Who is trying to compete with them, and why it’s not working
Why it is nearly impossible for another company to replicate their success
All Hail King Relativity
Who could possibly disrupt this industry enough to unseat the giant? A SaaS solution like Disco or Everlaw? An analytics application like Brainspace or NexLP? Could one of the ‘classics’ like Concordance or Ipro rise from the ashes? What would happen if Google gets in the game? How about its own heir, RelativityOne?
Nope. Not a chance.
To understand why Relativity will continue dominating the eDiscovery software space for the foreseeable future, you need to understand why Relativity is so dominant in the first place.
3 Reasons Why Relativity Reigns Supreme
Relativity’s unprecedented success can be attributed to three simple things:
1) Relativity built a platform, not a review tool.
Back in 2007, when every other legal tech company was building applications for specific areas of the EDRM, Relativity empowered its users with a DIY toolkit to tackle their own problems. While this “do it yourself” approach was a tough sell for many legal teams (and some still complain that Relativity is a complicated “beast”), for the true eDiscovery experts in the field, Relativity was freedom. It allowed them to say “yes” to just about any work request. Lawyers like hearing ‘yes’ from their support teams, and support teams like saying it.
Process 10 million documents? No problem. Need a popup window to warn a reviewer the document has hidden text? Sure, give me an hour. What about developing an integration with an internal accounting system? On it.
The reason that other SaaS providers like Disco, Logikull, Everlaw, RelativityOne , Catalyst, and Reveal aren’t successfully challenging Relativity is because they don’t empower users to solve their own problems. Instead, users must rely on the software company’s support team, and waiting around for a response from a software company is uncomfortable when the clock is ticking.
Disco, Logikull and half a dozen other SaaS platforms are, in fact, gaining traction since they’re easy to use, but most legal professionals aren’t willing trade control for convenience. They want a professional-grade product with an open back-end. They want something like Relativity.
2) Relativity outsourced their sales department.
We all know about 100+ service providers that are ready, willing and able to support your Relativity hosting needs. You would think another software company would replicate this model. And the truth is, they’re trying, but it’s an uphill battle that will ultimately end in defeat.
Why can’t someone replicate Relativity’s channel program? Because the conditions that spawned the channel in the first place no longer exist.
Let’s hop in the way-back machine to 2008, when Relativity truly took off. The prior year saw a significant change the FRCP rules, and suddenly there was money to be made in eDiscovery. Hundreds of paper-discovery businesses (photocopying, scanning, etc.) were looking for the next big thing and Relativity was just what the doctor ordered.
Relativity developed a licensing model that opened a huge opportunity for these small businesses to leverage their deep relationships with law firms into a highly profitable, recurring revenue stream. Everyone jumped onboard and everyone, including Relativity, benefited from the symbiotic relationship.
Flash forward to 2018, and the vendor landscape has changed. The channel is now concentrated into a few giant companies, most of whom stand to lose significant investments if the market shifts away from their beloved giant. Not only that, and perhaps more importantly, there simply isn’t a ‘highly profitable revenue stream’ for vendors that partner with a SaaS platform. Hosting rates are down and there isn’t enough room for a service provider and a software company to fund their business on hosting fees. (This is a big part of why the vendor community isn’t jumping onboard with Relativity One, there simply isn’t a way for service providers to make any money on the new Relativity One licensing model.)
Keep in mind that even though the vendor landscape has changed, it is still very difficult – and expensive – to sell anything to law firms. Law firms are notoriously difficult to sell to. No two operate the same way, they may have confusing budget cycles, and there’s often complex power dynamics to navigate. Consequently, software companies still need a channel program to gain significant market share, but the vendors aren’t motivated like they were 10 years ago.
Bottom line: The chance that 100 vendors would go all-in with another hosting platform, especially a SaaS platform, is very, very low.
3) Relativity has a loyal fanbase.
It’s not just the entrepreneurs of the LSP world that have skin in the game: there are well over 100,000 people that have used Relativity. 2,000 of which are legal professionals who have invested their personal time into becoming certified Relativity administrators (RCA’s).
Law firms and vendors alike have spent enormous energy building workflows, templates, process documentation, plug-ins, custom scripts, training manuals, production templates, billing models, marketing materials, and countless other collateral.
In other words, people depend on Relativity remaining the center of the eDiscovery solar system. Sure, things will change, other technologies will come and go, but Relativity has become a sort of operating system for the legal industry, much in the same way Microsoft is core to the business world. We can improve pricing models, workflows and adopt new technology… but changing the OS is not on the foreseeable horizon.
There will never be another Relativity because the eDiscovery community will never coalesce around a single technology the way we have with Relativity. There will be splinter groups that go with some of the new entrants, but the fact is, very few people are actually hoping there is a revolution. Most just want things to stay the way they are so they can focus on other problems.
But, Nothing Lasts Forever.
By no means are we so disillusioned to think that Relativity will never be replaced. What we’re saying is that there will never be another Relativity. Even if a new-and-improved application comes along, it’s simply too late. There just aren’t 1,000 small businesses begging for an opportunity to pop eggs into that basket.
iPods were replaced with phones, not better MP3 players. DVD’s were replaced with streaming video, not smaller or thinner laser discs. Relativity, too, will be replaced by something totally different.
O365 is an example of what it looks like when corporations take charge and cut everyone out of the deal, including Relativity. And maybe that’s possible, but that’s a topic for another day.