Predictions 2006: A Challenging Year

January 1, 2006

Irrespective of what vendor press releases and the out-dated industry commentators try to tell us, those with coal-face experience will testify that the legal technology market struggled for innovation in 2005. Although the industry continues to go through the motions of giving awards and formal recognition for innovation and leadership in legal IT, very few firms are achieving recognition from their users for outstanding and useful technology enhancements and/or implementations. 2006 will see leadership wake up to this issue and expect more from their IT leaders.

The coming year will prove just as difficult as 2005, as the bulk of firms concentrate less on new technology and more on making their applications actually work as they were promised when purchased. This challenge will be evident specifically in the areas of business intelligence and document, e-mail, and records management.

There will be very few surprises in 2006 amongst the bulk of firms. This period will see a small number of firms accelerate their leadership and innovation and move away from the mainstream pack. We will see a new focus on business improvement programs that have a technology influence in areas such as Information Management, ERP and CRM. These will focus on adding value to, and complimenting, the lawyers’ working behaviours, and will mirror engagements that are being undertaken today at some of the largest and most profitable New York firms. The adoption of enterprise search technologies such as Recommind as a direct response to addressing the lawyers’ immediate “points of pain” is a useful example.

In relation to the supplier market, we will continue to see global consolidation of vendors and their offerings, with Thomson thoughtfully acquiring complimentary integration opportunities, and Lexis Nexis attempting to keep pace with this strategy. It will not be surprising in 2006 to see a small handful of SAP purchases, which will result in a shift in the traditional vendor rivalries. Thomson Elite will be concentrating more on understanding and promoting their competitive differentiation to SAP, while the other traditional suppliers in this space will find it increasingly difficult to be included in proposal invitations at the top 50 end of the market. Vendor development will be focused more on integration of their document, e-mail, and records management modules. Interesting uses of the Microsoft IBF will be creeping into demonstrations of future product releases from the major vendors.

We will also see efforts in early 2006 to inject new software exhibitions, more vendor sponsored educational events, and new magazine publications into the UK’s legal technology industry. The success of these over their rivals will depend solely on their ability to provide innovative information from new areas, rather than repackaging old messages from the same old messengers.

Justin North is a consultant at Baker Robbins & Company.