Buying Software for Outside Counsel: Part 1

How to buy software as a lawyer

Law firms typically do not have a procurement process. But just because you have no procurement process doesn’t mean you don’t do procurement.

Procurement is the art of buying resources. Traditionally, doing legal work just required a few people in an office, along with basic software like Microsoft Word and legal research tools like Lexis or Westlaw. Buying new software wasn't something many law firms needed to think about often. That is the reason procurement for lawyers is typically done with no real process.

This means that law firms are typically bad buyers. Being a good buyer means making decisions quickly and fairly. A lack of good buyers hurts the industry overall because the ecosystem cannot sustain a critical mass of good tools without sufficient buyers. This creates a negative cycle where lawyers are deprived of the tools they need.

But times are changing fast, especially with the rise of AI technologies that can help lawyers do their jobs better. There is more demand than ever before. To help this budding industry take hold lawyers are going to need to learn how to run a tight procurement process.

This week in Nonobvious, we are going to dive in to what procurement is and why you should be good at it. In Part 2 next week, we will dive into tips for being good at procurement as an outside counsel attorney.

This is part of our series on procurement for lawyers. To learn more about this for in-house counsel, look here.

To see Part 2 of this series going over tips to sharpen your procurement process, look here.

The First Step In Fixing Your Problem Is Knowing You Have One

Buying new software is critical for productivity. It can give your firm an edge when competing against others and offer a better product more cheaply for your client. Because lawyers are not used to buying software, they are often inefficient at buying software. This hurts the lawyers, their bottom line, and the entire ecosystem.

At law firms, procurement is typically not handled the way you would expect a good process to run.

Procurement typically has a certain set of steps:

1. Identify Your Needs: First, figure out what you really need help with in your practice. This is usually done by engaging with the stakeholders

2. Research: Look up different software options and list their pros and cons.

3. Talk to Vendors: Set up meetings with companies that make the software to learn more.

4. Compare Options: Sometimes you can do a trial or a test run (called a 'bake-off') to see which software works best.

5. Narrow It Down: You might want to have a second round of reviews if you have a few good options.

6. Check Everything: Make sure the software passes legal and IT checks.

7. Make a Decision: Choose the software and start using it.

There are a number of ways that this breaks down in practice.

First, the key people are often not empowered in the decision making process. Associates who would be using tools have no buying power and typically are not even allowed to suggest tools. At boutique firms, buying is usually ad hoc and subject to the interests of managing partners. Senior counsel and of counsel cannot bring in the tools they like and are used to. At full-service firms buying is usually done by the law librarian with input from IT, but this is often done without deep engagement of the lawyers, who are usually totally unaware of what their buying process even looks like.

Second, lawyers are very busy people. They often do not have the time to compare options, research tools, try them out, and do training. Most vendors do not realize the amount of training they have to do. Certainly, they do not have the time to learn how a complex procurement process works. Once, I met a leading privacy scholar who had to argue with his IT team about what a privacy law meant for his firm’s procurement process—and he lost that fight! This is what happens when you don’t have time to engage with the process.

And for those reasons, lawyers are often very risk-averse. They don’t know how to check whether a company could create a privacy problem or which resources to turn to. They don't realize what a good length of time to review software is. This leads to lawyers being afraid to try out software from newer companies even though they often have some really cool stuff that the big guys don't have yet.

Most lawyers will say this is of necessity. After all, with billable hours, time is literally money.

But it isn’t actually that way. Even if you believe it is.

Buying software isn’t just about spending money—it’s about investing in tools that can make your work better and your clients happier. By learning how to choose and use the right software, you can make a big difference in your practice. Yes, it requires a time investment, but it can be done efficiently and is an investment in your practice.

Next week we will talk about some “do”s and “don’t”s in buying software and what outside counsel specifically should keep in mind.

Check in next week for Part 2!

Prior Art

In March, we covered the 2023 global drop in patent filings. This is primarily driven by a drop in American patent filings. But some places have not fallen. China is one such jurisdiction that did see growth last year. It is now the largest jurisdiction for patent filings.

This quarter’s special report in The Economist explored China’s rise as a superpower. Entertainingly, the story starts with a wall of 192 patents at the Chinese Academy of Sciences for various seeds. It is worth a read to understand some of the metrics of Chinese growth, such as scientific publications. Research indicates that Chinese patent quality is improving. Perhaps it will continue further.

Weekly Novelties

• Cert was filed in Chestek v. Vidal, a case in which the Federal Circuit held that USPTO was exempt from certain APA requirements for notice and comment periods. Administrative rules are a particularly interesting focus given the potential review of Chevron that is on the table. Five amicus briefs have already been filed (PatentlyO)

• Subject matter eligibility rejections are dramatically increasing. Notably, the AI group now includes a 101 rejection in 77% of cases even though AI applications are soaring overall (Voice of IP)

• A new analysis shows that the rise of the UPC is leading to a massive drop-off in patent cases in Germany as litigators chose a different venue (JUVE Patent)

• Impossible Foods, the original “vegan meat” company, invalidated 23 out of 24 claims in a key patent at the PTAB (Agfunder)

• GE Aerospace came to an agreement to sell their patent portfolio and licensing arm for $429 million to Dolby Labs, most notably including thousands of patents for video compression codecs (Bizjournals)

• Mimir, an NPE which purchased IP from SK Hynix, has sued Micron. Proxy warfare is growing, particularly in the semiconductor industry (KED Global)

• The FTC endorsed a USPTO proposed rule that would expand the circumstances in which settlements must be published (Bloomberg Law)

• IBM settled its dispute with Rakuten, claiming that it was infringing on patents related to its pioneering 1997 ecommerce platform, Prodigy; terms were not disclosed (DigitalCommerce360)