From firm operations and risk management to marketing and business development, legal analytics plays an essential role in the operation of a modern law firm.
Whether for the defense or the claimant, legal analytics helps optimize cases and court and judicial administration and predict outcomes. This technology can identify opportunities to reduce costs and help lawyers make decisions that will positively impact connected cases.
Many legal analytics applications will also have competencies that marry with certain business operation solutions and case/matter management requirements as well as document management and specific strategic and risk management platforms.
Different law firms — from litigation and commercial to criminal — will use the core "legal data" technology based on the legal profession they are working in and the type of case they have. For instance, most litigation and commercial law firms will use most, if not all, competencies around intellectual property and patents, competition, insurance, and employment, rarely applying legal analytics around criminal activity and family or housing law. Similarly, real estate and property outfits will not need to resource facilities and solutions that provide data science and analytics around criminal or general litigation laws, although they might consider certain expat and international laws related to real estate and marketing.
Understanding Legal Analytics
Legal analytics is the manipulation of legal data, using technology, to discover meaningful patterns and trends. The data scrutinized include case law, statutes, but most often, the data produced by litigation activities. Artificial intelligence and machine learning have greatly expanded the capabilities and applications of legal analytics. The insights gained expand the pool of knowledge that assist lawyers in reaching "determinations"—or, in other words, making decisions. The legal profession comprises a long series of determinations. And, the more sophisticated the determinations, the more competent the representation provided to the client.
Given how competitive the current expansive legal landscape has become, firms are looking for any advantage they can acquire in marketing their services. For a nonattorney law firm manager, the exercise often undertaken is applying the analytics to the operations of the various offices to discover which office is providing what services.
Lawyers especially trained in legal analytics more often assist individual lawyers and practice groups in, among other things, creating marketing strategies and predicting case status. Unsurprisingly, some firms market directly to clients' individual legal contacts and have created departments, into which related staff provide related contacts, to strategize "when" and "how" to optimize each contact.
Enhancing Law Firm Efficiency with Legal Analytics
Legal analytics is essential to legal practice management because it allows you to analyze historical case data and determine any patterns or trends. With this information, you can work backward to develop a strategy for handling cases. As a result, you will be able to more effectively plan your workflow and provide clients with an estimate of when they can expect to hear from you again.
Knowing how long something will take also allows you to better plan your time. All attorneys know that time is a precious resource that needs to be judiciously guarded.
And determining how long things will take helps you to find efficiencies elsewhere. Knowing the number of billable hours you need to work on a given day to complete a task will help you find what other tasks you should be doing. This information will help you improve because you will be able to determine what can and should be sanitized for efficiency and what needs to be bespoke.
Optimizing Legal Workflows
By identifying workflow bottlenecks, law firm efficiency improves. Whether the data analytics are based on case management, billing, or “client relationship management” data, a law firm can find out where delays might be. After that, they can improve those areas, changing their internal operations by adding people, for example.
Some have even reduced the amount of time they have a case by more than 30% – but to see changes like these, you typically have to change how you do work in a big way.
Measuring Success with Legal Metrics and KPIs
Law firms use legal key performance indicators (KPIs) to measure how well they are doing. These are the metrics the firm can track—in billable hours, client satisfaction, case results, and so on—and use to spot the good and the bad. Firms work from this to-the-point knowledge to not waste as many resources, and therefore, do not waste clients’ resources as much…and that information sells.
A firm uses its KPIs to implement an ongoing marketing strategy. It can improve what it is doing wrong, and keep up what it’s doing right, to continue to drive and (eventually, for old and new firms) build a well-known, industry-dominating brand based on positive results.
Future Trends in Legal Analytics
Emerging technologies have made a big impact on the legal profession—AI and machine learning, in particular. With these technologies, tasks that were once time-consuming, such as document review and contract analysis, now take less time. In some cases, they can be automated. Attorneys are then freed to do work that only they can actually do—the work that requires an attorney. Plus, in the very busy world of some attorneys, higher productivity levels will mean better efficiency and possibly shorter, less intemperate hours.
Legal research has begun to morph into legal analytics. With data linear and additive in nature, it is impossible to derive any deeper meaning working with it. It would be impossible to see patterns in the data. Machine learning algorithms will analyze data but will remember everything—that's how they work. As mentioned, once one algorithm learns, it is easy for another algorithm to take over. Machine learning algorithms analyze large amounts of data linearly and then discover—or learn—significant patterns. Attorneys will then use those new insights to gain new, more accurate views of the probable outcome of a case. In turn, they will base strategies on this new, pure information. By whatever single attribute is determined, case outcome is maximized.
Legal analytics can improve the efficiency of a law firm. The data can help a firm to predict case outcomes, so they need not lose time or client satisfaction with doubtful strategies. The data can help a law firm to allocate resources in a way that saves costs, but exactly meets the requirements of its clients, as the prediction goes hand in hand with larger strategic planning. Furthermore, analytics in a law firm can also save costs in that the processes will be more effective in many instances.
At the same time, when the heat is on and the business environment for law firms is threatening, staying ahead of the curve can well mean that a law firm has an opportunity to win new business. The demands of clients are of course also somewhat homogeneous; something again that even the great law firms are unlikely to declare.
Law firms still have a lot to say about many factors; true. However, legal analytics could demonstrate when the marketing headlines cannot! The hardest part of legal analytics with a view to winning new business is knowing that your metrics are absolutely spot-on as far as what is on the wish list of your most new or loyal customers!
