LEGALTECH NY 2011: optimism, war crimes + e-discovery, IBM, on-line e-discovery education, predictive coding … and “real” information management

Reported by Gregory P. Bufithis, Esq. and Eric Fell, Esq.

18 February 2011 — It’s been two weeks since LegalTech New York and it’s taken that long to digest most of the information we collected. We stayed an extra week after LegalTech for follow-up with interviews and product demonstrations.

As always, LegalTech can cause info-saturation (see, for instance, the reports from Gabe Acevedo and Donna Seyle on the show) so unless you have a game plan it can overwhelm you.

For new readers: LegalTech New York is the largest legal technology conference/trade show in the U.S. It’s an excellent opportunity to get hands-on practical information in all legal technology areas with 600+ vendor exhibitions and 50+ substantive programs. It really does have the most extensive gathering of vendors/products for just about every legal technology need.

It was an interesting LegalTech this year and though I spent little time at the actual event but at meetings and presentations around and outside the venue, I came away with a few observations/themes/ideas … plus one big “new new thing” – real information management (more below).

I had the chance to wear a few hats: covering the technology side as the CEO of The Posse List, meeting with our European clients as CEO of Project Counsel, and launching our new venture Project Counsel Media. And it all came together. As Goethe said “At the moment of commitment, the universe conspires to assist you”.

We had a 6-person team at the event this year. The team covered about 15 of the substantive presentations/sessions offered amongst the various educational tracks, and they conducted 40+ video interviews with vendors and participants. Those videos have started to roll out on our YouTube site and will continue to roll out the next few weeks (editing has been a task). We will also have a long post early next week on the substantive educational sessions we covered with a synopsis and links to the materials presented.

The high-point for us was our 30-minute video interview with the keynote speaker Gonzalo de Cesare (political advisor with the European Union Police Mission in Bosnia & Herzegovina) whose keynote was entitled “United Nations War Crimes Investigations – Information Management in High-Volume Legal Proceedings.” He discussed the UN’s process for managing some of the largest and most complex cases in the world with information management and e-discovery management software (all provided by industry goliath ZyLAB) for the Khmer Rouge trials, the criminal tribunals for Rwanda, and the trial involving Slobadan Milošević and the former Yugoslavia.

We conducted the interview in Mr de Cesare’s native language of Spanish and we are in the process of preparing subtitled versions with downloadable transcripts in 14 languages for presentation to the United Nations. All versions will be available on the ZyLAB website as well as our YouTube Channel and the new Project Counsel Media website. For the ZyLAB press release on Mr de Cesare click here.

So, some observations/ideas/themes from LegalTech New York 2011 as gleaned from my staff and my own activity:

1. Optimism and maturation. I got a rather “warm & fuzzy” feeling this year in that I sensed more optimism about the financial strength of the e-discovery market. Presentation events and demo-rooms were almost all pre-booked before LegalTech even started, vendors scrambling to set-up additional sessions as the event commenced. Deals were being made left-and-right (I had the privilege of watching two transactions as an undisclosed observer). As Ari Kaplan has pointed out this “measured optimism” and maturation of the market was reflected by less flashy presentations, more case studies of “what-we-have-done-for-our-clients”, how vendors are executing on innovation, etc. For my video chat with Ari please click here.  .

2. Vendor partnerships and industry consolidation. There were lots of partnerships and tie-ups announced and cross-marketing ventures, too numerous to mention. These allow a vendor to in effect “leverage the power of its partner” (a phrase I stole from Ari Kaplan, by the way). For a list of those announcements (and as an overall great source on staying current on the overall legal technology market) I recommend following the folks at Inside Legal.

And for detailed “all-things-technology” in both the specific product sphere as well as market analysis I suggest a subscription to The 451 Group.

Also, a new resource on e-discovery providers: the Socha-Gelbmann team have announced the launch of a new online service called Apersee which was created in response to the many requests they have received for a better way to search for and select e-discovery providers and products, and built on the foundation established by their Socha-Gelbmann Electronic Discovery Survey. We have reviewed the Beta site and it’s a rather interesting tool to independently evaluate which providers and products potentially match your particular needs. To access the site click here and more background information click here.

These partnerships and tie-ups often precede an eventual merger and acquisition. This comes as no surprise because it follows what is happening in other industries. For instance both Coke and its rival PepsiCo completed their respective analysis of the beverage markets and bought their North American bottlers last year along with other distributors (and brands) as a way to improve performance by cutting costs, speeding innovation, and give themselves more control over distribution. All of those elements apply to the legal technology industry as well.

3. An alignment of in-house counsel and their outside counsel with respect to e-discovery. Over the last year we have seen corporations making a serious move toward managing e-discovery and treating it as a core business practice. This is a sea change, but it something we have seen developing very quickly across Europe (for our recent analysis click here). Many at LegalTech told us they still need a major “trigger event” (litigation, regulatory review or investigation) to get the process rolling and force their in-house law departments to focus. But what was “new” or at least more evident at LegalTech this year was a greater presence of law firm litigation support managers escorting their corporate clients through vendor exhibits and presentations (as well as substantive sessions) with the focus on how in-house law departments can go through the process of deciding whether/how to build an in-house e-discovery facility.

