Survey: Some Lawyers View Data As Threat, Investment Growing

March 9, 2015, 8:05 PM

There’s a vast amount of speculation about how analytics is changing the legal industry, and now there’s a little bit of hard data to sift.

On Monday, the consultants at Huron Legal — which specializes in e-discovery — released a survey of 129 professionals — from corporate legal departments, law firms and government related entities — who were polled during the LegalTech New York conference in February.

The survey probed how lawyers are using new “analytics” software — programs that can harness data. For instance, some of these programs track litigation and try to predict outcomes in cases, so that lawyers can better forecast budgeting and staffing levels. There is, of course, the analytics of e-discovery, too.

The respondents’ answers were sometimes surprising:

  • Only 16 percent said analytics are being used to negotiate legal fees.

  • Only 17 percent said analytics are being used to select outside counsel and manage law firms, including things like staffing levels.

  • Less than one in four (24%) said analytics are being used for “law department management” including budgeting.

  • Only a third (33%) said analytics are being used for litigation management such as case strategy and staffing decisions.

  • One in ten respondents (10%) said data analytics is not being applied at all within their organization. That means 90 percent see it being applied.

In what may be more interesting, respondents were asked about the challenges to implementing analytics:

  • Almost one in ten (9%) cited the “threat to the practice of law.”

  • The same percent cited “lack of accessible data.”

  • The “quality of data” was cited as a challenge by 22%

  • The cost of effective implementation was cited by 23%

  • The kicker: 37 percent of respondents cited a lack of leadership, agreeing “that the biggest challenge to effectively implement legal data analytics in organizational decision making is securing buy-in from senior leadership on the value of analytics.”

In a multiple choice section about the benefits of using analytics:

  • Almost half (45%) selected cost management and savings.

  • Almost a third selected “improved decision making.”

  • 13 percent said better predictive outcomes, meaning spending amounts or litigation outcomes.

  • 11 percent noted risk management.

And then there were the not so surprising at all answers:

  • 64 percent said analytics are being used in e-discovery.

  • Only 8 percent said they believe the legal industry is ahead of other industries in using analytics, while 64 percent said behind other industries.

  • 68 percent said they expect legal spending to increase in the next two years.

The survey was conducted at Huron’s booth during the February conference. Nathalie Hofman, managing director of Huron Legal, said both law firms and corporate legal departments are adopting new technology in this area at the same pace. “I do see them as neck and neck in learning about these new technologies,” said Hofman.

Daniel Martin Katz, an associate professor of law at Michigan State University who studies analytics and is also an entrepreneur in this area, predicted law firms would soon be adopting more technology.

“The legal industry looks a lot like finance did 30 years ago when human judgement was the centerpiece,” said Katz. “Now, quants dominate finance.”

Click below to view an infographic on the analytics survey byHuron Consulting Group

[Image “What are the challenges to effectively implement data analytics_4" (src=https://bol.bna.com/wp-content/uploads/2015/03/What-are-the-challenges-to-effectively-implement-data-analytics_4-230x130.jpg)]

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