Legal software as a service has been around since the early 1990s: Law Firms are finally starting to embrace it.
- On June 29, 2017
Back in 1993, Irving Rappaport and his business partner, Kevin Rivette founded Smart Patents. The company was one of the early legal software firms. Smart Patents’ goal was to create a “Digital Patent” and transition patent attorneys from working on paper to working on an electronic format. According to Irving Rappaport, co-founder and managing director of IP Checkups, Inc., “Smart Patents was the first software that enabled attorneys to search the text and images of a patent on the same screen, annotate the documents, and share the information with colleagues.”
In 1998, Smart Patents changed its name to Aurigin Systems and added patent analytics capabilities to its offering including citation trees, business reports, and patent landscape maps. Aureka, as the tool was called, offered patent practitioners an electronic workbench for analyzing patents in the context of the competitive landscape. An early intellectual asset management software platform, Aureka provided technical, legal and business insights to help align a company’s intellectual property strategy with its R&D and business objectives. Ultimately the solution was developed to empower lawyers by arming them with valuable competitive intelligence information stemming from patents – key property rights that underlie an enterprise’s technology.
Law firms were the initial target market for Smart Patents. The Smart Patents software would make the law firm’s internal patent review process more efficient while the Aureka software would support external clients by staying on top of competitors’ patent filing and product development activity. But in the late 1990’s these new software solutions appeared risky to outside counsel, who were still mostly working in a paper paradigm and they were hesitant to embrace tools that potentially made them more efficient, particularly in light of hourly billing.
In 2002, Aurigin Systems was acquired by Information Holdings, Inc. and eventually ended up in the hands of Thomson Reuters. The Aureka software became the core foundation of Thomson Innovation (now Clarivate Analytics) and was primarily marketed and sold to in-house IP counsel who were more apt to embrace efficient legal software solutions that enabled them to increase productivity and wield more power within the corporate hierarchy.
In the early 1990’s, legal software solutions for improving attorney work-flow and conducting patent landscape analysis were cutting-edge ideas. Over the past 25 years, law firms have started to implement legal software solutions to improve internal work flows. Now, there are literally 100’s of software products available that are primarily developed by startups and other long-time legal software providers such as LexisNexis, Thomson Reuters, Wolters Kluwer and others.
Recently, law firms have begun to embrace legal software solutions for external use, i.e. client -focused software to improve client work-flows and in-house counsel efficiencies. Back in the Smart Patents and Aurigin Systems days, Rappaport was convinced that if outside counsel embraced patent landscape analysis software or other client-facing software such as for knowledge management or email management, law firms could provide additional value to their clients and differentiate over other firms.
For example, if outside counsel monitored competitive patent activity, an attorney could alert their client when important competitor patents published that provided insight into the direction that the client’s competitors were headed. Then, outside counsel could make recommendations regarding additional continuation applications with new claim sets that could be filed or even recommend new invention filings. The thinking went that legal software would make law firms more efficient, however the increased intelligence would also make them much more valuable to their clients.
Because the law firms didn’t embrace client-facing legal software, in the early 2000’s niche firms such as IP Checkups, founded in 2004, were created to provide patent landscape analysis services and software for categorizing, annotating, and monitoring competitive patent information.
Law firms generally have been slow to embrace client focused legal software solutions, until now.
Within the last 6 months two large law firms have introduced legal tech spin-offs to incubate and invest in legal tech software.
Most recently, Dentons introduced NextLaw Labs to “transform the practice of law”, “drive innovation in legal services and bring clients what they want with better quality, more responsiveness and greater value.”
And, in February of 2017, Bryan Cave introduced TechX, a technology and innovation incubator to promote innovation and “lead the way in revolutionizing the practice of law, and creat[ing] efficiencies for clients along the way.”
These announcements don’t come as a huge surprise. Law firms are under pressure for a variety of reasons to distinguish themselves from the competition. These include growing headcount, new pricing strategies and the increasing availability of client facing legal software solutions such as Kira Systems– for machine learning, ThreadKM– for email management, and IP Checkups’ own PatentCAM – for categorizing, archiving and monitoring patents. It was simply a matter of time before at least a couple of law firms led the charge in creating, incubating, and offering innovative, legal software as a service solutions to their clients.
It remains to be seen if these moves will be successful for Bryan Cave and Dentons and whether (or when) other law firms will begin to invest in and incubate legal tech software.
Matthew Rappaport is the President of IP Checkups, a patent analytics and software firm located in Berkeley, California. IP Checkups offers PatentCAM™, easy-to-use, web-based software to organize, annotate, and manage competitive patent information. Call (510)225-1162 or email firstname.lastname@example.org to set up a web demo of the PatentCAM software.