To understand more about the role of data science in law, I turned to LexPredict, a company specializing in legal data analytics. Three of its principals, Dan Katz, Mike Bommarito, and Andrew Baker collaborated to answer the questions I posed.

One reason I wanted to conduct this interview is to encourage readers to participate in a data science survey that LexPredict is conducting. See their blog post for details and a link to take the survey.


Ron: What is data science and why is it important to law firms?

LexPredict: In the broadest sense, data science encompasses the use of various analytical techniques to better understand, diagnose, forecast, and predict business outcomes. Data science is a somewhat new concept for the legal industry, but it’s an active and, indeed, “hot” field within many other sectors of the economy. Virtually every industry now collects more data about what they do and how they do it than ever before. This increase in data collection extends beyond business and into our personal and consumer lives, further shaping expectations at an individual level. On the whole, this increase in data is opening the doors to new and more valuable applied mathematics and statistics.


Why is this important to law firms?

First, the world is becoming increasingly quantified. The legal industry is not immune from that trend, though it lags most other industries. As data stores in our sector grow, so will the latent value within that collected data. Law firms that do not collect and analyze the right data will leave a great deal on the table, missing out on opportunities to improve the client experience, to mitigate risk, and to maximize their profits.

Further, clients take this space seriously. Some progressive corporate legal teams have created formal roles for legal data scientists. We are even working with legal and risk teams to invest in data strategies and new techniques to harness value from this data. We believe that law firms will find themselves in a precarious position if they don’t invest in areas that are congruent with client interest and needs.

So, whether by strategy or gravity, firms will end up needing some command in this space.

Law firms that do not collect and analyze the right data will leave a great deal on the table


Where are law firms and law departments today on it?

The legal industry is in a very early state. Most law firm or corporate legal department leaders we work with now acknowledge the importance of better (and more thoughtful) data capture and analysis. Most of these leaders also understand that focus in this area should extend beyond mere financial data and include the capture of new and relevant data about the practice of law.

When comparing the two, corporate legal departments are ahead of law firms. In-house teams have amassed more data in corporate systems. As they rollout new (or revamped) case management, contract management, and docketing systems, corporate legal departments more often do so with an eye toward progressive downstream uses of data.

For law firms, outside of a few pioneers, most are focused on modernizing reporting. Or, in some cases, they have specific clients driving activity. Strategic, systematic investment has been limited. For instance, we’re not aware of any firm that systematically tracks outcome and settlement data for all its litigation work. We’re not saying there isn’t one out there, but we’ve only see that type of discipline and forethought at the sub-practice or key account level. We view that type of outcome tracking as fundamental to future data efforts. Law firms without outcome data are like basketball teams that don’t keep score. That’s just one simple illustration of where the market is. The “big data,” “data analytics,” and “predictive analytics” set of topics are, however, starting inch up the priority lists of law firm leadership. Most firms appear to be in planning stages. Deep work is still rather rare.

Law firms without outcome data are like basketball teams that don’t keep score


How do they compare to other markets?

The legal industry lags most other sectors. There are a variety of factors at play here, including the facts that:

  • Data collection has been limited (especially for law firms), so latent opportunities haven’t been as clear;
  • Few lawyers have quantitative/science backgrounds, so they are less appreciative of the value of data and haven’t properly conditioned their “data muscles;”
  • The legal industry is fractured and there is a lot of heterogeneity in the work undertaken at the large firm or corporate legal department levels (they aren’t making widgets); and
  • Up to this point, most systems that collect data have offered user experiences that have been less-than-ideal, blunting adoption in some cases.

The landscape is changing, however. We’re seeing that first hand.


Why has data science become big in last few years?

There is a mix of reasons. First, the amount of data being collected has exploded, and the costs of storage continue to decrease. The opportunities to apply data science continue to grow as the volume of data on-hand grows. Further, the work from these efforts continues to bring value to companies who invest, so the momentum behind these efforts continues to increase.

