Startup ClariLegal Aims to Simplify How Litigation Services are Bought and Sold

ClariLegalHome

The process by which law firms and corporations purchase litigation-support and e-discovery services is sometimes messy and often inefficient. Yesterday, I visited a startup, ClariLegal, that has developed a platform to simplify how these services are bought, sold and managed.

ClariLegal was founded by Cash Butler, who started the company after working more than a decade in e-discovery, most prominently for Lextranet, one of the first web-based e-discovery platforms, where he was senior operations manager, and then at Merrill Corporation after it acquired Lextranet.

Having worked on any number of discovery projects during his career, he became convinced that the process by which law firms and corporations purchase vendor services is not only inefficient and time consuming, but often does not result in the best choice or the best price.

ClariLegal, Butler told me yesterday, is his attempt to bring clarity and structure to the process and to the industry. The company began selling its platform earlier this year.

The easiest way to think of it is as an RFP platform that guides buyers through the steps of scoping out a job and creating an RFP and then enables qualified, vetted vendors to bid on the job.

It also serves as a platform for tracking and managing jobs once a vendor is chosen and the job begins. The website describes it this way:

ClariLegal is a vendor management platform and marketplace that simplifies the buying of services needed for legal work that corporations and law firms require. Both buyers and service providers benefit from reduced costs, time saved, better quality, enhanced communication and improved transparency. ClariLegal allows buyers and sellers to be in control of the work instead of the work controlling them.

Using ClariLegal

The platform allows a buyer to request bids on five types of e-discovery jobs:

  • Litigation consulting.
  • Data collection.
  • ESI processing.
  • Hosted review.
  • Document review.

The platform presents the buyer with a series of questions to answer about the job. The questions change to reflect the type of job. Thus, a data collection job would have one set of questions, a document review job would have another. All include questions about start and end dates and about preferred methods of charging for different services.

This guided process can be of benefit to buyers in making sure they cover all the bases and provide all the necessary information a vendor would need to properly bid. Butler told me that this feature is particularly popular with lawyers at smaller firms who have limited experience in putting out e-discovery RFPs.

ClariLegal also offers a “concierge” service in which a staff person will work with the buyer to complete the job posting.

Once the buyer publishes the job, ClariLegal’s software finds the vendors in the system who meet the criteria and invites them to bid. Before submitting a bid, the vendor can ask questions of the buyer, if necessary. When ready to submit a bid, the vendor has a corollary interface on the platform to provide specific pricing information — what ClariLegal calls its “line item bidding tool.”

The buyer then reviews and compares the bids, which include not only prices, but also information about the vendor’s business profile and capabilities. The system also provides ratings of both buyers and vendors.

Both the buyer and the vendor are blind to each other’s identity until a bid is accepted. When the buyer accepts a bid, the vendor is identified. If the buyer has a conflict or other reason not to use that vendor, it can step back and choose a different bid. If, after learning the vendor’s identity, it accepts the bid, the vendor is notified and is also given an opportunity to withdraw if need be.

If both parties accept, ClariLegal generates a service level agreement that both parties sign through the platform.

Once a project begins, the platform”s Project Tracker can be used by both sides to monitor the progress of a job and track milestones. Part of Butler’s goal with ClariLegal is to enhance transparency and communications in the relationship between the buyer and the vendor. The parties can use the platform to mutually set milestones and communicate with each other, and they can also invite third parties — such as an in-house lawyer — to view the job’s progress through the dashboard.

For a law firm or corporation with multiple litigation projects, the platform can be used to monitor all of them through a single dashboard.

No Fee to Buyer

The buyer pays nothing to use this platform. ClariLegal charges the vendor a service fee of 10 percent after the vendor gets paid.

Vendors must be invited to participate. Many of the vendors currently in the system were referred by buyers who are ClariLegal customers. Butler says that ClariLegal vets each vendor to ensure that it has the capabilities it advertises.

Butler believes that ClariLegal helps buyers get better prices for the services they need. The platform enables buyers to get bids from a broader and more geographically disperse set of vendors than they otherwise might. Also, the blind-bidding process allows vendors to propose lower prices without fear of locking themselves in on subsequent bids.

The first job ClariLegal ever handled saved the buyer 75 percent and buyers who use the program regularly save 30 to 50 percent, Butler says.

Butler believes he will someday expand the platform into other areas of purchasing. The company is actively seeking to raise funds to further develop its platform and to build out its user base.

“ClariLegal is about helping the buyer understand what it needs and understand what the service provider provides,” Butler told me. “I want to fix this industry.”