This article first appeared in issue 317 of the Orange Rag newsletter
The single biggest bit of news in the past four weeks – and we’d argue potentially the biggest news this year – was the launch of Reynen Court, which aims to become the marketplace where IT directors procure all new legal applications and which so far has the backing of 12 heavyweight global firms co-chaired by Latham & Watkins and Clifford Chance.
Founded by former Cravath, Swaine & Moore associate Andrew Klein and formally launched at the end of September, Reynen Court will audit vendors and offer containerised cloud applications, enabling firms to buy and run the application in their preferred environment.
At its simplest, containerisation sees an app unbundled from its infrastructure and put into a container so that it is entirely portable. The platform works on top of any infrastructure a law firm runs, whether on premise (in virtualised data centres) or in private or public clouds hosted by AWS, Azure, Google or others.
Klein tells us: “The important point is that by running containerised applications, firms get all of the benefits of modern cloud computing without having to trust content to third party SaaS platforms.”
Instead of individual IT directors having to audit and worry about the security of new providers, that will become Reynen Court’s job, with the idea that it becomes an official legal app store that, once established, clients can give their blanket approval to.
This sort of store will also help law firms to optimise their costs by enabling them to use applications as they need them.
Latham and Clifford Chance have been involved from the outset alongside Paul Weiss (vice chair); Covington; Cravath, Swaine & Moore; Freshfields Bruckhaus Deringer; Gibson Dunn; Linklaters; Orrick; Ropes & Gray; Skadden Arps; and White & Case.
The 12 firms were engaged by Reynen Court in order to add weight and advice to help get the platform off the ground. Speaking to Legal IT Insider at the time of the launch, Klein said: “We’re focussed with the law firms on a new generation of application. You have AI and machine learning and all sorts of automation coming to the legal field which presents huge opportunities to innovate and deliver services to clients in better ways and also huge challenges when it comes to trust and security, which are of paramount concern to clients.
“All new apps take advantage of the cloud but are vertically integrated and law firms are required to trust the cloud environment of vendors giving them potentially dozens of points of exposure. They want to innovate but don’t want that exposure.
“We’re devising a way to bring the apps down into the environment we know and can protect, giving law firms the benefit of the cloud but not the risks.”
He adds: “One analogy for law firms is that we are providing an App Store that you can bring onto your phone and, like the App Store, we’re going to try to create a similarly secure environment.” (see our Q&A with Klein below).
Clifford Chance’s CIO Paul Greenwood told Legal IT Insider: “From our point of view we use Kira, Neota, Workshare Transact and Docusign which are all great new tools but on the same matter we may have to upload and get client sign off for each of them – wouldn’t it be great to use them freely because they have blanket authorisation? That will really open up the potential for adoption.”
And Latham & Watson’s deputy CIO Rene Mendoza said: “We often have small startups that don’t have the robust infrastructure and don’t understand what we require but we can work with them through Reynen Court.”
In response to the news, one established vendor reacted nervously, commenting, “We’re an established player with huge security credentials, why would I work with a startup?”
A valid question, which we put to Paul Weiss’ CIO Andreas Antoniou, who said (see his quotes in full below): “More established enterprise platform solutions may not be the ones to come online first but we are more interested in creating the modern market vendor space.
He added: “Those providing new services around AI technology or more sophisticated productivity tools can’t argue that they have a more mature security framework. We’ve audited every one of the vendors we use and they are not doing such a good job so the idea that they have a better framework is not true.”
Reynen Court is in late-stage talks with a number of as yet undisclosed application vendors to make their solutions available to law firms through the platform. Initial vendors will provide contract analysis, discovery, compliance, and practice management technologies.
None of the 12 firms has invested in Reynen Court – so far the only funding has come from an affiliate of Klein, Prins H LLC – and the hope is that more firms will give the startup their backing. That will certainly add pressure on vendors and
Antoniou told us: “Vendors may have to enter the marketplace to compete. If you are providing legal tech services, you want to be in the marketplace. I’m not going to find you and take the time to evaluate you if you’re not, so you’re really at a disadvantage.”
While a number of legal tech vendors such as HighQ, NetDocuments and iManage have already begun positioning themselves as the platform or natural integrator for new applications, Reynen Court takes things significantly further.
We asked industry commentator Dan Katz, who is a professor of law at Chicago Kent College of Law and co-founder of LexPredict, what he thought of the Reynen Court offering and he said: “I do believe that there will a proper platform or even several of them. The key to winning a platform race is to get the incentives right for the participants (law firms, vendors and perhaps clients as well). It remains to be seen whether this initiative will be able to do so but this is a development worthy of attention.”
Andreas Antoniou, CIO of Paul Weiss, talks Reynen Court
“Reynen Court is a good idea because of several forces or trends facing IT teams within law firms: they need to move key services to the cloud and AI technology is now readily available. We are seeing some really good solutions for the legal industry and the expectation is that a number of those solutions will accelerate in the coming year.
“Those two forces compel someone like me who is responsible for IT strategy to come up with a different model to the traditional ‘go to vendor; negotiate; and manage that solution with that vendor’. The fact I’d have to do that in depth analysis a dozen times a year to find the best solution would require IT support that is simply not sustainable.
“If we can come to some understanding that we have a platform that normalises our ability to evaluate and put these solutions into production, we all win. The vendors on the platform will have priority over those not on the platform.
“Those providing new services around AI technology or more sophisticated productivity tools can’t argue that they have a more mature security framework. We’ve audited every one of the vendors we use and have evaluated for use. Many have mature security in place while others have work still to do.