Second, our consumer lives continuously shape our expectations in this area. Fitbits, Apple Watches, and IOT-connected devices show how data can be collected and provide value. It’s difficult for consumers to be content with the practice of law in its current state while they simultaneously watch the world evolve in their personal lives. Corporate legal teams, in particular, realize this more and more.

the amount of data being collected has exploded


Where is the bigger opportunity in the corporate legal market today: law departments or law firms?

It’s hard to say where the “bigger” opportunity resides. They’re both big, but the opportunities are different for buyer and seller of services.

For firms, we believe that those who invest with purpose now can break from the pack and get ahead. But “purpose” is the operative term there. Firms need a data strategy and they need to understand what data to curate, for what matter type, and how to utilize that data to its fullest extent. Proper appreciation for and collection of data helps position the organization for artificial intelligence (or the other A.I., “augmented intelligence”) and advanced analytics. Firms can win more work and execute on that work more profitably if they can even marginally improve their quality, their ability to reduce risks, their costs, and the experience they provide their clients. The bar is low and firms can, for a limited time, stand out in relation to their peers.

In-house teams have a different set of opportunities. Pressure from the business is not going away, and other areas of the business will continue to invest in data. In order to meet the business where it is today and to position the department for the future, corporate legal must take quantification and analytics seriously. We believe that practical data strategies, advanced analytical capabilities, and data scientists will be table stakes in the years ahead. The right use of data can help the department better understand, respond to, and communicate risk, control costs, and stay ahead of emerging trends or issues. This last point is critical: organizations that can better diagnose legal issues and anticipate risky activities can respond to potential litigation and compliance issues before they come to a head. We also think in-house teams can and should demand more from their outside counsel in this area, and we’re beginning to see expectations change on the margins.

The right use of data can help the department better understand, respond to, and communicate risk, control costs, and stay ahead of emerging trends or issues


It sounds like it’s early days for data science in legal. Do you have any good anecdotes of success you can share?

It is early, but we have seen some encouraging work in the market. For firms, we’ve seen savvy use of data visualization to engage partners and help them more effectively manage their work. We’ve seen a few leaders use greater transparency and visuals to win new work and engage clients along new dimensions. We’ve seen thoughtful models and analysis enable partners to more appropriately price their matters and manage teams. And, we’ve seen some teams move the conversation with their clients from effort-oriented metrics to quality- and outcome-oriented reporting. Those are all big wins from reasonable investments.

On the corporate legal team side, we’ve seen groups clean and aggregate data from multiple systems to speed reporting. We’ve seen leaders set up data models and reports that are tailored to specific business units and executive stakeholders for added awareness and transparency. We’ve seen groups use analytics to “sort” or “triage” matters by risk to enhance the sourcing of work. We are seeing some interesting work around reserve setting and using data to more accurately drive those reserves. We’ve seen some pioneers create models to forecast and predict spend and outcome on matters.

That’s rather rapid fire, but the successes are beginning to emerge.

We’ve seen groups use analytics to “sort” or “triage” matters by risk to enhance the sourcing of work and …  interesting work around reserve setting and using data to more accurately drive those reserves


Tell me more about the data science survey LexPredict is conducting and why law firms should participate.

We feel the industry currently lacks the right benchmarks related to data usage and data analytics. Our three-question survey is designed to begin to measure where the industry is. We plan to significantly deepen and broaden the questions we ask in the years ahead, but we wanted to start in a simple manner. Further, while we believe we have a sense of where the market will go in this space, we don’t claim to have all the answers. We’re looking for feedback and ideas as our survey evolves.

Individual responses will be kept confidential, and the answers will be aggregated and projected back to the market. We will also include our commentary of the market in our report. This type of research and analysis is a part of our DNA. We are a data-focused company, after all.


Thanks very much for the great answers.

I close with an illustration of and link to some of LexPredicts best known work, predicting US Supreme Court outcomes:

LexPredict predicts US Supreme Court outcomes


[Disclosure: Fireman & Company, in which I am a partner, and LexPredict work together from time to time.]