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Breaking news: Microsoft shuts down legal team – jobs go

In one of the biggest turnarounds in recent years, Microsoft today announced it was closing down its Redmond-based specialist legal vertical market team with immediate effect. Jobs are being lost including Norm Thomas, who has been the public 'face' of Microsoft legal and professional services for a number of years. At this stage it is too soon to know what impact this will have on some of Microsoft's legal sector projects, including the Sharepoint DMS and native Word redlining initiatives at Clifford Chance. It is expected that the announcement will also see Microsoft cutting back on legal-specific sponsorship, marketing and events activities.

This is the text we received from out contact at Microsoft – we wish the staff well for the future…

“Today we learned the disheartening news that Microsoft are closing its Legal & Professional Services sales teams entirely, effective immediately, and everyone associated will no longer be with the company after Friday.”

25 replies on “Breaking news: Microsoft shuts down legal team – jobs go”

Although Microsoft’s announcement has come as a shock, I do not think its impact will be as bad as some may make it sound. Although Clifford Chance will probably be less than pleased, as far as I am aware they are the only firm to have invested a lot into using SharePoint as alternative to more common legal DM systems. It would probably be more of a worry to anyone who had invested a lot of time and money into using one of Microsoft’s Dynamics CRM systems but I don’t know of anyone who has been unfortunate enough to take the plunge with one of those in a big way.

How long before one of those ad's on the right disappears?

Microsoft's impact in Legal & Professional Servics is not necessarily diminished by the reduction in force. I suspect it's more a matter of showcasing its interest in helping MSFT partners promote the numerous add-ons for professional productivity rather than being perceived as their competitor. This is consistent with its overall strategy.

Other than selling the Dynamics and Sharepoint platforms, what legal specific products did MS actually sell?
Am wrong in thinking MS partners did “the legal bit” on top of those platforms?

This department of Microsoft has nothing to do with Dynamics CRM.
Dynamics CRM is a platform which companies like Peppermint Technology and CRM4Legal are using to deliver Legal products, Microsoft themselves don't offer anything in the way of legal domain specific products as far as I am aware

Thats like saying that Lego have stopped making Star Wars sets, so people won't be able to build the Millennium Falcon out of Lego.
You can still make it out of the bricks, even if Lego dont sell the kit

The Microsoft division worked on special projects like the Clifford Chance DMS project – where Redmond is reputed to have put over £1million of funding into the project + work with firms on the MS Word Compare redlining software, which is meant to be a competitor for DocsCorp, Workshare & Litera …CC

As much as those of us working within it would like to consider otherwise, the legal vertical isn't a particularly lucrative market. Specialised, with regional requirements (state to state in some places let alone country to country) and a market where a few larger global providers and a host of smaller local providers already service the market reasonably well. In addition as other posters here have noted Microsoft is well embedded in the market in any case.
I think if nothing else it highlights that although Microsoft solutions are great, without a specific focus on legal sector requirements they're not always the panacea we hope they would be and sometimes it's better to look to specialists with a history of, and future in providing for law firm specific needs.

Toby in that case why has Microsoft not done the same with Retail, Finance, Government, Healthcare, Energy …. The reality is that legal is a niche market and Microsoft needs to focus on Apple and Google to be relevant long term. Legal will not get them there…..

The fundamental message here is simple and has really not changed over the years- The legal market is a rounding error on Microsoft's income statement and as a result they do not really care what legal does. As someone that invested heavily to make Sharepoint work we learned the hard way that our requests never got too far. The Professional services industry team at Microsoft have had internal struggles for years about their relevance and their elimination was only a matter of time IMHO. The Professional Services industry team did a good job of hiding these internal struggles and display a facade of commitment to the legal market but reality eventually sets in as it always does.

This is not complicated, I'm guessing that someone at Microsoft has calculated that 99% of the top 10,000 law firms are using Windows/Office, etc. and that the switching costs away from the Microsoft platform/tools is so great, and that there really is not viable alternative, that they don't need to spend a dime marketing to this vertical.
All these law firms bill their time by the hour, so being more productive is antithetical to their business model.
If Microsoft is smart, and I know a lot of smart people there, perhaps they will take the $$ they spent on this vertical, and invest it in markets where there is exponential growth.
Microsoft could easily eliminate 20-25% of their headcount and programs, with no net lose to their profits, and a dramatic reduction in their COGS.

After working for 2 years with Clifford Chance, Microsoft probably decided that all law firms are too difficult to work with. They're probably right, which is why this market is generally left with second-tier applications.

I’m sure that you are right and Microsoft did not build anything specifically for the legal market themselves. However, until today they would have been providing a lot of support for those companies that were delivering [or planning to deliver] legal solutions based upon the Dynamics platform. As I understand it, building solutions upon the Dynamics products is a tough job. If you are going to do it, it helps to have a lot of support from Microsoft. CRM4Legal is a successful US based company who has reached a level of product maturity, so will not be particularly impacted by this move by Microsoft. On the other hand, as Peppermint do not yet have a product in the market, they might be wise to rethink their strategy. It will be tough enough for them putting their own margins on top of the costs of Dynamics, SharePoint, SQL, etc. without having to defend building on a platform where the manufacturer has publicly shown a blatant disregard for their market. I would think twice about recommending a solution based upon Microsoft’s Dynamics products to any of my legal clients and I imagine a lot of others will now think along similar lines.

Have lego stopped making Star Wars sets??!! You've potentially ruined my weekend.

