(Left to right) Ralph Baxter, co-host of Law Technology Now; Karl Harris, CEO of Lex Machina; Jae Um, director of pricing strategy at Baker McKenzie; and Mark Smolik, chief legal and compliance officer at DHL Supply Chain speaking at Legalweek at the New York Hilton Midtown. Photo: Daniel Clark/ALM

Companies have more data on hand than ever before. Learning how to use and analyze that data can help general counsel show their value to the C-suite.

In-house counsel and legal experts discussed the collection and analysis of data on a panel titled "Data Analytics From the Top Down: What GCs, Law Firm Leaders and the C-Suite Should Know About Data Analytics" at ALM's annual Legalweek conference at the New York Hilton Midtown on Wednesday.

Mark Smolik, the chief legal and compliance officer at DHL Supply Chain in Westerville, Ohio, said when he first started at DHL the company was outsourcing too much work to law firms.

"My initial reaction when I came to the organization was 'We have a broken model,'" Smolik said. "Twenty percent of our costs were internal and 80% were external."

Smolik said he worked with a finance team to look at the matters that were being completed by the legal department and the matters law firms were handling. He ultimately decided to bring commodity work, procurement contracts and commercial real estate to the in-house legal team at DHL.

"The visibility of that data wasn't any innovative way of thinking it was just thinking of whether we can do things better, faster and cheaper," Smolik said. "Surely we can so we brought that work in-house."

Data is the most valuable, Smolik said, when he shows business leaders how the legal department is creating value to the organization as a whole.

"Where law departments are going is, more likely than not, hiring businesspeople to lead that law department who happen to have law degrees," Smolik said.

Legal leaders who want to begin using data to find ways to create value should take a top-down approach. Jae Um, pricing director at Baker McKenzie in New York, said leaders of legal departments and law firms should take an "appreciative inquiry" when analyzing data.

"Data is not magic. It is work. It costs time and money and there is risk involved," Um said.

Taking a bottom-up approach when analyzing data can be "perilous and time-consuming," she said, adding that it's easy to spend too much time analyzing the wrong data sets.

"One of the problems that we can't see is one of data sufficiency," Um said. "We do have a lot of data, but when you frame up the problem that you're trying to solve sometimes you don't have all of the data you need to solve that particular problem."

Um noted the best approach is beginning at a point of how the analysis will work and contemplating what information is needed to complete the analysis.