Hogan Lovells has its own tech company - and its boss says every firm of the future will need one

Hogan Lovells partner Sebastian Lach thinks the legal industry is asking the wrong question when it comes to AI. Instead of "which tool should we buy?", he argues firms should be building and owning their own.

"I think that these tech affiliates are going to be a necessary part of the business of every law firm," he tells us in a conversation for The Non-Billable Podcast. "How are you going to have those conversations with your clients? They’re going to ask you, how are you using AI? How are you going to make your legal services better? And you say, I’m going to buy something from a vendor that I can’t customise. Is that a great answer? I don’t know."

DIY tech

Lach co-heads ELTEMATE, Hogan Lovells’ 100-plus-person legal tech arm. It started, he says, with a simple assessment: outside of e-discovery there were "a lot of great toys, but not the tools that we need." His thesis was that to build useful legal tech you need three things: "good legal data, legal training and software engineers - and we have two of three. So why don’t we just do it ourselves?"

That approach extends to product direction. Lach is all-in on the efficiency gains he says come from "verticals" - domain-specific tools that investigators can use to "press a button and get the desired result" or employment lawyers can use to generate markups aligned with current labour laws. In controlled tests, he says, the specialist tools delivered "between 40% and 70% efficiency gains."

Owning the economics

ELTEMATE hasn't taken outside money. "We’ve been able to cut so much cost because we’re now investing into the right things. We are not paying vendors for things nobody uses internally," Lach says. For him, the goal shouldn't be to replace billable work with paid software from someone else: "How sustainable is it to reduce your work and pay somebody else to do that?"

The stakes, Lach argues, are Blackberry-level (a nod to the rise and rapid fall of the once-dominant device overtaken by Apple's iPhone in the early 2010s). "There’s going to be innovation steps and you have to get those right. Because if you don’t, even if you’re huge, it can happen so quickly, within six to 12 months."

Listen to the full conversation for how ELTEMATE scaled from three people to a 100-person team, why legal data is king, and where Lach thinks the market reckoning is already underway.