Why Big Data is a Big Deal for the Legal Industry

The use of big data may transform the way law firms and legal departments conduct business

During the pandemic, many legal leaders became hyper aware of weaknesses in their organizations’ use of technology. Even “Big Law'' trails behind many other industries in using big data and other emerging technologies.

According to a recent survey of “300 of the world’s top law firms” by the London-based publication The Layer and software solutions provider Intapp, 90% of lawyers surveyed believe in “using data driven insight” in their operations, but only 16% actually reported doing so.

Here is why big data represents a strategic opportunity in today's legal industry and some tips on harnessing it in the practice of law. 

Big data: A brief overview

The origin of the term “big data” is highly contested, but Gartner Research is credited with giving the concept an enduring definition. In a 2001 report, Gartner defined big data by using what it branded "the three Vs.” Specifically, big data “is data that contains greater variety arriving in increasing volumes and with ever-higher velocity." 

Around 2007, the infiltration of smartphones and social media into all aspects of American life facilitated data-gathering on a massive scale. Companies began trading in customer data, and for many tech startups, selling user data was the way they monetized their businesses. As processor speeds steadily increased and new users joined an expanding number of online platforms, “big” data became “ginormous” data.

Data analysis applications can mine information from many sources, including email, social media, texts, videos, and audio files. But big data is useless without the processing power to manage it and user-friendly analytics to make it accessible. 

Before the widespread adoption of supercomputers and cloud computing, businesses lacked the capacity to mine or store massive amounts of information. Big data management was the domain of computer scientists until accessible computer hardware and networking capabilities brought it mainstream. Today, entire industries would cease functioning without access to a steady stream of raw data and the analytical tools that make it useful. 

Big data use in the legal industry

The sudden need to work remotely hastened many lawyers’ move to cloud-based, paperless solutions for managing client work, billing, and research. Law firms and legal departments more widely adopted remote collaboration tools and more targeted “legaltech” products, and the pandemic hastened the transition from some older methods of managing legal operations.

Big data mining and analytics haven’t quite kept pace with these other changes and are still relatively new applications in the legal industry. But the savviest law firms have figured out how to use the experienced-based data gathered by their systems to drive productivity, reduce errors, and ensure compliance with firm standards and rules. And many are finding that data-driven decision-making can increase operational efficiencies and profitability.

  • Insights gleaned from data analysis can transform legal operations and the daily practice of law by streamlining document management with rules-based document automation tools. And powerful algorithms can ease the research and eDiscovery processes. 

  • Organizations can leverage big data to inform strategies for maintaining organizational competitiveness. For example, analytics can be used for marketing purposes; make recruitment and hiring decisions; manage a firm’s reputation and public relations efforts; and benchmark a firm against its rivals.

  • Big data management solutions driven by AI and machine learning can even provide predictive analytics that help lawyers determine which cases to take based on similar outcomes, plus aid in building case strategies.

A downside of a big data-driven world

The main reasons many lawyers give for a reluctance to embrace big data are ethical considerations and concerns for client privacy. With cyberattacks a growing menace, many legal leaders also fear the consequences of a data breach. And some legal experts believe that the risk-averse nature of many lawyers is reining in the "immense" power of legal analytics. 

A significant threat when dealing with any client data is accidental disclosure, and many organizations hesitate to risk that possibility. Nevertheless, there are IT and procedural mechanisms to handle this weakness, and many legal leaders find that the advantages of using big data outweigh the risks. 

In a 2017 article, The Economist named data “the world’s most valuable resource,” and its worth has only increased since then. As a result, legal organizations that find effective and safe ways to harness this resource may gain a competitive advantage. 

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