In this month’s Tomorrow’s Trends Today, we take a look at what is in store for 2024. We promise this is not going to be just another GenAI hype session. While we are firm believers in the power of AI – in all its forms – and technology in general, do you really need another think piece on AI? We did not think so.
That said, we do not want to be left out:
AI, ML, LLMs, AND GEN AI WILL BE HUGE!
Hopefully, that satisfies the search engines. I am looking at you Google.
The Economy Will Increase Cost Pressures
Looking at the business side, we start with an unfortunate truism in our industry: eDiscovery is like root canal – clients want it cheap, fast, and as painless as possible. No GC ever went to the CEO and said, “good news, we have to increase our eDiscovery spend 20%.” Of course, for eDiscovery professionals, the table stakes for eDiscovery teams continues to be deliver accurate results under these cost and time pressures.
With this as the normal state of affairs, who is betting that the economy will get any better in 2024? Clients will be under more pressure than ever to control costs. Further, clients have become much savvier and will be less tolerant of costs that are not tied to demonstrable value. Storing data is not “value add.” While there is a belief that AI and ML bring value, the process can be opaque and expensive. Providers – law firms and LSPs – should be ready for more uncomfortable conversations.
Economic pressure always stresses the system to some degree. In 2024, we see the industry changing or accelerating change in three ways.
- OGC will continue to look for ways to increase their strategic value.
- There will be stricter attention paid to KPIs in litigation and legal operations.
- Large clients will scrutinize cloud storage and look to “unbundle.”
The OGC Will Accelerate Their Strategic Value
This is where technology plays a large role. With a host of powerful technology tools available, 2024 promises to be an opportunity for legal departments to elevate their strategic value to the organization. We see more creativity and desire in the OGC to apply their expertise to a broader set of corporate challenges. While the majority of eDiscovery platform users focus on litigation, many are using custom workflows of that very same software to expand the uses cases, including:
- M&A and strategic partnership due diligence.
- IP analysis, including proactive and retroactive cases.
- HR management, including investigations into code of conduct compliance.
- Specialized contract review, such as during union negotiations or proceedings.
- Information security and breach management.
- ROT (redundant/obsolete/trivial) analysis of data.
As clients broaden the use of eDiscovery software that they already deploy, this offers a new avenue for law firms and LSPs to provide specialized services to support these activities.
KPIs in Litigation and Legal Operations
Key performance indicators (KPIs) are not new to lawyers, but they are rarely used beyond static metrics, such as new case volume, cost per case, and legal spend margin. These are point in time measurements to compare versus a prior period or against a standard. In 2024, we will see more dynamic KPIs as well as a large shift in performance expectations due to technology expectations.
We expect to start to see individualized attorney metrics, such as the legal equivalent of the “value above replacement” statistic in sports. Clients will become very particular about which attorney or team is on which matter seeking the best “line-up” in all cases. The winners among law firms and LSPs will be the ones who a) aggressively implement technology workflows that maximize efficiency and b) ensure all attorneys and staff are trained and fully engaged in the use of that technology.
While we see this happening more for routine work than “bet the company” litigation, we would suggest that routine work is still the bread and butter of providers and likely impact this work. Additionally, once clients become comfortable with these new metrics, they will start to apply them to larger, more important matters as well. Firms and LSPs will need to understand and start measuring themselves accordingly.
The Great Unbundling
How many of us like paying for cable or streaming channels we do not use? If you search “cut the cord,” you will see over 1B results for how to get rid of cable services you do not want. Similarly, Azure and AWS are not just storage, but contain the technology components and services bundled in to support the software built in the Azure or AWS environment. The actual profile of the components – and, consequently, the underlying cost – are choices the owner of the cloud instances makes. Not you.
Much like cable TV bundle, clients will rethink external cloud or hybrid instead of “paying” for components that they do not use. Known as “Cloud Repatriation,” there are several trends driving the movement back behind the firewall, but cost is the big one. In the case the client has their own data lake, they are effectively paying double – once for the data that resides in their data lake and second for the data that gets transferred to the provider’s data storage. With data volumes continuing to explode, this is an obvious target for reducing costs.
Clients and providers might dodge this bullet with on-prem software, but it would be prudent for those using cloud-based eDiscovery software for clients to think through possible solutions. traditional solution has been to provide different pricing for “nearline” or “offline” data storage, but that may not be cost effective if the providers cannot get unbundled, straight storage pricing from their cloud provider. Another option would be to provide integrated, but segregated, storage capability independent of Azure or AWS bundled services, but holding client data in multiple places complicates process, management, and security. Whatever the direction, we trust the industry will find a reasonable accommodation.
Disruption Offers New Opportunity
While facing technology adoption choices and challenges, for in-house legal and litigation teams the advent of new technology and eDiscovery software can make life better. Teams taking full advantage of AI will see “better, faster, cheaper” results as AI improves efficiency and productivity. Insights will start to be used with the OGC and legal ops to be more proactive in high value/high risk areas to identify and resolve issues in areas beyond litigation, such as M&A, employee safety, union negotiations, breach, and others.
We see the opportunity for in-house and outside counsel to provide expertise beyond the narrow scope of legal advice and become a better business and strategy partner to the CEO and C-suite. This will require attorneys and legal staff to acquire additional business skills, but such skills are a logical part of their career development.
Finally, we are ending 2023 with large disruption in the eDiscovery provider industry. Consolidations, mergers, federal investigations, and more are complicating an already demanding professional environment. We see clients, law firms, and LSPs using this as an opportunity to reexamine relationships and approaches – the sort of reexamination they have talked about for years but pushed off. The result will be a stronger industry in the long term.
FINAL NOTE: We read and hear concerns about GenAI and other technology replacing humans. We do not see direct replacement coming any time soon. What we do see is law firms and LSPs losing business because they are slower than their competition in adopting AGI and training staff to effectively use the technology. This will place a premium on attorneys, legal professionals, and staff who are quick to adopt and master new technology and processes.
About the Author
Steve Henn
Steve Henn is the Managing Director of Legal Solutions at Venio Systems.