No, there are not “too many” NewLaw companies. But there are undoubtedly a lot. This map of the market, courtesy of Catalyst, is three years old and you know the ecosystem has only gotten bigger since then:
We are in the Cambrian Explosion of NewLaw and if you can’t revel in at least appreciate the exuberant, almost tropical, growth of law companies–which we think the Covid “Slingshot” will accelerate–then you’re not paying attention. E-discovery, contract management, predictive search, project management, client intake, time-keeping, e-billing, client dashboards, lawyer dashboards, alternative pricing model insights, logic/decision-tree maps, machine learning and AI, and on and on.
As Adam Smith foresaw, if building a pin factory beats hand-crafting pins one by one by hand, someone will take a shot at a factory. And may the best factory win.
So yes. There are a lot of NewLaw companies at the moment, and surely many more to come. This poses the question, How do you know you’re hiring best of breed or at least really-good-of-breed?
Until now, the answer has usually been a combination of reputation/prestige, word of mouth, client testimonials, and ultimately just plain picking one as you run out of patience with the cost of search. (Kind of sounds like the way many clients hire law firms, so maybe we’re all comfortable with this; but it could hardly be less scientific or even, may we suggest, “random?”)
Ultimately, a number will fail but those left standing will have broken the code on providing enduring value in the marketplace. We’ll have mercy and not press this analogy any further, but four legs for mobility on land was a blockbuster idea while seven eyes and a mouth on a stalk–Opabinia–was ingenious as all get-out, but to no avail.
Now someone is taking a crack at sorting through the profusion in NewLaw: “LexFusion” has put together a group of carefully selected best-of-breed NewLaw companies “representing most categories of legal innovation” intended to bring some order to this emerging burst of creativity. [Disclosure: Yes, we know Joe Borstein, one of the founders; how else do you think we got word of this before day one?]
The omnivorous Bill Henderson has already published a piece on the LexFusion business model, analogizing it to a trustworthy manufacturer’s rep who cares far more about the customer than commissions in the short term. (Putting the customer first keeps the rep honest, as does the indispensable requirement that he represent more than one complementary, non-competitive product or service.)
How will it go? The market always gets the last vote.
But win/lose/or draw, when you see a “NewLaw of NewLaw’s” category begin to emerge, you know the market has become densely populated. May the best pin factories begin to win.