In the swiftly evolving world of legal research, as quickly as startups plant their seeds, legacy giants seem poised to harvest them. The legal fraternity, ranging from fledgling firms to established enterprises, finds itself tethered to a couple of dominant entities. The repercussions? Rising concerns regarding unchecked pricing, dwindling competition, and a somewhat obscure insight into subscription pricing methodologies. The consequence is a scenario where consumers may face reduced affordable choices due to market domination.
However, a glimmer of optimism emerges from conversations with legal professionals. Some have stated that the legal research terrain could soon undergo transformation. While the timeline for such diversification remains nebulous, two pivotal elements stand in opposition to the current consolidation: the revolutionary capabilities of artificial intelligence, which may grant emerging legal research startups easier access, and the evolving legal requisites of attorneys and firms.
The Diminishing Options
Jean O’Grady, esteemed director at an Am Law 100 firm and the mind behind the Dewey B Strategic blog, pinpointed Thomson Reuters and LexisNexis as the reigning overlords of today’s legal research software realm. Their acquisitions of burgeoning startups like Casetext and Ravel Law bolster their dominance.
In her assessment, though these long-standing companies demand “white glove prices,” their user experience seldom mirrors “white glove” treatment. She singled out Thomson Reuters for hiking prices while paring down internal support. A conundrum lawyers grapple with today is the binding nature of legal research software, which often couples indispensable resources.
“Many people go through the exercise of saying ‘I want to get rid of Lexis or Westlaw’ and then they discover that if they get rid of it, they can’t get other products [and treatises],” O’Grady elaborated. The narrative translates to consumers being ensnared into purchasing access to vast platforms for a mere subset of their offerings.
To Richard Grungo, attorney and founder of Grungo Law, firms like Thomson Reuters and LexisNexis transcend their identity as mere legal research entities. They’ve expanded their ambit to encompass tools spanning case to document management. For boutique firms like his, he rationalizes their inevitable costs as holistic solutions exceeding mere research. However, O’Grady advocates for the power of choice, contending that uncluttered options and transparent pricing would empower consumers in their subscription decisions.
The Winds of Change
Yet, it might not all be doom and gloom. A few strong winds appear poised to shift the market dynamics.
A salient point O’Grady raised is the evolving preferences of the younger legal generation. She emphasizes a noticeable shift from the older reliance on treatises to a more contemporary preference for “practical guidance tools.” These tools, which include comparative legal charts and procedural guides, are notably easier to engineer using AI technologies.
Promising startups, Alexsei being a notable mention, are harnessing advanced AI capabilities to carve a niche for themselves, aiming to woo attorneys seeking cost-effective alternatives.
Moreover, O’Grady remarked that the impending shadow of a potential recession mirrors the post-2008 scenario. During that period, clients were averse to shouldering legal research costs, propelling law firms to absorb them, often resulting in forgone attorney research hours. With another economic downturn looming, these expenditures could once again fall under the microscope.
Taking a holistic perspective, Grungo posited that despite their growing consolidation, behemoths in the legal research arena might need to recalibrate their price tags. The catalyst? Generative AI. As this technology achieves sophistication, it might pave the way for smaller entities to infuse legal research competencies into their solutions. Both Grungo and O’Grady concur that such advancements could eventually diminish the stranglehold current market leaders maintain.
