My approach to legal technology has always been informed, in this order, by what lawyers need to practice, by business considerations, and lastly by the technology itself. Recently, I was thinking of some maxims and catch phrases when I realized that many apply to strategic legal technology. So, I am starting an occasional post called “Maxim of the Day.”

When I first studied litigation risk analysis (for more info, see Marc Victor’s Web site) I learned “to distinguish good decisions from good outcomes.” This seems surprisingly simple. Yet many seem not to understand the difference.

You have to evaluate the quality of a decision based on the information available at the time you made it. Not all good decisions result in good outcomes. If a good decision leads to a bad outcome, that does not mean the decision was bad. Similarly, achieving a good outcome does not necessarily mean you made a good decision. The decision may have been bad and you merely got lucky.

One legal technology example concerns whether and when to invest in building a database to manage and analyze documents. Many litigators postpone too long the decision to build a document database, thinking the case may settle or there may not be that many relevant documents. Both may be true but in my experience, not building the database is usually a bad decision. That’s because usually there are a lot of documents and usually cases don’t settle before a significant amount of discovery. On average therefore, I have found that it pays to build databases relatively early in a case.

Of course, there will be times that a litigator decides not to and the case settles soon thereafter. While it may seem that money has been saved, that does not make the decision good, it just means luck saved time and money. Against these “lucky” outcomes one must balance the cases where lawyers or paralegals wastefully spend hundred or thousands of hours manually reviewing documents – with few controls over the process – because there is no database to cull the documents and record lawyer comments and designations of privilege, responsiveness, or issues.

I have a personal example as well. In the early 1990s when I was at Wilmer, Cutler & Pickering, I ordered 10 copies of Lotus Improv, taking advantage of a new product introductory offer. Improv was a “revolutionary” spreadsheet that allowed entering formulas in an easier way and allowed easy data slicing and dicing. I was convinced that if I had the copies in hand, I would find lawyers who would want to use the product. Before I could proselytize and demo its advantages, Excel started gaining market share rapidly over Lotus. And then Microsoft put “Pivot Table” features in Excel, which replicated many of Improv’s innovative features. We soon switched the whole firm to Excel from Lotus 1-2-3 and the copies of Improv I had ordered were “wasted.” I like to think that decision was good, but just had a bad outcome. At the time I ordered them, there was no way to know what would happen with Excel.

The more general moral here is that legal technology managers and strategists as well as their bosses – executive directors, COOs, and managing partners – need to understand that not all decisions work out well. And not all good outcomes are the result of good decisions.