When the poison pill was invented in 1982 by Marty Lipton, it was in a sense the AI, machine learning and #legaltech of its day. Although now a ubiquitous tool in the back pocket of every corporate lawyer advising public companies, the poison pill — like AI — was ridiculed and then challenged in the courts before becoming globally adopted. Now, as I noted this week on LinkedIn, innovation is not synonymous with technology and, to the best of my knowledge, the poison pill was a purely legal innovation — no tech involved. And, while measures like the poison pill helped Wachtell Lipton become the most prestigious law firm in the world, Marty Lipton receives no royalties for his innovation — again to the best of my knowledge.
But as software continues to eat the world, will law firms begin creating innovation that can be monetized outside of prestige? Could the next industry defining innovation — let’s call it Poison Pill 2.0 — be a technology powered solution invented by a law firm and licensed by every other law firm?
Evidence suggests that we may already be there. Some of the most buzzed about legal tech companies like Doxly, Luminance and Heretik have investments from global law firms. ALSPs (which for all intents and purposes are simply next generation law firms) like Axiom, United Lex and Integreon are making technology implementations a more significant part of their offering, not to mention Integreon’s recent acquisition of tech company Allegory, founded by former Gibson Dunn litigator Alma Assay. Irish firm McCann Fitzgerald recently announced a GDPR compliance score generator, built in partnership with Neota Logic, that they built internally for their own clients but intend to license to others as well.
When I was at the ALT conference in Arizona a few weeks back (and at Legalweek New York a few more weeks back), one of the main questions I asked many of the law firm folks in attendance was, “Would you ever consider licensing technology built by another law firm?” or the corollary “Have you ever considered licensing that technology you built in house to another law firm?” Their responses suggested that this new reality may already be upon us.
These are the two most important questions for law firms who see technology as an opportunity rather than a threat. Law firms have an advantage that most emerging tech companies do not: (1) clients who already trust them (2) money to spend and (3) direct access to their pain points and the pain points of their clients. The only thing stopping law firms from building Poison Pill 2.0 is themselves, the icky feeling that building software isn’t “what law firms are supposed to do” or the discomfort at giving business to a competing law firm. But these same law firms had no such compulsion over using Marty Lipton’s poison pill — would they not have used it had it required paying an annual subscription fee to Wachtell Lipton?
Are you or your law firm working on Poison Pill 2.0? Get in touch with me and let me know — both on and off the record conversations are welcome. Want to follow my upcoming conversations with legal industry innovators here on Bloomberg Biglaw Business?