Developing a tool in-house and licensing it out

Cisco System’s law department invested $1.5 million in a “discovery lab” that has helped it find, store, and handle documents that might be subject to discovery. (ABA Journal, Sept. 2005 at pg. 57). That investment, plus $900,000 spent in responding to discovery requests in a recent case, let Cisco avoid a proposed vendor cost of $9 million to set up a discovery database – a 10:1 savings that fully amortized the investment costs.

If the savings are anywhere in that stratospheric range, might Cisco license its tool to other law departments, or even spin off and run such a cost-saver for other corporate defendants?

I am reminded of Equitable Life, which paid the costs of developing CompInfo’s LawPack in return for some license fees paid CompInfo thereafter. Likewise, the matter management system developed at Unisys became the starting system for TriPoint.