14 May 2017

Legal Analytics 101

“Big Data”, “AI”, “Machine Learning”, “Data Mining” - these are commonly cited concepts when people talk and write about the future of law. But for the folks out there who want to start using data in their in-house legal practice, these concepts aren’t particularly useful.

Most law departments have a dearth of data, not a surplus.

And available data isn’t often properly identified, collected, curated and normalized. Even if analytics seem out of reach for your legal department, you can take three steps right now to get started:

  • Concentrate on the small data that you either already have or can easily collect
  • Start tracking all of your matters and transactional agreements
  • Find an effective tool for managing your data

If you do these things, you can put your department in a position to glean insight from analytics and to demonstrate value to your organization.  Read on for more details.

1. Forget about “Big Data” and concentrate on the small data that you either already have or can easily collect.

Tech Crunch recently published an article titled “Big Data Doesn’t Exist." Setting aside the clickbait headline, the crux of the piece is that “Big Data” isn’t actually that useful to most companies. Only a small portion of any “Big Data” set is actually relevant. Instead, the author argues, companies should make the most of the smaller data sets that they already have. These sentiments are especially true for corporate legal departments. While “Big Data” technically refers to data sets so large they are beyond the ability of commonly used desktop computer software to manage and process, there is plenty of insight to be gained from “PC-sized” data sets. 

Don’t worry about “Big Data." Concentrate on collecting, visualizing, and analyzing “small data." 

According to the Small Data Group (yes, that’s a thing), small data “connects people with timely, meaningful insights…  organized and packaged – often visually – to be accessible, understandable, and actionable for everyday tasks.” Wearable fitness trackers are one example of small data being used for goal setting and insights about personal health.

In a legal department,  chances are, you’re already collecting small data in some form or fashion. Whether you have a matter management system like Serengeti Tracker or just an Excel spreadsheet, you’re probably tracking invoices, overall spend, and basic information about all of your matters. This is where you want to start if you’re looking to use data to glean insights about your practice.

2. Start tracking all of your matters and agreements

If you are not already tracking your department’s work in a centralized tool, then you have some homework: this is the place to start.  Below we provide key fields to track for both matters (e.g., litigation, administrative charges, and other events) and transactional agreements (contracts).

For your matters, be sure to track basic identifying information, the matter’s duration, the matter’s outcome, and your company’s rating of the matter’s outcome. The latter two fields are especially important.

When tracking matter outcomes, you’ll want to record the disposition of each matter. This sounds basic, but you’d be surprised how many lawyers aren’t doing this.

Tracking matter outcomes can help you identify trends within your data and establish benchmarks for your performance. Additionally, you should evaluate each matter outcome, then record that evaluation as a numeric score in your tracker. Base these scores on your expertise and that of your colleagues. Initially, the score will be helpful in finding areas for improvement across your matters.  Down the line, you can use these ratings to reveal factors that tend to positively or negatively affect outcomes.

For agreements, there are many tailored contract management systems available on the market.  However, if you’re starting off in Excel, you can benefit from tracking small data as simple as basic identification, start dates and end dates,  renewal deadlines, renewal types, and obligations.

From a contract management standpoint, tracking this information in a tool that can also store and link the related documents and associate related agreements (e.g., amendments and statements of work) is preferable to a standard spreadsheet. 

Other information to track may include the company’s intellectual property assets and events that relate to their maintenance and protection.  Whatever your legal work includes, keeping track of key factors of each action can help you build a data set that you can mine for insights (and report to the business) later.

3. Find the right tool for your data

Whether you’ve already got a tool that you really like or you’re just starting to search for one, it’s helpful to know what’s out there. Below, we list three levels of options for collecting and managing your data.

Level 1: Excel. Excel is a universally accessible tool, that’s easy to use and standard for all users. If you don’t have anything else, start tracking your matters in a spreadsheet.  Learning how to place constraints on fields can help standardize the information collected, which is important when taking the step from mere collection to drawing conclusions from the data.  You can find helpful resources on how to do this here and here (video).

Level 2: Shared Database. You can also track your information using a database on your company’s intranet. If you use SharePoint to house your documents, you can work with your IT department to set up a SharePoint List, which will allow you to collect information like you would in a spreadsheet. Unlike a spreadsheet, shared databases can house all of your data in one place that can be accessed and edited by multiple people at a time.

Level 3: Online Matter Management System. Online matter management systems are among the best places for tracking your data. Because they’re mostly internet-based, you and your team can access them from anywhere at any time. Unlike intranets, matter management systems are often tailored specifically for legal work. Beyond document management, these systems often come prepopulated with many relevant fields related to jurisdictions, matter types, and financials. You can find listings that compare matter management here and here.

Big Data, AI, Machine Learning, and Data Mining will all have an important place in the legal industry, but they are not necessarily available to law departments who want to take advantage of analytics today.  The good news for those interested in gaining the benefits of data analysis is that you can begin to make use of your data right now, even without IBM’s Watson in your corporate legal department.

 

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