The era of big data presents opportunities across industries, though the legal profession has been, on the whole, slow to embrace this new business paradigm. From industry to personal data, the ability of sophisticated software and AI to make sense of both broad and deep data sets is revolutionizing the way law firms do business. Nevertheless, it is clear that big data is suddenly becoming far more popular in the legal sector. The legal analytics market was worth $644 million in 2019 and is projected to be worth over $3.2 billion by 2025. This translates to an annual growth rate of 31.25%.
Law firms that fail to position themselves on, and ideally ahead of the curve in this new stage of the information age do themselves and their clients a great disservice. With that in mind, below are some of the various ways that law firms can better use the data they collect and have available to them.
Cost-Benefit Analysis
Legal data analytics is an important part of being able to perform cost-benefit analyses of a given course of action, especially ones pertaining to litigation or settlement. Some data, including the outcomes of prior cases, the number of judgements and settlements more broadly, and the costs associated with similar courses of action, can help firms answer important ROI questions when deciding how to proceed with clients and cases.
Data can also be used to determine whether it makes sense to take on certain clients, given a specific set of client demands and requirements, including how much work will be non-billable.
Industry Data
Industry data is the information that is gathered by third parties to isolate the various trends and patterns that can be observed through the industry. Law firms can use this type of data to help target and market to new clients and give themselves a competitive edge against other firms in the same niche or geographical area.
Industry data can be used to inform content and content marketing strategies, how and where to look for new clients, which changes to prepare for and leverage, and where the strength, opportunities, weaknesses and threats are coming from. Having good industry data also helps inform the kinds of topics of discussion that law firms can engage with on their blog and through their social media channels, establishing themselves as go-to sources of information for industry news and insight.
Individual Data
Individual data is that which is collected from places such as Google Analytics and from the way in which people engage with website landing pages; how they respond to email marketing campaigns, and what kind of data can be gleaned about site visitor behavior using cookies. This is data that can then be leveraged to improve website performance, improve ranking in search engines, tweak content to resonate more with a particular audience and to track the paths that visitors take throughout a firm’s website.
Internal Data
Internal data is that which is collected from operations, including client billing, employee time tracking, and client lifecycle information in order to better understand things like non-billable vs billable hours and where workflow bottlenecks arise. It can also help law firms make improvements to their customer service, employee training and retention, budgeting and project management task prioritization. Collecting and synthesizing internal data can have an outsized impact on firm profitability and cost management.
Probability Questions
Data can also be gathered from outside sources and databases and compared against a firm’s historical success and fail rate to answer questions such as will a motion pass or fail? Because the past is a reliable predictor of future events, firms can look at the success rate of particular motions filed before the same judge to determine their odds. Legal researchers and paralegals can pour over documents for days trying to come to this conclusion, or software and AI can do it in a matter of seconds.
Conclusion
Generating data is the easy part of the information age; it is what a firm does with it that matters. Law firms have a wealth of data at their disposal with which to make important strategic decisions and improve the way they attract, engage with and satisfy their clients. Whether to perform a cost-benefit analysis of filing certain motions or pursuing certain legal recourse on behalf of clients; using industry data to get in front of or take advantage of new and coming trends; using individual data to improve website performance; or internal data to streamline operations, the benefits of data analysis for law firms are many.
