Big Data Will Disrupt Law Firms Too

A staggering amount of data is created every day — 90% in the past two years alone. Technological developments in machine learning, artificial intelligence (AI), augmented reality (AR) and big data are converging and present unprecedented opportunities across all industries.

The legal industry is no exception, and its quantitative revolution may just represent the future of data among B2b professional services organizations. Data is reshaping people, process and technology, and the firms that best manage this transition will carry the competitive advantage.

Ready Or Not, Big Data Is Here

The water cooler discussion around big data’s impact often focuses on the macro effects of the internet on business. Pundits love to predict how one model or another will be Uber-ized into the halls of the less innovative. The CEO of bitcoin startup 21.co and Andreeson Horowitz Board Partner Balaji Srinivasan summed it up recently:

His quote underscores what’s happening to the vendors supplying tools and technologies to law firms. With big data underpinning their offerings, companies like Ravel Law, Legalist and Free Patents Online (FPO) are moving massive amounts of information online to be parsed and analyzed to achieve better business outcomes.

By 2017, Ravel Law hopes to have all of Harvard Law School’s US case law library online and accessible for free. For its part, FPO provides a free repository of millions of patents from a number of countries, updated with thousands of new ones every week.

Recently, Legalist emerged with a goal of being the “Google for state court records.” By aggregating all state databases into one, Legalist creates opportunities for new applications and ways of leveraging intelligence. At the very least, its automated alerts about case law and court record changes save attorneys billable hours.

Looking ahead, it’s easy to see the evolution of big data within these services. As data sets improve and mining techniques become more sophisticated, predictive analytics will become par. Users will be able to move beyond the “freemium” tier in terms of platform features. To law firms, this could mean the difference between acquiring a new client or losing one.

A Technology Upgrade — For Good This Time

Writing in the Wall Street Journal, author Michael S. Malone cites recent data from consultancy NewVantage Partners that shows the rise of big data in the commercial sector:

U.S. firms using big data in the past three years has jumped 58 percentage points to 63% penetration — while 70% of firms now say that big data is of critical importance to their firms, an astounding jump from 21% in 2012. That’s one of the fastest tech-adoption rates ever.

With such rapid adoption, chief data officers and IT heads don’t have the luxury of a wait-and-see approach. The client’s speed of business will in turn set the pace as law firms engage with companies across every sector. Just like the office productivity and collaboration tools before them, emerging technologies driven by big data will change the way law firms work.

For one, big data will unbound law firms from siloed information or proprietary databases. That doesn’t mean the WestLaws and LexisNexises of the world are going away. It means firms will finally have access to other data sets that will allow them to tailor their information around work processes. The law firm of the future will understand the importance of blending third-party data with its own.

Second, infrastructure — the underlying technology required to run a firm’s systems and processes — will have to upgrade in order to support newer applications and processing requirements. Data visualization is a prime example. As machines evolve to crunch huge amounts of data in real time in order to produce visually appealing and easily understood results, older operating systems face obsolescence. This doesn’t mean the nuts and bolts of running a firm will go away, just that they will change and big data will help drive that change.

Does More Data Mean Fewer People?

One by-product of bigger data and better processes is automation, which has grabbed its share of headlines within the legal industry. Futurists and journalists have long marked law clerks and paralegals for pasture — the robots and algorithms will prevail! The data, however, tell a different story.

In The Economist’s special report on artificial intelligence, the number of legal clerks in America actually increased by 1.1% a year between 2000 and 2013, concurrent with an increased demand for automation.

As in many other industries, data-driven processes are eliminating routine tasks and making way for larger innovations. That doesn’t mean the end of these traditional positions. Law firms will simply need to adapt roles and responsibilities to reflect these new skill sets and disciplines.

In a Raconteur piece on the legal sector, Milos Kresojevic, enterprise architect at Freshfields, describes the current environment. “There will be a shift in the skills required to leverage the productivity potential of new, smart technologies,” he says, “with an increased emphasis on cross-disciplinary engineering and scientific skills and the ability to adapt to a workplace that is staffed by people and machines.”

Professor Richard Susskind, a legal futurist, predicts a more aggressive level of disruption in a 2015 Financial Times report. “The threat — or opportunity, depending on your standpoint — to the profession comes from recent developments in this technology,” he says, citing companies like Google that are developing AI that can make independent decisions based on its own data interpretation . “This would make them able to “think” like humans. Even lawyers.”

Susskind sees a “decomposition” of the legal profession, with “traditional jack-of-all-trades” jobs morphing into more split roles — part lawyer, part engineer — more at home in a Silicon Valley startup than law firm,

Communication Skills Win Out

Whatever the final machine-to-human ratio turns out to be within law firms, there will always be a place for sound interpretation and old-fashioned communication skills. Writing in theWall Street Journal, Babson College professor Tom Davenport stresses the importance of being able to articulate what big data and analytics mean to the law firm:

The rest of the world doesn’t understand — and generally doesn’t care — what methods you used to create your analytical results, and how you handled the multi-collinearity problem in your data. It cares only what your results say about how a decision should be made or a new product should be developed.
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