Law and order: How big data is professionalising the legal sector

Despite its age, the legal industry is at the forefront of the big data revolution, writes Fergus Jarvis of OC&C Strategy Consultants

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The law is one of our most ancient of professions but, perhaps surprisingly, it is also at the forefront of the big data revolution.

Law firms collect and produce thousands of briefs, memos, pleadings and legal records and increasingly they are turning to big data techniques to extract more value from that information.

Big data technology is helping to modernise legal practices, creating frameworks to make case work more efficient and allowing for a more joined-up approach for research, case workflow, pitch preparation and sales. With this in mind, here are four ways in which big data is professionalising the sector:

Algorithmic analysis of case law

As part of the research phase on a case, law firms will explore a wide range of similar cases to figure out how best to advise their clients and prepare for court. The job of searching through these precedents and evaluating their findings used to fall to junior associates and paralegals to complete.

However, classic systems such as LexisNexis and Westlaw, can automatically match cases, case approaches and judgements as required, helping firms to predict more efficiently case outcomes and tactics based on large swathes of historic data.

These processes are evolving rapidly, driving significant efficiency benefits and giving rise to products like LexisNexis’ MedMal Navigator, Verdict, Settlement Analyzer, or Lex Machina in the patent litigation arena.

Case preparation

Today, legal cases often require thousands of terabytes of data to be sifted and analysed, so the pertinent information can be extracted. E-Discovery software products can automate this process, so that expensive and highly trained lawyers can focus on analysing and interpreting a pre-sifted version of the data rather than the raw information.

According to recent OC&C research, the e-Discovery market is already worth an estimated $1 billion. Typically the Discovery phase of a case is about 15% to 20% of litigation costs, so the size of prize for companies to reduce costs is significant.

In a world where more and more cases involve vast swathes of information, this practice is becoming ever more important in developing case strategy and tactics.

Revolutionising communications

Products are being launched that collate and share up-to-the-minute updates on how cases are evolving, and converting the information into a searchable database. This ensures that, on key topics like competition law, lawyers can understand the latest case developments.

Businesses such as M-Lex or Mergermarket’s PAR are good examples of the types of businesses answering this demand. They are providing almost live updates on cases direct from the competition courts - which are searched, analysed and then used to drive decision making.

New business lines

Big data is also creating entirely new business streams for law firms. Clients are themselves trying to leverage big data within their own organisations and, given the significant reputational and financial risks associated with the misuse of datasets, there is a growing need for advice on its acceptable use and security.

This has led to some interesting diversified service provision within the legal sector. UK firm Bradford and Barthel, for example, has launched a specialist consultancy called Spherical Models to support clients as they plan how to tackle the intricacies of big data management.

What next?

Big data is opening up huge opportunities for the legal sector – but it is also raising a number of new challenges. For example, increasing efficiency could mean fewer billable hours and a threat to a law firm’s revenues.

This, and a traditional bias towards human intervention, might go some way to explaining why the sector as a whole has been reluctant to recognise, or admit, it is further ahead in big data than it realises. However big data is also an opportunity to focus on the more highly valued elements of a case.

The tools to drive efficiencies are not yet mature or widely used, and many law firms remain sceptical about the ability of programmers to properly set up systems to drive the required efficiencies.

Moving forward, law firms will be increasingly operating in an environment where the cases they are working on will involve the unravelling of huge data sets, which will require use of forensic data interpretation and, in turn, the development of whole new skills and partnerships.

In the long term, this will increase competition in the legal market – at the moment, individual expertise is key, but will become less relevant in a world where big data can level the playing field in terms of interpreting the law, particularly in less complex legal practice areas. Scalable and large teams are a key differentiator for Magic Circle firms today, but the increased adoption of smart tools will reduce this competitive advantage as the absolute scale of teams required to carry out the work will be reduced.

Inevitably, this will lead to continued competitive pricing between law firms, and those who do not adapt and embrace the benefits of big data will quickly find themselves at a competitive disadvantage.

Fergus Jarvis, partner at OC&C Strategy Consultants, leads OC&C’s information services practice and has over a decade’s experience of working with UK and international companies on a variety of data-related projects, including product and proposition development, customer segmentation and market evaluation. Fergus also works for a range of businesses, especially in the retail and service sectors, to help them identify how they can leverage big data to drive topline growth.