Analytics will define how in house counsel will hire their outside counsel. Just as Facebook mines our personal data to allow advertisers to target us with appropriate ads, companies will require firms who are interested in joining their outside counsel panels to make available all their billing and firm data to measure the firm against their competitors. The data is there to measure a firm's efficiency, responsiveness and success rate.

Consider companies getting access to all of a firm's redacted billing records to evaluate how long it takes for them to prepare for a deposition, a hearing or trial? How long it takes to draft a motion or a research memo? Also, what if companies could access all public records to see how often a firm went to trial and won? How about how often a firm argues discovery motions and wins them? What if that analysis could be done for each lawyer at a given firm?

There are companies already doing this data analysis now. The time will come that if firms want corporations as their clients they will have to turn over reams of data to them and third parties who will mine the data, analyze it, compare it to the data of other firms, give the firm a rating based on the data and make a data driven decision whether to hire the firm, and if so, which attorneys at the firm to hire and handle their matters.

Right now, many clients rely on recommendations from their peers. They're looking for counsel to handle a given matter in a given jurisdiction, and they'll ask their colleagues whom they recommend and why. It's an imperfect and subjective way to choose counsel. The recommendation may be based on incomplete and imperfect information. And if the decision goes south, the in house counsel who hired the outside firm may have to answer to her CEO and the company's board for a runaway verdict.

A data-driven decision, however, is more likely to produce a more scientific result and also provides more cover for the in house counsel pulling the trigger. In case of a runaway verdict, the in house counsel can rely on a stack of data to support her decision. Welcome to data-based CYA.

So what does this mean for law firms? First, efficiency and results matter. Inefficient and ineffective counsel will be identified and forced out of law firms. Firms will take the initiative and start measuring how long it takes their attorneys to complete tasks, assignments, prepare for matters and close out files. They will also measure what their attorneys settle their matters for. These internal analytics will help firms ensure their team is equipped with the best. This exercise will also identify which attorneys are the best at their jobs and those attorneys will be asked to reduce their process to writing and to teach other lawyers at their firms how to be both more effective and more efficient.

This reductionism of the practice will aid less experienced lawyers to better serve their clients. In fact, some firms may reduce this skill set to a reproducible process that, through the assistance of artificial intelligence, may be sold as applications to other firms to help them secure and keep more clients. And why would any firm share its practice secrets? Because the real money to be made by firms in the future is through creating and selling legal technology, not the billable hour.

Getting back to analytics, for this plan to work for companies there has to be (1) data; (2) access to data; and (3) algorithms to evaluate the data. Firms have the data. Many firms will make that data, minus any privileged information, available, in return for being considered as outside counsel. Once a client or a third party has the data, the proper algorithms will flesh out which firms are best suited for their matters. This is all just a matter of time. Welcome to a brave new world of the practice of law.

 

The Future of Law is a new monthly column by Frank Ramos, the Managing Partner at Clarke Silverglate, a commercial litigation firm in Miami. You can e-mail him at [email protected] or follow him on LinkedIn, where you can download five of his law-related books for free and read his daily practice tips.