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Orrick Enters Automation Market with Data Privacy Tool (Corrected)

Oct. 1, 2020, 8:58 AM; Updated: Oct. 5, 2020, 4:15 PM

Welcome back to the Big Law Business column on the changing legal marketplace written by me, Roy Strom. This week, we look at a large law firm’s play to automate legal advice. Sign up to receive this column in your inbox on Thursday mornings.

Orrick is entering the nascent market for automated legal products this week, launching a tool that will help clients build a data privacy program that it says can comply with the web of laws being passed around the globe.

Orrick’s “Privacy in a Box” product guides clients through a decision tree built by the firm’s lawyers to a “principles-based” data privacy program, firm lawyers said.

Clients can access the product and 50 hours of Orrick lawyers’ time to customize the product and provide more high-level advice for $30,000, at least for now. The firm says the product is actually “free,” and the pilot program offers a discounted fixed-fee for lawyers’ time. A pared down version of the box for start-up clients is also available.

The product would cost more than $500,000 to deliver via the traditional hourly rate, said Heather Egan Sussman, head of Orrick’s global cyber, privacy and data innovation practice. The legal content took partners and associates “hundreds” of hours over a six-month period to create, Sussman said. A smaller team of lawyers spent two months working with developers to build the product on collaboration software Orrick helped develop, Joinder.

“Clients are asking us for solutions versus answers,” said Tony Kim, a cyber, privacy and data partner involved in developing the product. “Answers are responses to questions like, ‘What’s the law say?’ Solutions consider the client’s business perspective.”

Orrick’s tool adds to a short list of automation products offered by Big Law firms. Perhaps the most notable is from Wilson Sonsini’s automation arm, SixFifty, whose first products are related to data privacy laws in Europe and California. Launched in 2019, SixFifty already has “millions” of dollars of recurring annual revenue, according to its CEO and founder Kimball Parker. Last week, I wrote about a start-up looking to automate workflows in high-quantity legal areas.

There remains plenty of skepticism in the market about whether law firms can effectively develop software products that scale legal advice. It’s a costly endeavor, and high-profile failed attempts have jaded some lawyers about the prospects of so-called “New Law” models.

But a majority of law firm leaders say the legal market will be characterized going forward by a focus on efficiency, increased pricing competition, and technology replacing human resources, according to a survey this year by Altman Weil.

Law firms also expect greater competition from nontraditional legal providers. That threat is a particularly acute in the data privacy world, where vendors like OneTrust, which help companies track the data they collect, have seen explosive growth. Firms that invest early in automation products may have an edge in the looming competition.

“In the long run, the fundamental choice that most law firms face is to adjust to the new realities of the marketplace or face an increasing erosion of their abilities to compete effectively,” concludes a 2019 report authored by the Center on Ethics and the Legal Profession at Georgetown University Law Center and Thomson Reuters Legal Executive Institute.

Orrick’s product comes as privacy laws continue to change, creating uncertainty for businesses around the globe. Voters in California will decide whether to further protect data rights in November. Meanwhile, a European Union court has thrown into doubt U.S. companies’ ability to export data to their domestic market.

Orrick’s data privacy leaders say its product creates “baseline policies, procedures, and playbooks” that help companies quickly adjust as laws like the California Consumer Privacy Act and the EU’s General Data Protection Regulation change.

The product will also be able to collaborate with existing data privacy tools sold by non-legal vendors, Orrick said. The firm’s lawyers said it offers a higher level of legal advice than current vendor tools, which provide insight into the types of customer data companies collect.

“The Box brings together the different players in the industry who each supply a piece of the compliance puzzle,” Sussman said.

Kim said clients are reluctant to pay for a standard privacy policy, which the product can deliver at little to no cost. But clients are still happy to pay for high-value legal advice on how to leverage “next generation” data like geolocation data, biometric data, or telematics data, without violating and rapidly changing laws, he said.

The firm is looking into developing products across the regulatory-compliance landscape, including practices such as antitrust, anti-corruption, cybersecurity, payments, international trade, and others, Kim said.

Wendy Butler Curtis, Orrick’s chief innovation officer, said the new delivery method is a “game-changer” for the practice, allowing automated updates to be pushed out to all clients through the box without a labor-intensive process.

“That’s a win for both sides,” Curtis said. “The client gets better advice, and we are able to manage the delivery of that advice.”

Worth Your Time

On Big Law Investments: An investment arm run by Cooley’s associates and partners made a mint on the post-IPO boom by cloud data platform Snowflake this week. Brian Baxter reports the investment vehicle owns shares worth more than $155 million at one point this week. While the investment may be a boon, the set-up also carries conflict of interest questions for law firms.

On Covid Bonuses: Two of the most prestigious firms in Big Law are now reportedly sitting out the round of special Covid associate bonuses after Above The Law reported Cravath, Swaine & Moore will not be paying them. That follows a report that Kirkland & Ellis was also on the sidelines.

On IPOs: I wrote a couple weeks ago about the law firms winning work on special purpose acquisition companies, the hottest way to take a company public this summer. Another hot product has emerged in that market: the direct listing. Data start-up Palantir Technologies and cloud-based work management platform Asana both went public this week through direct listings.

That’s it for this week! Thanks for reading and please send me your thoughts, critiques, and tips.

(Corrects description of Orrick's relationship with Joinder software in paragraph five of Oct. 2 story. )

To contact the reporter on this story: Roy Strom in Chicago at rstrom@bloomberglaw.com

To contact the editor responsible for this story: Chris Opfer at copfer@bloomberglaw.com

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