“More established enterprise platform solutions may not be the ones to come online first but we are more interested in creating the modern market vendor space. “Vendors may not have a choice – they may have to enter the marketplace to compete. If you are providing legal tech services you want to be in the marketplace. I’m not going to find you and take the time to evaluate you if you’re not, so you’re really at a disadvantage.
“That’s the vision – we’ll know in 12-18 months how close we’ll get but the team assembled is very impressive and the firms are fully committed to ensuring the success of the platform.
“Once Reynen Court becomes an established, viable and proven business model it will be a matter of putting it in front of clients in key industries and saying ‘take a look at this solution, it provides the security and safety that we are all concerned about so we can all be ok with moving forward.’
“It’s a lot of trust but if you look at Andy’s bio and what he’s built in the past, as well as the experience of the team assembled and the type of law firms who are there to advise them, for me that is the evidence that this could well work.
“Does this normalise and equalise the playing field and remove competitive advantage? No. How you procure a solution is one thing. What a law firm does with that is the differentiator.
“The game changer is not the procurement of technology but how we provide client services and how you leverage that solution. This just gives IT the time and space to focus their attention where it matters.”
The technology play: Andrew Klein answers our burning questions
Are you planning to be a cloud provider with your own data centre and hardware?
We are not a cloud provider. Our platform works on top of any and all infrastructure a law firm runs, whether on-premise (in virtualised data centres) or in private or public clouds hosted by AWS, Azure, Google or others. Our platform brings efficiency and speed to the discovery, adoption and management of third party applications, and enables firms to place and run the application in their preferred environment and even to easily move specific applications to the environment that runs the application most efficiently. The important point is that by running containerised applications firms get all of the benefits of modern cloud computing without having to trust content to third party SaaS platforms. Our platform also generates telemetry in respect of the actual cost of each application and the storage and compute resources actually consumed in running the application. This enables firms to measure accurately and optimise their IT expenditures and potentially to develop new billing models as technology figures more importantly in the work they do.
By containerise do you mean you’re bringing the apps behind the firms’ firewall?
We bring applications to the firm’s data. The data may reside – and the computer can run – in the firm’s data centre (so long as the data centre is set up to run containers).
Alternatively, it can run in one or more cloud environments that a firm will set up under the services of a major cloud provider. We expect all firms to begin moving workloads to private clouds and eventually run most of their heavy computing in private clouds. We provide plumbing that will make this transition smooth and cost-effective.
Why is this not a horizontal play versus a legal play?
Docker Containers and Container Orchestration (Kubernetes) are indeed transforming the entire enterprise software industry. We are leveraging these technologies plus proprietary services automation software to build a vertically focused solution. In addition to simply orchestrating deployments of containers, we also bring efficiencies to both firms and vendors by centralising and standardising vendor compliance and application certification, and by enabling technical integrations to be built once and used by many. We also believe we can achieve a greater degree of interoperability between and among legal tech applications. Moreover, we aim to make training and support more standard and consistent experiences, with special attention to the unique challenges of driving innovation through large law firms.
What do vendors need to do to adopt your tech/ get involved? How must they adapt?
We support vendors in developing containerised versions of their applications and in utilising our APIs to integrate into our platform. We invite all vendors – big and small – to reach out. We believe the entire industry has much to gain.
Why would established vendors get involved – why is your tech better?
For established vendors that sell software for traditional on-premise deployment, the advantages are obvious. Containers will enable their applications to run more efficiently while both vendors and clients can eliminate costs involved in manual installations and version deployments. For vendors that have bet on moving their business to vertically integrated SaaS solutions, they will have to decide whether they have the leverage to convince firms and their clients to trust their content to the vendor’s clouds. Some of the most significant vendors may successfully win that argument. On the other hand, for many, many others the path of least resistance will be to align their offerings to the core infrastructure roadmaps of their clients – which we have not doubt means that most applications will move to private clouds (multi-cloud) over the coming years.
Do you audit vendors?
Yes. Vendor compliance and application certification is another core pillar of our platform. Not all firms or clients have the same standards, and so there is not a one size fits all solution to approving vendors and applications. But we are working with the consortium firms (and their clients) to find areas where standards can be agreed and, more importantly, we are starting to demonstrate that compliance and certification workproduct can be shared/re-used. As we build a reputation as a trusted neutral service provider, we see great opportunity to save both vendors and law firms time and money in compliance and certification.
Are you doing demos?
We will be in the near future. Have the initial 12 law firms invested in the platform? So far the only investor in Reynen Court is an entity called Prins H LLC which I control. We will have more to report about further financing in the near future.
What is your charging model? Presumably you take a percentage from vendors, like the App Store?
We are not quite ready to express the details of our charging model. We intend to help both law firms and vendors save time and money and accelerate their businesses and, in general, earn our dues in proportion to the value we create. At launch we will have two programmes for vendors. One will be for application vendors that sell with us to law firms, in which case the vendors will not pay us but will have to contract directly with, and directly engage and support, the law firms. The other will be for application vendors that sell through us, under a reseller agreement, where we will generate sales and directly support the law firms in respect of the application. In both cases, fees will also apply to law firms that bring up and use the platform, with the law firms having the ability to add any compliant application to their internal App Store and, of course, easily purchase the apps sold “through” Reynen Court under one consolidated enterprise software agreement. Law firms will also be able to “bring” their own infrastructure (private clouds or on premise virtualised data centres to work under the platform, or they will be able to purchase Infrastructure as as Service from AWS, Azure and Google Cloud through our platform.