As we discussed with a number of in-house counsel, it is a cost analysis. Where is the company spending most of its e-discovery budget (if it has one) now? Are those portions of the workflow good candidates to bring in-house?

Note: typically, processing data and review are the most expensive phases of any e-discovery project. We have found that Project Counsel’s corporate clients have determined processing, analysis, and first-pass review are the best candidates to be brought in-house from an ROI perspective.  

4. Vendors and the art of differentiation. With 6 billion e-discovery vendors (only a slight exaggeration) the continuing challenge is still “how-do-we-differentiate-ourselves-from-the-pack?” and it is difficult for the client, the customer to make the evaluation. Just stagger through 2 floors (about 8 ballrooms) at LegalTech of vendors and try to find one who didn’t offer data-collection-data-processing-early-case-assessment-subjective-review-production … and phenomenal cost savings. And it’s not easy when everybody uses the same buzz words: cull-image-duplicate-document-early-case-assessment-production, etc.  

Today the marketing buzz word is “speed” with vendors regularly throwing around impressive-sounding numbers about the speeds at which their software tools can index and search data, though these numbers often lack context. In practice, e-discovery processing depends on a number of factors, such as the computing platforms data resides on, the types of media it is stored on, and the types of attachments and associated information included in a data set.

In 2005, George Socha and Tom Gelbmann launched the Electronic Discovery Reference Model to address a lack of standards in e-discovery. By creating a common model and framework for discovery the goal was to make the process more predictable. In 2006, they launched the EDRM Metrics project to provide a standard approach and a generally accepted language for measuring the full range of electronic discovery activities. The project includes a data set that vendors can use to test their systems.

All of this led to their launch of Aspersee. My suggestion is your starting point should be the links in paragraph #2 above: use The 451 Group and Aspersee to understand/compare vendors and products.

5. And just a view words about early case assessment. Early case assessment: a favorite concept/phrase in the e-discovery world. Simply put, it’s used to refer to estimating the risk (cost of time and money and probability) to prosecute or defend a legal case by assessing a case through an initial review of documents. It’s not new. Every trial attorney has done it. Nowadays, however, the document review is much more complicated, considering the volume of documents has exploded a million-fold. Global organizations deal with legal discovery and disclosure requests for electronically stored information “ESI” and paper documents on a regular basis.

But the phrase has become overused, warped and misused. For a nice, succinct “state-of-the-art” we turned to Morgan Sheehy, CEO of Nuix.

For a link to the early case assessment article to which we referred in the video click here.

And for a link to the recent IDC update on the entire early case assessment market click here:

6. Predictive coding and automated document review. The concept is simple: systems, methods, and computer program products for improved electronic discovery. They are geared for the predictive and automated coding of identical or highly similar documents for the purpose of limiting the volume of documents requiring review and thereby increasing the overall efficiency of the document review process. And it is growing in importance in the e-discovery market. For details we went to Craig Carpenter, Chief Technology Officer for Recommind:

7. On-line e-discovery education. There has been a surge in the recognition of the need for proper e-discovery training. And the answer has been online training in e-discovery law, training that harnesses the new capacities of technology and the Internet, yet still preserves the best interactive elements of the traditional legal apprenticeship tradition. This kind of online training can fast-track the knowledge base and skills of a few technology-minded lawyers in every law firm. It is no substitute for traditional in-firm apprenticeships for the few firms that have the requisite knowledge base. But it can help. Attorneys who spend the time and effort to be trained online can then more quickly acquire the full skills required for competence.

Two of the biggest proponents of the need for a change in e-discovery training are Ralph Losey and Jason R. Baron. We had time for an informal chat with both of them:

And for a link to Ralph’s program click here.

Very shortly The Posse List will be rolling out a special offer (for our promo click here) to its members for Ralph’s program, and Project Counsel will be doing the same for its European membership base.

To join the U.S. list send an email to list.subscription@theposselist.com and we’ll subscribe you.

To join the European list send an email to membership@projectcounsel.com and we’ll subscribe you.

8. Cloud computing and e-discovery.

It was a fairly large part of the program at LegalTech, and much discussed at the sessions. In our post next week that covers the substantive educational sessions we’ll provide some links.

But for a good summary of what cloud computing and e-discovery is all about here’s my chat with Steve D’Alencon of CaseCentral:

Also interesting was my chat with some of the International Data Corporation folks I met during the show and their recent report on the over all cloud computing market. The steady rise in popularity of cloud computing means the technology is about to reach a tipping point as more businesses realize the huge benefits it has to offer. Many IT customers are expecting to manage a varied host of cloud computing technologies in the near future. And, it appears that this flexibility, which allows businesses to mix a variety of private, public and hybrid cloud computing solutions, is only adding to the technologies popularity. IDC believes that over the course of the next few years, the worldwide cloud systems management software market is set to undergo massive growth. The firm believes that by 2015 the industry will be worth $2.5 billion.

