If you have heard players like Joe Satriani or Alan Holdsworth, then you have witnessed truly breathtaking legato technique (better known as hammer-os and pull-offs). Having good legato technique will help balance out your picking technique. When you want that aggressive, in-your-face sound, then stick to your picking technique, but if you want to play smooth, and fluidly, then legato technique is what you want.
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This exercise is similar to the previous one. This time we are complicating matters by throwing in the alternating E and D notes on the E and B string, respectively (i.e. notes 6 and 7 in the exercise), which disrupt the legato motion. This is a very common type of riff when it comes to legato.
Make sure that you make smooth transitions between the picked notes and the hammer-ons and pull-offs. That's all I have to say about this one. Get to it!