Legal research used to be simply understood as finding the statutes, regulations, court orders, court decisions, and more to construct and support an argument. Founded in the 1970s, LexisNexis has dominated that market. And don't expect any disruptions any time soon.
To begin with, the barriers to entry are high. Yes, there are upstarts such as Judicata. But, as Hugh Logue of Outsell Inc. tells THE RECORDER, "success requires substantial investment, experience, and years of development." Here is that article. The LexisNexis infrastructure is huge and complex.
In addition, unlike the start-ups, LexisNexis can offer and guarantee comprehensive coverage of all sources. Law firms and in-house counsel need that assurance. When the stakes are high as in law and malpractice lawsuits are possible, established brandnames have clout.
Third, the profession of law tends to be conservative. To change vendors involves risk as well as the expense of training and getting up to speed. Few partners are eager to learn a new system, including its strengths and weaknesses.
And, fourth, LexisNexis hones its tools to, as its website explains, "put relevant and trusted information in context to determine the most effective strategy and achieve better outcomes." That is, it functions as a problem-solver, not just a reference. For example, it can retrieve and aggregate cases, approaches, and judgments, providing users with the ability to formulate positions and see the probability of various scenarios.
Another market emerging in legal research goes way beyond this kind of help in problem solving. It exists to do novel things. It does that by processing huge amounts of data, which is automatically analyzed, to frame whatever in whole new ways.
A classic example, points out the American Bar Association (ABA), is the client which aggregates the data from the 10 law firms it uses. Then it analyzes that in terms of comparative billing. What percentage of the work at Firm A is done by partners versus the percentage at Firm B. What was the expense per each million dollars for settlement for Firm A versus Firm B. This could level the playing field between BigLaw and all the rest. The client might realize that the boutique firm in central Pennsylvania produces better outcomes more cost effiiciently than does a brandname large firm in Los Angeles. Here is that article by the ABA.
On the other hand, inside the law firm, data analytics can be used as a more objective approach to determine expenses for the case and therefore estimating the fee for the client. In providing this estimate, the law firm can present all the analytics.
In actual practice, lawyers are already leveraging data analytic software for processing and interpreting in e-discovery. This is the era of emails, tweets, blog posts, e-commenting, PDFs, and memoes. The predictive coding in use is creating order out of chaos.
In addition, data analytics could generate better picks for who should be selected for the jury by the defense or the plaintiff.
Players in traditional legal research like LexisNexis may or may not come to also dominate this newer market. What those leaders have going for them include their infrastructure, ability to fund experiments, and sales force. As we witnessed in the Greek yogurt niche market, an established player can outspend the upstart which created demand. Danone ate Chobani's lunch. Here is the BLOOMBERG BUSINESS WEEK coverage of that.
As for law firms and lawyers, those coming to understand unique ways data analytics can be leveraged will have the edge.