The document management, search and AI spaces have seen accelerated activity and innovation over the past two years. iManage’s acquisition of RAVN, announced May 24, 2017, brings these three streams together. Integrating all three categories into a single product likely will have a significant impact well beyond the deal. We discuss here the potential impact on document management (DM), search and artificial intelligence (AI), and how this new platform approach validates both emerging and maturing trends. For context, we start with an overview of how the market arrived at this point.
A Decade of Change: Trends in Legal Tech
After years of relative inactivity on the vendor side in both search and document management, we now see a generational, if not a once-in-career, shift in the market. Many factors have led to this major point of inflection.
- Lawyer needs have changed significantly versus a decade ago, with better collaboration, real (not just stated) information governance, more value for clients, mobile work (from anywhere), and cybersecurity.
- Technology has changed dramatically with the rise of cloud computing, mobile devices and apps, and enterprise-quality open source code.
- Artificial intelligence needs to be considered separately. The rise of machine learning and other AI creates many opportunities. While the AI hype concerns us, we do see tremendous potential.
- Client demands have increased. General Counsel want more efficiency, more security, and more transparency in how their outside counsel work. With 1000 people attending the CLOC conference earlier this month, it is clear clients are organizing and improving their game.
Accelerated Market Innovation in DM and Search
Prompted by these changes, we have seen major advances in the two leading providers of document management systems. As a partner of iManage and NetDocuments, Fireman & Company has extensive experience with both and here is what we see. NetDocuments, which started as a cloud-based system, has gained significant market share in the last few years as it has upgraded its features, functionality, and back-end architecture. iManage, now back to a stand-alone company with the ability to invest and plan its own future, has invested significantly in developing the next generation of its flagship product.
We have also seen substantial change in the search market. Recommind, long the dominant provider of enterprise search for law firm KM, is rapidly losing market share. Multiple new or newly improved options now vie for mind and market share. We see that most firms buying or replacing existing search installation are looking at Handshake Universal Search and RAVN (again, Fireman & Company partners with both). But other choices are available, including the industrial-strength Sinequa.
The Acquisition’s Impact on DM, Search and AI
So, with all the changes, what should we make of iManage’s acquisition of RAVN? As noted above, this is a bold move. It brings together DM, search and AI in ways that may that well affect all three. What this means for law firms, both those comfortable with their current tech stack and those evaluating significant changes, is important to consider:
Foundational Platform. Both iManage and NetDocuments have been innovating at a rapid pace over the past few years. Both companies have invested in advanced data analytics, entity extraction and other services that add significant value to matter management, pricing analysis and knowledge management. What RAVN brings to iManage is a powerful analytics, machine learning and visualization platform, in addition to solid enterprise search capabilities. With iManage planning to integrate key RAVN tools (auto classification and clause banks, for example) into its platform, iManage is doubling down on a vision of the DMS as a legal service delivery foundation. NetDocuments has also been developing similar capabilities with its sizable investment in SOLR and Lucene open source search tools.
Adoption. We discuss AI in a separate section below but, for DM purposes, we expect that with the addition of AI and other extraction / classification techniques, adoption will grow. (As a side note, we see many law firms across size ranges where lawyer use of the DM ranges from under 50% to typically no higher than 75%.) With the potential for automatically classifying document type and extracting key metadata, the effort involved in saving documents may go down. And, finding documents in the DM – even without search – likely will be easier with more fields and facets available to filter content quickly.
Information Governance. In the age of regular and massive cyber breaches, every law firm now takes cyber and data security seriously. Beyond hardening the perimeter and detecting intrusions, today most firms assume that at some point a breach will occur. To minimize damage when an intruder gains access, documents must be properly secured to those who need access. Consequently, firms are rapidly moving to gain wider adoption of DM and better lawyer compliance with information governance policies. Gaining that compliance remains a challenge because it requires lawyers to take extra manual, tedious steps. The addition of AI for automated entity extraction and document classification will almost certainly ease IG challenges.
Search as Platform. Legal-focused search platforms have evolved significantly over the past two years. We see the RAVN acquisition as validating the “search as a platform” approach that RAVN, Handshake Universal Search and Sinequa had adopted. Search is no longer a black box bolt-on tool to other law firm IT infrastructure. Each of the above platforms offers APIs and developer tools to build search apps, leverage personas and deliver information in context based on client work, time entry and more.
Almost all firms have DM, but only some have enterprise class search. The iManage acquisition of RAVN signals that search has now become a core part of DM. (NetDocuments has also made search core to its platform by using SOLR and LUCENE open source search tools.) We believe the integration of search into the DM and the addition of AI to search will eliminate many of the past challenges with search, such as auto-classification and relevance ranking.
Mainstreaming Legal AI. As noted at the outset, we have observed a bit too much hype around legal AI for our taste. But, we do believe that the acquisition of RAVN signals the validation of legal AI. As important, it reflects a more complete “productization” of AI. Most legal AI products to date tend to be stand-alone solutions. With AI integrated into a core platform, it will become a tool lawyers use regularly. That is, instead of “going to an AI tool” for a specific task, the “AI tool will come to lawyers” as part of tools and workflows already in place.
Competitive Hotbed. NetDocuments has told us that they too have looked at AI companies to acquire and, in parallel, is considering a build rather than buy strategy. With Google, Facebook, and Amazon all having open sourced their AI tools, building AI into other systems at relatively low cost and effort is now possible (compared to what it would have taken even two years ago). iManage’s RAVN acquisition will likely push improvements in this area to even more law firms, lawyers and clients. Beyond DM, we think this acquisition will accelerate the already vibrant development of use-case specific AI tools. The list of AI tools grows longer by the month. Prominent acquisitions are always a good motivator for budding entrepreneurs. Moreover, so many types of AI and potential legal market use cases for it exist that we think other products will continue to thrive.
Regardless of the deal’s details, we see this as a turning point for the market. Document management will move from what had been almost an afterthought utility at many firms to being deeply integrated with the business and practice of law. Likewise, both search and AI will become core parts of law firm infrastructure.
We have long focused on identifying and understanding law practice and law firm business problems and then turned to technology as part of the solution. For us, this deal heralds two exciting advances in solution design. First, many good solutions will now be easier to design and deploy. And second, the deal’s validation increases the awareness and likely willingness of lawyers and firms to embrace more sophisticated solutions.
By Joshua Fireman and Ron Friedmann, Fireman & Company