Agree with all of the above. Legal is merely a pimple – even in the professional services vertical it doesn't rate much of a mention outside perhaps the top 5 or 6 firms in the world, and does not even come close to the likes of KPMG or Deloitte etc. Makes law firms about as useful and attractive to the likes of Microsoft as the local kebab shop. Apologies to all the CIOs out there in legal land (let's be honest, you are IT Managers at best if your firm is not in the top five globally. No amount of awards, title changes, articles, press releases, free lunches from small suppliers, etc will make you comparable to a real CIO). Until the purchasing power of some people is aligned suitably with their egos they'll forever be small fish in a very very small puddle which is a few hundred yards from a pond. Large vendors sell and build relationships with leaders. IT Managers in law firms are not leaders unless they are partners. Are there any? Are there any paid like partners? You're paid like a partner when you think, act and add value like a partner. Microsoft get it.

Additionally they most likely don't see any easy growth opportunities in legal. Both CRM and DMS are markets that are more mature and Microsoft would have to make and sustain investments over along period of time to win these battles.

The Microsoft “badge” (or any other) means nothing. Only the quality of the solution and how it changes lawyers lives and improves the lot of their clients is what matters. The sycophantic attitude shown by many towards Microsoft should stop right now. There are no short cuts to genuine success in legal IT, and there are plenty of brilliant apps out there from companies who didn't have to pray at the Microsoft alter for what they have acheived.

Microsoft are pushing Dynamics CRM very hard, for all manner of markets.
Just because Microsoft doesn't have a motor vehicle department doesn't mean that they won't support companies building dealer management systems using Dynamics CRM. The same of course is true for Legal.
The kind of support that anyone, including Peppermint need from Microsoft when developing Dynamics solutions is general support regarding the platform, not domain specific support.
Looking at the people who actually work for Peppermint, thinking that they in some way need the support of a US based Microsoft Legal department is just silly.

From a business standpoint, it makes sense that with the majority of large firms (and likely mid-size firms as well) all having MS Enterprise licenses, there was not a lot left to sell. Did they really need an entire sales and marketing team dedicated to selling to a small vertical market? Probably no longer needed. However, from a PR standpoint, to suddenly shutter the group and pull out in the manner they did, it does send a message of abandonment. It would have been better had they slowly, over a period of months, scaled back on personnel and marketing activities in that group rather than an abrupt exit.

Surely this simply amounts to throwing “a few developers” at Clifford Chance to help with “the legal bit”?
I don't see MS investing £1million in development time – this must be made up of licensing, tools and other “incentives”.

Hit the nail on the head with a whopping big hammer right there.

The OpenText Add “90% of the Amlaw 200 chooses OpenText” seems dated to the late 90's. Besides there is a 'bug' in the grammar!

There have been an amazing number of comments on this subject, understandably I suppose. However, some of the detail around this has been released by Microsoft and it seems that its a small sales team of 3 people, US based, and focussed on the office products. Its unrelated to the business solutions side (Dynamics etc).
Have a look at the article from friday on law.com.
Microsoft this week disbanded its team of legal-industry specialists who focused on selling Office applications to large law firms.
The team became unnecessary as a victim of its success — large firms already buy the core Office programs and are increasingly using Sharepoint. Managing director Brian Zeve, sales director Norm Thomas, and marketing director Karin Breedis were let go, while industry expert Mark Beckmann is being reassigned, people familiar with the changes said.
“Like all companies, we evaluate our business on a regular basis and deploy our resources to meet business demands,” Microsoft said in a statement to Law Technology News.
“Microsoft’s legal industry practice is now part of our core enterprise business group and will continue to be supported by our account management, industry partners and product teams. Ultimately, this means Microsoft will continue to provide legal solutions as part of our core offerings. Microsoft is committed to our customers and partners in the professional services and legal industries,” the statement continued.
Zeve, Thomas, and Beckmann also declined to comment at this time. Breedis could not be reached.
Bud Phillips, CIO of 353-attorney firm LeClair Ryan, said the changes are understandable. “I could see that being a reasonable thing for Microsoft to do,” along with increasing the size of the Dynamics team, he said.
“By and large the Microsoft Office suite is really standard in all law firms that I'm aware of,” Phillips noted, in Glen Allen, Va.. “We are a user of Sharepoint and we're expanding our use. If they were to disband their sales team, that's not going to have a material effect about how I think about using their product.”
The team that was eliminated is unrelated to Microsoft's Business Solutions division, which has a separate legal team for Dynamics CRM. On the e-discovery side, Microsoft has not yet disclosed its plan for the recent acquisition of Prodiance.

The Microsoft announcements last week refers to the Microsoft direct sales efforts into this market. This is a separate part of the business from the Partner organisation which supports Peppermint Technology. The partner programme, and all the support we get from it, is very much alive and well. If anything Microsoft are increasing efforts in this area in line with their strategy. They recognise the legal market is too specialist for them to invest in directly therefore embrace and develop partners with the expertise. Microsoft focus on providing the base technology while Peppermint focus on providing the legal domain specialism. The changes announced simply reinforce this strategy.
Our choice of the MS Dynamics CRM platform, with over 2 million users, is growing from strength to strength. I don’t know of any legal platform capable of that scalability? I know some other legal suppliers are grasping for something to slow us down but they will be disappointed. Peppermint and Dynamics are only heading one way in the legal market – growth through innovation!
Arlene Adams, Managing Director, Peppermint Technology

Sorry but that's predictable vendor spin. The truth is for 10 years we've seen a 'will they won't they' discussion with Microsofts approach to legal. Yes its only marketing and sales that have gone but the same happened to SAP (who also said don't worry, other vendors will apply the legal skin). If they (Microsoft) were seriously interested in the likes of Peppermint, Sword, Epona etc providing industry standard solutions based on Microsoft products they surely would have used their massive marketing machine to deliver that message, not just quietly shut up shop with a 'closing effective immediately'. They have instead left their 'partners' with the unenviable task of convincing the market that they do care really and there won't be compatibility/cost/support issues down the road.

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