I have previously suggested that corporate cost pressures will cause inhouse counsel to seek “embedded law systems,” that is, software that automatically detects possible legal problems. A recent press release by Aungate and an article on law firm outsourcing practices cause me to re-visit this idea.
Aungate is a unit of Autonomy, a company that provides sophisticated text retrieval and analysis software. The company announced yesterday that is has launched “a new sexual harassment and discrimination detection module that is designed to automatically alert the enterprise to acts of sexual harassment and discrimination, by analyzing the content of emails, voice and instant messages.” I cannot tell from the Aungate site how the company built the business or legal logic for this module. But consider if a law firm had partnered with the company on this product. That firm might either automatically receive reports that it is paid to analyze (and could lead to opening new matters) or at least have its logo and link displayed prominently to inhouse counsel who review the system outputs.
Separately, in “Law Firms Gauge the Outlook for Outsourcing ” the National Law Journal on October 8th reported (article available at biz.yahoo for the moment) that several large law firms have “recognized the profit of expanding an outsourcing practice to attract new clients and serve existing ones.” Outsourcing contracts are typically complicated agreements that require tremendous monitoring.
I am not certain that law firms even monitor the expiration date of contracts so that they can offer clients re-negotiation services. Imagine the potential to help clients monitor contract performance with online systems. That would certainly tie the client closely to its law firm. There is a whole software category dedicated to contract management (see my list of software) and it seems likely that corporations will adopt more active approaches to managing contracts.
Existing online systems require users to visit a web site and either search for content or run through an interactive session. The advantage of an embedded system is that corporate users need not take any action – results are automatically generated by actions of software. It may be that this will remain the exclusive realm of software companies, but creative law firms might find a way to participate in this emerging area.