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Legal Tech in the Age of the Consumer

2013 January 30
by John Wallbillich

On the second day of the powerhouse that is LegalTech, I thought it might be timely to look at two signs of change for technology as it affects the enterprise legal market.

The fact that you have a conference that goes for nearly three full days is a testament to (a) its staying power, and (b) that a lot of people want to go to New York on an expense account.

Many of the prime movers in the legal technology space use the conference as an opportunity to release new products and initiatives (Thomson Reuters is an example). When you peruse the conference agenda and the exhibitors list, you see that it’s really a who’s who of legal technology.

And you also have companies active just outside the exhibit hall, as we know that there’s often more interesting and open conversations there about what’s going on out in the field.

But just as BigLaw is facing challenges from competition, so is BigTech (legal and otherwise). And that’s not just me speculating. There’s a recent interview and an imminent product launch that serve to remind everyone that no company is immune from the forces of change.

First, the interview. It’s here, and features Marc Andreessen, current uber-VC, and founder of Netscape (the first mainstream web browser). Mr. Andreessen gets why consumers are driving the pace of change in technology (hardware and software) and how this is affecting the enterprise. What used to be trickle-down (enterprise to consumer) is now moving the other way, from the consumer “grassroots”:

And the reason is because – the reason fundamentally is because now that you have got these things, you have — now that you have a computer in everybody’s hand, all of a sudden all these barriers — it used to be these barriers to market entry were so big, it used to be there just weren’t that many early adopters in the world. To bring out a new technology for consumers first, you just had a very long road to go down to try to find people who actually would pay money for something.

And now all of a sudden you have got this global market of all these early adopters that have smartphones connected to the Internet, and they can just pick up their things and run with them.

And of course consumers can make buying decisions much more quickly than businesses can, because for the consumer, they either like it or they don’t, whereas businesses have to go through these long and involved processes.

That last part will resonate with anyone trying to sell technology into the legal enterprise (law firms or legal departments). To call the sales cycle long is to make a glacier seem like a racetrack.

The interview is extensive, but it is a rare privilege to peer inside the active mind of a technology first-mover. Mr. Andreessen notes that the fascination with consumer markets over the enterprise is cyclical, and that, today, all business is hard:

There are no easy businesses in the world other than maybe Google, but other than that, there is no easy business anywhere in the world. So what happens is Wall Street gets enamored by the businesses that look like they are easy, until it turns out that they are not, and then Wall Street gets disillusioned and freaked out, and then rotates into the businesses that they think are going to be easy, and then they get endless disappointment. It’s like a seventh or eighth marriage at some point.

At some point the problem isn’t with your seventh wife. At some point the problem is with you.

I think we would all agree that the law business today isn’t easy. (I’ll leave the marriage part to TMZ).

And now a brief look at Exhibit B. To see another example of how business isn’t easy and how consumers play a big hand in it, we need only to look just down the street from LegalTech. To something that’s starting literally as I hit “publish” on this.

Today Research in Motion will announce its new BlackBerry 10 (handsets and operating system). If you show me a lawyer who never used a BlackBerry, I’ll show you someone who still has his first Etch-a-Sketch. In fact, I’d wager that at LegalTech there still are a number of BlackBerry users in attendance, hoping against hope that the new versions (including one with a keyboard!) are good enough to stave off the tractor-beam pull of Apple’s iPhone.

But BlackBerry hasn’t released a new handset in 18 months, which is like a decade in tech:

RIM’s market share has eroded substantially since it last released a new phone in August 2011. Apple and Android accounted for an estimated 87.1% of global smartphone shipments in 2012, up from about 68.1% in 2011, according to research firm IDC. RIM’s share, meanwhile, fell to 4.7% last year from 10.3% in 2011, according to IDC.

[Source]

For the longest time, BlackBerry relied on its dominance in the enterprise market and would dismiss “consumer” products as not fit for corporate use, not secure, and not whatever else they could throw up against the wall.

For the sake of competition, I hope the BlackBerry 10 lives up to the pre-launch hype. One lesson for people involved in legal technology is this: if a powerful company (RIM) and a pervasive product/software combo (BlackBerry) can stumble mightily, then there is hope for all of us who want to compete, and trepidation for those of us facing competition.

[Quick update @ 10:45 am EST: the company's now "Blackberry" so long RIM; and here's the two new handsets]:

bb10-launch

For now, back to the exhibit hall! There are bags and pens and notepads for everyone!!

Westlaw next

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