Why Is Law So Slow To Use Data?

“Data is the oil of the digital era,” proclaims a 2017 Economist article. Big business—especially tech giants like Alphabet (Google’s parent), Amazon, Facebook, and Apple among others– are mining data like Standard Oil processed petroleum a century before. Why is the legal industry still running on gut and instinct while the businesses it serves are propelled by data?

A recent survey by business analytics powerhouse RELX Group polled 1,000 U.S. senior executives across the health care, insurance, legal, science, banking industries as well as government. Law finished last among industries—just ahead of government—in utilizing big data in some form. Of the law firm leaders surveyed, only 44 percent said they offer employee training on big data, artificial intelligence, and machine learning. Law also lagged in its use of AI/machine learning and automation adoption.

How can a trillion-dollar global industry that serves the largest, most tech-savvy businesses remain a data wasteland in the digital era?  Short answer: legal culture and the myth of lawyer exceptionalism; law’s traditional labor-intensive, leveraged approach that supports the traditional partnership model, sustains profit-per-partner, and is the cornerstone of its resistance to change; a growing misalignment with business, especially its reliance on data; limited investment; and law’s spurious correlation between data and confidentiality (for an extreme example of this, see the recent French Government ban on the publication of statistical information about judges’ decisions that carries a five-year prison sentence for violation). No matter the source of law’s resistance to data, legal consumers– especially corporate ones– are increasingly demanding that legal providers base their recommendations on data, not hunch. Their counsel must also be proactive, predictive, holistic in assessing risk factors, fastdifferentiated, and cost-effective. Data is crucial to satisfying clients’ mandate.

Why Data Matters

Today In: Industry

Data is critical to rapid, informed decision making. It is essential to to understanding an organization’s customers– their changing needs, threats, competition, objectives, and satisfaction. It is also essential to streamlining internal operations, proactively identifying and mitigating risks,  gauging performance and reward, and fashioning individual and collective benchmarks from which to measure and catalyze constant improvement. Data is a resource of and energy source for business. But not all data is of equal value. It must relate to relevant information and be collected and analyzed in ways that help drive rapid, fact-based decisions. This is where data and technology intersect with human analysis. This process is essential in today’s warp-speed business environment. Law has been slow to adopt data analytics, but that’s changing.

How important is data?. A McKinsey report reveals data-driven organizations are 23 times more likely to acquire customers; six times as likely to retain customers; and 19 times as likely to be profitable as a result. How valuable is data and the ability to interpret it? Salesforce just ponied up $15.3 billion to buy Tableau Software, a Seattle-based maker of tools that convert arrays of numbers into understandable charts, graphs, and maps. Tableau converts data into information that is critical to informed, rapid business decisions.

Originally published on Forbes.com

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