The Legal Market: Unlimited Opportunities10 Jan, 2006 By: Wayne Goodreau imageSource
The Legal Market: Unlimited Opportunities
Traditionally, the legal market
has been considered a laggard market with respect to adoption of technology due
to an attitude that has been considered somewhat primitive.
Recently, however, there has been a shift in attitude. The legal industry now
represents one of the most active markets for office document solutions. There
has been a demand for technologies that enhance and automate the management of
documents, especially paper.
One of the main reasons for this change of heart has been the need to comply
with such standards as Sarbanes-Oxley and SEC Rule 17a-4 (rules that govern the
storage of all electronic messages), which have put pressure on both law firms
and in-house legal departments to improve their record-keeping and management
processes. Implementing technology such as document routing and document
management applications is an important step in enabling compliance.
Additionally, employing applications within the legal industry is almost common
sense when document solution functionality is compared with dominant processes
within the legal industry. Law firms rely on a lot of documents as part of an
attorney’s primary function, and as creatures of habit, attorneys tend to have
an affinity for paper.
In July 2005, InfoTrends/CAP Ventures conducted a survey to gauge how legal
organizations and firms were currently handling their document-centric business
processes. What types of hardware and solutions were being employed in the legal
market? What challenges were they facing? How do they see document-based
challenges being addressed in the future? The following are the results.
Of the 301 respondents to the survey, 81 percent were from independent law
firms, 6 percent were from in-house legal departments, and 2 percent were
government lawyers. Eleven percent of respondents were eliminated due to the
fact they were not in the legal industry.
Sixty-five percent of the independent law firms identified litigation as a
specialty, making it the top answer among the law firms surveyed. This was
followed by 49 percent claiming estate planning and 36 percent selecting
In terms of individual respondents, 58 percent were paralegals, legal
secretaries and legal assistants. Attorneys (8 percent), CEOs/owners (6
percent), associates (4 percent), partners (3 percent), IT managers (2 percent),
managing partners (.4 percent), CFOs/heads of finance (.4 percent), and other
(18 percent) made up the remainder.
Organizations with less than ten employees were the leading size category among
respondents at 43 percent. Thirty percent of respondents claimed to work at
companies with 10-99 employees, 15 percent said their companies had 100-999
employees, and 13 percent selected 1,000-plus.
Current State of Equipment and Solutions
The data in Figure 1 points to a number of organizations with a large variety of
equipment, both individual use and networked. In fact, the presence of MFPs is
higher than expected, which is a good sign for the solutions market due to the
fact that MFPs have been the leading platform device on which solutions have
been running in distributed environments.
However, the results in Figure
2 were not as promising. When asked what solutions were currently being employed
to assist in document-related processes, “I don’t know” and “None of the above”
were the prevalent answers. While legal is a highly visible market, in terms of
adoption of solutions, these results would suggest that suppliers have barely
scraped the surface in terms of adoption and total potential.
e-Filing: Is it Really Happening?
Other issues beyond compliance and general characteristics of the market have
been pushing the legal market towards solutions. e-filing, for example, enables
legal organizations and firms to file documents such as petitions and pleadings
over the Web with courts at all levels.
Traditionally, when filing papers with courts, legal organizations had to
deliver hardcopy documents directly to a physical location, which could prove to
be a time-consuming process in an industry where time literally is money.
Putting the responsibility of document delivery into human hands also poses the
heightened risk of loss or non-delivery.
e-filing, however, remains a new and somewhat controversial technology, so
InfoTrends/CAP Ventures wanted to find out if firms were actually using it (see
The high instance of either
currently practicing or planning to practice is promising, but the actual effect
the practice will have on the document solutions market is somewhat less
Currently, the document management developer Hummingbird is the one vendor that
stands out as a provider of a specific e-filing product. Hummingbird enables end
users to work directly from the Hummingbird document management interface rather
than the traditional method of locally saving documents and then searching for
them on the hard drive.
As e-filing matures, however, vendors and software developers can begin to make
it a functional part of their legal offerings. A document routing application
developer, such as eCopy or Omtool, could, in theory make the e-filing Web
destination a part of workflow at a device.
Research Take Away
The legal market is facing a veritable “perfect storm” of drivers that are
pushing them towards adopting document solutions, and the shift is already
happening. Software providers and hardware vendors are beginning to offer
vertically-packaged applications, and legal is almost always a part of that
However, the presence of solutions within the legal market, from the point of
view of the user organization, is not exactly overwhelming. Only a small number
actually have document solutions in place.
Vendors and providers need to ramp up their marketing efforts and better train
their salespeople and dealers on how to sell to a vertical. For too long, sales
efforts in the document imaging market have been focused on the “speeds and
feeds” side of the business, focusing too strongly on the traditional output
aspects of the technology.
Now is the time technology providers need to better understand their customers’
business process needs in order to relieve the burden and increase the
effectiveness of those in the legal industry. These are the users who need the
most help, but have been offered the least assistance to date.