The use of data analytics is becoming more prevalent in the current business landscape. Legal department business models are changing. They're operating more like business units within the corporation and are expected to be high performing and successful. Many now have legal operations officers tasked with driving peak performance that is, increasing efficiencies and adding value to the company while driving down costs. General Counsel, specifically, increasingly play a strategic role in advising executive team and board decisions, proactively participating information governance and compliance initiatives, along with managing legal risk. In addition to these areas of responsibility, general counsel are evolving their roles to encompass other areas, such as corporate governance, enterprise risk and even IT and cyber security risk.
Legal departments have a much wider purview than ever before, and the expectation is that the legal function can bring additional insights to strategic decisions. Retailers make use of the technology to analyze customer purchases looking for buying trends, while credit card companies use it to analyze incoming transactions looking for fraud. The information gleaned from data analytics gives organizations more confidence during the decision-making process, which can lead to improved operational efficiency, cost reductions and reduced risk. In-house counsel not exempt from this trend and are beginning to make use of data analytics, and the technology is expected to have a significant impact in the future service legal departments provide to an organization.
e-Discovery: Most legal departments that currently make use of data analytics use it for e Discovery. The technology allows companies to sort through vast quantities of documents, selecting those most likely to be applicable to discovery requests. As a result, documents are more organized and the review process more efficient and more cost-effective.
Legal Strategies: In-house teams also use data analytics to assess the effectiveness of different legal strategies. When used for this purpose, the technology evaluates possible outcomes of those strategies, based on venue, adjudicator, opposing counsel and other factors. The analysis can help department's advice their organizations on how aggressively to pursue a claim or whether it's more beneficial to reach a settlement without going to trial.
Data Governance: Similarly, data analytics can be used to better manage the information retained within a company. This can include developing policies relating to how long an organization should retain electronic information, or whether some information is no longer pertinent. It can also be useful in improving records management capabilities via automatic content categorization.
Contract Review: Contract review is another are where in-house teams can make use of data analytics, which can scan through a proposed contract, identifying discrepancies, as well as potential problem clauses that could negatively impact an organization after the fact. Traditionally, this process would have to be done by an attorney and would be time-consuming but by using data analytics, the process can be completed in a fraction of the time at a much lower cost.
Synergy with External Advice: The reach of data analytics can extend outside the realm of what in-house teams handle internally. Whether driven by client demands or internal initiative, law firms are also starting to make use of data analytics as more attorneys are becoming exposed to the technology and its benefits.
This presents an opportunity for in-house teams to have a measure of synergy with firms retained by their organization. If the legal department utilizes compatible process and systems as outside counsel, it can lead to better communication and transfer of information, which can lead to better results for the organization overall.
General Counsel and legal operations officers understand that access to meaningful metrics and business intelligence is a key component to managing spend and risk. Getting there shouldn't be so difficult. When properly designed and supported by experienced professionals, legal departments can enhance efficiencies, better align cross-functionally and help propel the organization forward with data-driven insights.