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Big Data: More Marketing Hype or a Legal IT Essential?

April 9, 2013

In January I posted my five key areas of focus for legal IT departments this year.  I also looked around to see what other commentators had suggested.  Big Data was everywhere and looking a little further I could see that pretty much all of the legal IT trade shows consider this as a key area for debate.

Reading a few pieces on Big Data and I was sceptical – another industry created buzzword aimed at selling product and consulting services I thought.  I was at IBM in the mid to late 80s and was supporting sales and implementation of DB2 and related relational products – the sell was that you could take unintelligible operational data, transform it and load it into understandable tables for analysis and reporting so creating competitive commercial advantage. That’s pretty much what the Big Data gurus are saying, right?

I decided to get a bit deeper into this just to see where the Big Data opportunities lie for legal firms (if indeed they exist). This post summarises my findings after trawling through a myriad of papers, articles and opinion pieces on this. 

What is Big Data?

I think most people know that it’s a term that is used to try and describe the phenomenon  that the new online, mobile, social media obsessed world is creating gazillions of bytes of data every day – Facebook has 300 million photos uploaded every day and processes 2.7 billion ‘likes’.  Also, most have heard examples of retailing organisations predicting buying patterns of customers and tailoring their marketing messages accordingly.

If you read a lot of papers you get just as many Big Data definitions. Here is mine:

Rapidly accumulating data that is too large, too raw and too unstructured to be analysed using traditional tools and techniques.

Four key characteristics:

  1. It’s about huge volumes which give statistical significance to conclusions reached from its analysis.
  2. Often it’s about getting the conclusions very quickly and applying those conclusions in almost real time – e.g. in catching fraud in financial transactions.
  3. Every shape and size of data – structured and unstructured.
  4. Ability to trust the data and the analysis from vast databases emanating from different sources and suggesting different conclusions.

What Does Big Data Mean to Law Firms?

Making an initial conclusion that the availability of this vast amount of accessible, albeit unstructured, data is indeed a new business dimension then it seems logical that there must be opportunities for all commercial organisations.

In the business world then the Big Data opportunities are generally seen to be in identifying trends (customer buying patterns and financial market movements) to help sales and marketing efforts drive revenue.  However, while big business can see great opportunities here there is an acknowledged  natural tension between these potentially huge opportunities and the legal issues surrounding privacy and security of personal data.  Naturally this is where there is a great opportunity for law firms – many are creating new practices to advise on exactly these types of issue.

So the first opportunity is unique to law firms – a new and rapidly moving aspect of the law is emerging and represents a great opportunity.  Remember that in the gold rush it was the shovel makers that got rich!

But what of the mainstream opportunities?  Law firms are commercial operations after all so what opportunities are there for them in the Big Data world?  My thoughts on some of the proposed law firm specific Big Data opportunities:

  • E-discovery is about trawling huge data sets to find the information that is needed – this is Big Data in action but is covered in so much depth elsewhere that I am not going to consider it again here.
  • As described above, retailers analyse customer data to predict buying trends – realistically law firms have orders of magnitude fewer customers and so while understanding client needs and intentions is absolutely vital, I’d call this CRM rather than Big Data.
  • Some have claimed that analysing billing data for your existing client base in order to uncover opportunities to optimise billing rates is a Big Data opportunity.  Again, my view is that traditional analytics tools do this against traditional applications and databases – smacks of jumping on the bandwagon.
  • The best I came across, which is a true exploitation of Big Data that is unique to the legal industry is to use huge volumes of historical data to predict the outcome of disputes, to craft case strategies and to predict overall costs.  This capability is in its infancy but has the capability to make a huge difference to the service a law firm can offer its clients. 

Marketing Hype or Big Opportunity?

My view now is that this is indeed different to what I was doing in the 80s but only in so much as the scale of the data is fundamentally different and the tool set just had to change – however, the goals are the same, understand stored data to drive commercial advantage.

In the legal sector the real opportunity is in supporting large corporates as they strive to seize the advantages out there without falling foul of the rapidly changing legal landscape. Law firms are quite different to large corporates and retailers and so the typical Big Data opportunities may not be there – and as always, beware the salesmen who try to wrap up their ‘old school’ analytics tools as Big Data solutions.

I really do like, however, the potential in understanding many years of case and trial data to predict the outcome of still to be heard disputes – it’s not there quite yet but is worth keeping an eye on.  If the LA Police Department can use crime data to successfully predict the time and place of ‘to be committed’ crimes then this use of Big Data to predict dispute outcomes is not so far fetched!

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