In the season of seemingly never-ending user conferences, the NetDocuments Inspire conference took place this week in Scottsdale, Arizona. NetDocuments is one of the leading document management service providers and is finding its way in the AI landscape. I came to its conference frankly wondering whether its laser product focus and credibility could sustain it long term in the era of consolidation of functions and offerings. I still don’t know the answer.

The Opening Keynote

The opening keynote was primarily given by Josh Baxter, NetDocuments CEO, along with Dan Hauck, its Chief Product Officer.

In the era of bombastic, over-the-top keynotes by C-suite legal tech bros leaping about the stage, Baxter’s approach was refreshing. He was understated and spoke in a calm, credible voice. As Baxter put it when I met with him separately, “We’re not a rock band.”

Baxter reflects the company well. NetDocuments has always quietly delivered a workman-like document management system. It doesn’t overpromise, and it usually overdelivers. I think that’s why it is used by so many law firms. Its team can walk into a room of skeptical lawyers and let the products sell themselves. Too often, legal tech vendors forget that at the end of the day, they are selling to lawyers who are trained to be skeptical and can spot bullshit a mile away.

An Apology

Baxter’s opening remarks reflected this approach and the company’s attitude. He didn’t start by touting NetDocuments successes; he started by taking responsibility for an outage last week that affected NetDocuments customers. You have to understand how that played. Baxter was talking to a room full of mostly IT people. He understood that when systems from outside vendors fail, angry lawyers who know little about technical issues flood IT personnel with demands to get it up and running immediately. Who gets the blame and takes the beating? The IT folks. I talked to some of them afterwards about the outage who confirmed that was exactly how it played out.

Baxter put that event up front and didn’t sugarcoat it.

The Announcement of AI Profile

The product announcement portion of the keynote primarily focused on a new tool called AI Profile. AI Profile is designed to run in the background (it’s no coincidence that many of NetDocuments tools run in the background doing nuts-and-bolts work day after day that the user rarely notices). It’s designed to use metadata to automatically profile the critical information about a document, so that users can drill down and get the information they need. This enables users to precisely search for and find particular documents on particular issues.

Ahh metadata, I haven’t heard that term much lately. The problem with metadata has always been that inputting good metadata into any system takes time. Lawyers and legal professionals aren’t and won’t spend the time to input critical metadata about documents.

When they are done working with a document, they’re done. And it shouldn’t be surprising that this is the case: most NetDocuments customers bill by the hour. Inputting metadata isn’t billable.

The second problem? Lawyers by nature are independent. Which means 10 lawyers can produce the same document and call it 10 different things. And they are all convinced they are right.

And as one of the placards outside the session rooms put it, “Lawyers didn’t go to law school to fill out metadata fields.”

But it’s metadata that reveal the guts of a document: its type, its unique characteristics, and what it does. So, it’s valuable and NetDocuments seems to have found a way to automate its collection.

How Does It Work and What Does It Do?

NetDocuments has created a prebuilt taxonomy and document attributes to profile various documents based on working with experts in legal taxonomy and data extraction. (The taxonomy can also be customized to meet particular firm needs.) AI Profile will look at a document and fill in the information about it based on the prebuilt profile. This can be done quickly across millions of documents.

Hauck gave an example of the preparation of a cell phone tower lease agreement in Arizona. With profiling, I can access all the leases for cell phone towers in Arizona the firm has done and then access the key unique clauses.

And by having AI tools run on profiled documents, you reduce response inaccuracies.

In short, according to Hauck, “metadata dramatically improves the search capabilities of AI. We are doing things with semantic search and AI search to be able to carve out results that are profoundly impactful.” It overlays “foundational GenAI capabilities into NetDocuments.”

But Isn’t This Old School?

But Hauck posed the question that was running through my mind, especially after attending some recent user conferences: “Isn’t this old school? Aren’t there amazing tools that already can handle unstructured data?”

Hauck says, no, there aren’t a lot of tools that can do that, at least quickly. With AI Profile, “You can formulate a generic search and then use complex metadata to look for something specific like a certain kind of agreement of a certain deal value.” You can do things like determining how many times a lawyer has done a certain task, which is valuable for things like RFPs and bringing the right expertise to the table. Without profiling, Hauck says AI tools can’t do that accurately and quickly.

Using the filtered metadata is also important for security: it would enable users to find and ensure the protection of documents containing, say, personally identifiable information or personal health records and place those documents in secure folders.

NetDocuments’ Future

I don’t know if AI Profile will do what Baxter and Hauck say it will. I don’t know if other companies that offer AI tools that work on internal and external data can intrude on the document management space and take over that function. I don’t know if someday NetDocuments will be acquired by a company that offers AI tools for external data to catch up with competition. Or if NetDocuments might become the acquirer.

But what I can tell you is that tech companies that are laser focused on one thing typically do it well because of that focus. NetDocuments isn’t trying to take over the legal tech world. As Baxter put it, “We’re not going to deliver every capability from the business of law to the practice of law.”

What it is doing is trying to solve frustration points in document retention and management. It’s trying to help lawyers and legal professionals use their documents and internal content in new and valuable ways. Hauck told me NetDocuments wants “to give them the ability to access content at the right moment in the right way. With AI capabilities that are built into the experience,” instead of being the experience like others seem to want to do. Baxter added, “We believe there is still this world where meeting users where they are is valuable.”

So, I can’t answer whether NetDocuments can remain a player by offering a document management product, as comprehensive as it is, especially when we may be approaching the era of tech Walmarts. But its credibility and history of offering good products makes it a valued and trusted partner to many law firms.

And that fact alone may sustain it for the time being, even as other vendors promise products that can do more across various disciplines.

Stephen Embry is a lawyer, speaker, blogger, and writer. He publishes TechLaw Crossroads, a blog devoted to the examination of the tension between technology, the law, and the practice of law.

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