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The data-driven consumer experience has arrived for legal services: trends powering the change

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REUTERS/Mike Blake

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November 22, 2021 - As McKinsey aptly stated in 2016 we are in "the age of analytics: competing in a data driven world." There is no better evidence of this than in our daily consumer experiences.

Amazon recommends what sneakers you should buy based on your purchasing history. The app from your favorite grocery store auto-creates a digital grocery list for your online order. Lyft, Blue Apron and Airbnb ask you to rate your experience after each purchase to improve the customer experience.

Legal is not immune from this data-driven trend, as evidenced by the crowded market of legal tech providers striving to create the perfect combination of data and tech to provide the "Amazon" experience. As we sharpen our focus on the impact of data in legal, what we have come to know in our personal lives will soon enough be the new normal in the legal profession. Here are the trends powering that change.

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Legal technologies are full of valuable data. The legal tech market, which is expected to reach $2.49 billion in revenue by 2025 , is a rich source of data for the legal function.

There are entire categories of legal tech designed to mine public and company data for the legal department, including litigation analytics (Westlaw Edge, Lex Machina), market intelligence (What's Market, Pitchbook) and operational and negotiation data on contracts (Ironclad, Icertis, Eigen, Blackboiler, Draftwise).

The availability of APIs (application programming interfaces) is also increasing. They provide legal departments with access to the "mountains of legal data being generated every day" , Through APIs, robust, external data sources and applications can be combined with legal department data to, among other things, spot how trends in the market are impacting the frequency of litigation, contractual preferences of customers and market deal terms.

Legal departments are taking control of their data. It is no secret that the legal function is sitting on a "vast, untapped gold mine of data" .

Historically, much of the matter and deal data needed to derive insights was not in the possession of the law department, but instead dispersed across law firms, unstructured and inaccessible. Today there are tools — like HighQ, Brightflag Workspace, M365, Evisort, Onit, Legal Tracker, SimpleLegal and more — that provide mechanisms for legal departments to access matter and deal data, along with precedent and historical advice, from their counsel. (Editor’s note: Westlaw Edge and HighQ are products of Thomson Reuters, which also owns the Reuters Legal News and Westlaw Today platforms.)

With tools like Priori Scout and Marketplace, legal departments are also tapping into internal and external data sources to capture more robust data about their outside counsel — including specific experience and diversity metrics — and deepen their relationships.

This trend of technology shifting data to the control of legal departments is key. As companies prioritize data strategy and the creation of data lakes -- central repositories for storing structured and unstructured data at scale – they must first have control of their data. And the better the internal data, the more powerful it is when combined with market data.

Data is alive in images, not numbers. With more robust data now available, market leaders are focused on bringing data to life for their teams and their customers. Whether in the boardroom or the courtroom, tools like PowerBI and Tableau are being used to visualize legal advice and business intelligence.

What was once shared in written reports can now be conveyed through interactive dashboards, maps and more. For instance, dashboards and interactive platforms allow legal departments to guide employees through trade secret requirements and provide graphical representations of trends across offices, business units and competitors. Meanwhile, business leaders access regulatory heatmaps maintained by the legal department that allow the business to see the real-time regulatory climate in target jurisdictions.

Service providers are also enhancing the visual components of their offerings through development and technology. In 2019, Salesforce acquired Tableau to further its mission to "help more people than ever see and understand data". Most recently, Westlaw enhanced Practical Law with Dynamic Tool Set, which layers visualization onto existing content to help users navigate and discover information in new ways.

As data grows, so do data-focused roles. As the volume of legal data grows, so too does the role of data professionals within the legal ecosystem.

In 2020, the number of organizations with a dedicated legal operations function jumped from 57 to 81 percent. Data analytics, including capturing and mining data to support the business and strategy, is one of the key responsibilities of most legal operations departments, following only project management in CLOC's State of the Industry Survey.

Legal departments are also investing an estimated 30 percent more in data scientists and new roles are growing. McKinsey estimates that demand for "data translators"— who bridge the gap between traditional data scientists and business stakeholders — is expected to reach 2 to 4 million in the United States by 2026. These roles will bring the discipline and skills needed to improve data collection, analysis and decision-making within legal and the business.

The deliverable has changed forever. Just as handwritten drafts on yellow notepads are a relic of the past, so too is legal advice devoid of market insights and packaged in long memoranda.

Today the market values insights drawn from legal and market data, delivered with visual images, and derived from work by lawyers and data specialists. As this approach continues to gain momentum, we will see legal departments capturing even more data, additional tools hitting the market and more opportunities for data-driven change in the profession.

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Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias. Westlaw Today is owned by Thomson Reuters and operates independently of Reuters News.

Wendy Butler Curtis is Orrick's Chief Innovation Officer and can be reached at wcurtis@orrick.com. She works in the firm's Washington, D.C. office.

Kate Orr is Senior Innovation Counsel at Orrick and can be reached at korr@orrick.com. She works in the firm's Washington, D.C. office.

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