The rapid growth will be down to the increased need for automation and integrated system management solutions that can optimize the performance of relatively disparate technologies. At the moment, debate over whether to use public or private cloud computing technologies is a major oversimplification of the situation. According to IDC, firms are not willing to part company with legacy equipment until they have seen a concrete return on investment. Therefore, cloud systems management software will be required to make increasingly complex infrastructure manageable – hence the expected growth in the marketplace.

Interestingly, according to IDC, last year 70 per cent of the world’s cloud computing management software was deployed on private infrastructure. This figure is likely to change, however, when major issues – such as privacy and security – are dealt with by public clouding computing providers. And that still remains the biggest issue: the major concern for businesses deploying cloud computing technologies is security. IDC says that data leakage and outright theft weighs heavy on many chief information officers minds and, as a result, many companies are attempting to plan ahead when it comes to security solutions for cloud computing.

We’ll go into this area in more depth next week when we discuss the substantive programs at LegalTech.

9. Those fabulous folks from IBM, technology … and my big take-away this year: what “real” information governance is all about. Technology. It never ceases to amaze. Just look at this week’s over story in The Economist on the manufacturing technology that can “print” a Stradivarius … and it plays beautifully.

Much attention was focused this week on IBM’s Deep Blue computer defeat of the “humanoids” on Jeopardy! (see story by clicking here). But my experience with IBM goes well beyond that. In December I attended the IQPC e-discovery conference in Munich. Going on at the same time was a software developer mini-conferences on semantic technology, virtualization, media, etc. with Google, IBM, Microsoft, Thomson Reuters and others in attendance. I was able to skip out of IQPC for a bit and attend a few sessions and grab a dinner with some folks (my CTO is an ex-Google employee and gets these invitations all the time; always best to tag along).

Search technology in the e-discovery/litigation game is a bit different than the search/semantic technology field I follow and am involved with in the web and media world and which I recently covered at LeWeb. The e-discovery folks are somewhat wrapped up right now in artificial intelligence, predictive coding, non-linear vis-à-vis linear approach to the review of document databases, etc.

What these folks are doing with search is an eye-opener. Of course with $8 billion R&D budgets, why not. Themes/discussion: semantic search, metadata, semantic web, ontology, BI 2.0 (which has been retagged “advanced analytics” of late), etc., etc. Just a sample of something I saw: IBM has this analytics that identifies the “alpha” individual in its customers’ calling circles — those people who’d be most likely to take other customers with them should they switch carriers — so that it can cater to those individuals. They also have text analytics they apply to all forms of social media to “detect sentiment” (not just chase keywords) in order to gauge customers’ reactions to brand advertising and then adjust marketing channels and messaging accordingly. It’s industry-specific — healthcare, insurance, telecom, consumer goods, etc. – and they are in the process of applying it to the litigation world.

The IBM analytics are quite amazing. The various programs can integrate gigabytes, terabytes, or petabytes of unstructured data from web-based repositories, collect a wide range of unstructured web data stemming from user-defined seed URLs and extracts/enrich that data using unstructured information management architecture. While its purpose is to leverage unstructured data strategies/support decisions (business intelligence) its application to text analytics for litigation is a step away.

But these “advanced analytics” are not lost on several e-discovery involved vendors and companies we met with at LegalTech. Today’s e-discovery is more focused on the regulatory and investigative side of a business, less the litigation side, where managing e-discovery and information must be part of the core business practice. This is a sea change, but it something we have seen developing very quickly with all of our corporate clients. And some of the forward thinking vendors understand this. ZyLAB certainly “gets it”, as does Recommind, and Ernst & Young and Nuix and CaseCentral. But the one to watch is FusionLegal who made numerous presentations at the show.

The mantra — very simply put — is this: investigations are a unique business process where a company puts unstructured corporate data through a comprehensive analysis and classification process, adding a wealth of “contextual” metadata to documents. These can be leveraged for initiatives outside of the individual immediate case but rarely ever are. This is not a “one-off” situation. Corporations rarely take time to see it is part of a matrix. A corporation needs to couple the investigation process with advanced data analytics to create a new quantum of analysis to help make informed decisions about the future and thereby drive performance and lessen risk. They can learn from the past. The technology to do so is out there. A corporation will finally be able to exhaust the potential of that technology and the discovery/investigation process to deliver a real ROI, especially companies that exist in highly litigious and highly regulated industries. It is more than just cutting costs. It is taking that past, all that “contextual” metadata and improving performance.

I will have more after my meetings with FusionLegal and other vendors in London in the coming weeks.

I’ll end with my informal chat with Mary Mack and Johannes Scholtes of ZyLAB who do a nice job of putting together all the main elements of world-wide e-discovery and who, as mentioned above, provided Gonzalo de Cesare the information management and e-discovery management software he used for his war crimes trials.

For more information or questions about The Posse List  contact us at manager@theposselist.com