going to Disney World.”).

The researchers took the database and decided to expand it to other areas, and from this effort, Lex Machina (Latin for legal machine) was born. According to Harris, they didn’t even know what to call what they were doing until someone suggested the phrase legal analytics.

 

Says Harris: “Since law firms began using legal analytics ten years ago, we’ve seen tremendous growth and adoption, with an increasing number of Am Law 200 firms relying on legal analytics to win in the business and practice of law.”

 

Particularly in the last two years, the growth of analytics has accelerated, and the use cases expanded. This growth is evidenced by an equally expanding competitive landscape. Companies like Thomson Reuters, Bloomberg, and FastCase have also entered the field. In fact, last summer, I reported on a Study done by the American Association of Law Librarians. This Study compared seven programs that are competing in the legal analytics space.

 

Harris believes that this explosion in the use of analytics is fueled by client expectations. It’s also the result of competitive pressures, which he appropriately labels as “the fear of missing out.”

 

And the future promises even greater and more use. The big gap in analytics is the lack of state court data. Since most litigators practice in state court at least part of the time, that a big missing piece.  But Harris and Lex Machina is working on that too. Lex Machina it has embarked on an ambitious and costly project to get the state court data at least from areas where there is lots of litigation. Lex Machina is also working to put all that data in a useable format for practitioners. Of course, once that happens, it won’t just be big firm lawyers that use analytics, it will be most every lawyer.

 

At that point, the answer to the Ambrogi/Embry malpractice question will be obvious.

 

Photo Attribution

Marcus Spiske via Unsplash

 

 

 

I just returned home after four days in New York City for LegalWeek2020. LegalWeek is one of the biggest and most well-known legal tech conferences more info. While there are other conferences, LegalWeek is more eDiscovery and vendor orientated. CLOC, for example, focuses more on substantive issues surrounding legal ops. ABA’s TechShow is designed to get basic information to a broad audience.

 

LegalWeek is geared more toward larger commercial law firms. It’s the tech show for the AmLaw 200. Yes, there is good substantive programming, but  it’s also the opportunity for tech vendors to sell their wares to big law. Plenty of sales meetings, plenty of parties, plenty of marketing speak. It’s appropriate that’s in held in New York where everything is big, expensive and the hustle is always on.

 

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