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The Shrinking Ownership of Law Practice Management Technology (Part 4 of 4): Wrapping It All Up

Over
the
first
three
posts
in
this
series,
I’ve
talked
about
the
shrinking
ownership
of
law
practice
management
technology
for
solo
and
small
firms

how
most
of
the
major
contenders
in
the
market
have
all
come
to
be
owned
by
just
six
overarching
ownership
groups.

I’ve
shown
you
who
those
groups
are
and
which
products
they
own.
I’ve
covered
what
we
know
about
their
market
share
and
what
we
can
expect
as
they
each
seek
to
expand
their
customers
and
revenues.

For
this
final
post,
I
thought
it
would
be
useful
to
just
wrapup
some
of
the
key
market
trends
I’ve
covered.

  • Ever
    since
    Clio
    launched
    the
    first
    commercial
    cloud-based
    practice
    management
    platform
    in
    2008,
    lawyers
    have
    steadily
    and
    increasingly
    moved
    to
    cloud-based
    platforms.
  • Although
    practice
    management
    technology
    pre-existed
    the
    cloud,
    the
    ease
    of
    adoption
    and
    ease
    of
    use
    of
    cloud
    software
    has
    increased
    lawyers’
    use
    of
    practice
    management
    software.
  • While
    some
    legacy
    on-premises
    platforms
    remain
    in
    the
    market,
    their
    customers
    are
    increasing
    switching
    to
    cloud
    platforms,
    and
    even
    their
    owners
    are
    encouraging
    customers
    to
    move
    from
    their
    on-premises
    systems
    to
    cloud
    systems.
  • Also
    driving
    greater
    adoption
    of
    these
    systems
    is
    lawyers’
    greater
    awareness
    of
    them.
    In
    part,
    this
    is
    due
    to
    effective
    marketing
    by
    the
    companies,
    but
    it
    is
    also
    attributable
    to
    two
    other
    factors.

    • One,
      I
      believe,
      is
      the
      ABA’s
      promulgation
      of
      the
      duty
      of
      technology
      competence
      and

      states’
      adoption
      of
      that
      duty
      ,
      which
      has
      driven
      lawyers
      to
      be
      more
      mindful
      of
      the
      benefits
      (and
      risks)
      of
      technology.
    • The
      other
      factor
      is
      the
      pandemic,
      which,
      of
      necessity,
      accelerated
      lawyers’
      need
      for
      cloud-based
      systems
      to
      manage
      their
      practices.
  • In
    the
    early
    years
    of
    cloud
    practice
    management,
    the
    success
    of
    companies
    such
    as
    Clio,
    Rocket
    Matter
    and
    MyCase
    inspired
    a
    surge
    of
    similar
    practice
    management
    startups.
  • Beginning
    around
    2018
    and
    continuing
    through
    today,
    those
    companies
    began
    to
    be
    consolidated
    through
    acquisitions
    by
    investment
    groups.
  • That
    led
    us
    to
    where
    we
    are
    today,
    with
    just
    six
    ownership
    groups
    having
    control
    over
    the
    majority
    of
    practice
    management
    platforms.
  • Clio’s
    recent
    record-setting
    raise
    of
    $900
    million

    the
    largest
    ever
    for
    a
    legal
    technology
    company
    of
    any
    kind

    establishes
    it
    as
    the
    leader
    in
    the
    practice
    management
    field,
    at
    least
    in
    terms
    of
    size
    and
    reach.
  • As
    all
    of
    these
    companies
    seek
    to
    continue
    to
    grow
    and
    expand,
    there
    are
    three
    likely
    ways
    they
    will
    do
    this:

    • Horizontally
      across
      their
      target
      market,
      seeking
      to
      expand
      the
      numbers
      of
      solo
      and
      small
      firms
      they
      serve.
    • Vertically
      into
      specialized
      practice
      areas,
      seeking
      to
      better
      serve
      solo
      and
      small
      firms
      in
      areas
      such
      as
      immigration,
      personal
      injury
      and
      bankruptcy,
      to
      name
      just
      a
      few..
    • Up
      market,
      seeing
      to
      acquire
      customers
      among
      larger
      law
      firms
      in
      the
      mid-firm
      range.
    • Geographically,
      going
      after
      customers
      in
      other
      countries.
  • To
    make
    themselves
    more
    appealing
    to
    these
    expanded
    markets,
    practice
    management
    companies
    will:

    • Continue
      to
      enhance
      their
      core
      practice
      management
      features.
    • Develop
      new
      products
      and
      capabilities
      using
      generative
      AI.
    • Expand
      their
      platforms
      into
      “practice
      adjacent”
      areas
      such
      as
      litigation
      support,
      e-filing,
      service
      of
      process,
      e-discovery,
      and
      more.
    • Expand
      the
      financial
      services
      they
      offer.

Please
Share
Your
Feedback

I
am
eager
for
your
feedback
on
this
series.
What
have
I
overlooked?
What
do
I
have
wrong?
What
else
is
going
on
here?

Based
on
the
feedback
I
receive,
I
plan
to
revise
and
update
these
posts,
and
possibly
expand
them
into
a
single
report.

You
can
send
me
your
thoughts
by
emailing
me
at
ambrogi@gmail.com.

Here
is
the
full
series: