Proctor : May 2017
8 PROCTOR | May 2017 Legal Analytics 101 – Big data and the art of value spotting The reality of modern life is that everything we do leaves a digital footprint. Consequentially, the uptake of data analytics is empowering progressive thinkers by revealing patterns and trends in legal data that were previously imperceptible. This article discusses how Australian legal analytics start-up Jurimetrics and US-based platform Premonition have the potential to disrupt the legal profession. Legal analytics identifies patterns in ‘big data’ (compilations of data so large that they are unable to be utilised by traditional processing methods) so that lawyers can better understand the operation of the legal system and the risks associated with legal and commercial decisions.1 Legal analytics are applicable to firms and clients of all sizes and can be used to identify trends in regulatory and legal decisions, evaluate firm or counsel performance, and even critique a company’s internal corporate governance policies. However, it is not just lawyers who benefit. The ability to analyse legal data empowers clients to engage a lawyer based on measurable data such as previous successful outcomes and relevant litigation experience. 2 The big question is the application of this technology within the legal profession. The Legal Forecast recently met with Jurimetrics’ managing director Conrad Karageorge to discuss exactly this question.3 Karageorge and his team came together to found Perth-based Jurimetrics after recognising that the legal industry is formidably slow to adopt new technology. It offered them the opportunity to establish the ‘Bloomberg terminal for law’ 4 – a hub providing up-to-date data on concerns ranging from industry- specific regulatory risk to the decision-making patterns of tribunals to better inform the legal advice lawyers provide. In Karageorge’s opinion, ‘data scraping’ is akin to actual mining: “The documents are the tenements and the information is the resource you need to extract from them. Basically it means teaching a computer how to read.” 5 In this context, sophisticated data analytics has the potential to recognise the meaning by Daniel Owen, The Legal Forecast Daniel Owen is a Student Executive Committee member of The Legal Forecast. Special thanks to Milan Gandhi, Angus Murray and Chloe Bennett (The Legal Forecast) as well as Julian Barclay (Ramsden Lawyers) for technical advice and editing. Thanks to Conrad Karageorge of Jurimetrics (jurimetrics.com.au) and Toby Unwin of Premonition (premonition.ai) for their valued insights and contributions. The Legal Forecast (thelegalforecast.com) aims to advance legal practice through technology and innovation. TLF is a not-for- profit run by early career professionals passionate about disruptive thinking and access to justice. of words contained within a document rather than mere arrangement. However, Karageorge believes this technology is still a few years off.6 He warns that “judges don’t talk like humans”, which means that data analytics typically struggle. “It’s really more art than science when it gets down to that level,” he said. In the context of legal information, the recognition of patterns of meaning is exponentially more complex than the recognition of sentences and phrases. Replacing traditional metrics Although the potential applications of data analytics are endless, the central purpose of legal analytics is to uncover more effective systems and standards of measuring what is valuable to the user. In this regard, legal analytics may make traditional value indicators, such as firm branding, reputation, size and pre-existing relationships redundant and replace them with more ‘accurate’ indicators based on empirical data.7 This has created the current situation in which legal analytics start-ups (such as Jurimetrics and Premonition) are capitalising on the new ‘client-empowered’ approach. This has created a disruptive force which has resulted in traditional legal data giants LexisNexis and Westlaw also moving to adopt new analytics services.8 Choosing representation – merely a numbers game? An example of the value of data in an industry based on complex relationships is the idea that the client-lawyer relationship could be reduced to a series of statistics. In this regard, it is possible that new means of interpreting data could result in novel ways to qualify old relationships. Specifically, legal analytics has the real potential to offer the ability to make informed decisions on a client’s legal counsel based on a combination of highly specific analysis of past experience coupled with demonstrable success.9 Toby Unwin is the co-founder and chief innovation officer of American-based legal analytics service Premonition. Unwin seeks to prove that the correlation between the cost and outcome is weak. 10 He says that, by “crunching the numbers”, the true value of legal advisors is revealed. Unwin is confident that Premonition will disrupt the balance of power in an industry traditionally dominated by the better-resourced party.11 The way forward The application of legal analytics arguably presents an ethical double-edged sword. On one hand, it can heighten and promote transparency in the legal profession and empower clients to act more objectively. On the other, it has the potential to reduce the value and role of legal practitioners to a mere number. Despite ethical concerns relating to fair evaluation metrics, the real intrigue is on what Karageorge calls “the story behind the data”. For those willing to listen to that story, legal analytics offers tremendous opportunities for innovative lawyers and law firms with the will to adapt to new ideas and approach the law with a tech-informed methodology. Technology Notes 1 See: Corien Prins, ‘Legal Analytics – Law & data science is much more than privacy alone’ (March 2016)  Tilburg University Blog, tilburguniversity.edu/topic/big-data/show/ data-science-blog-corien-prins/. 2 The Legal Forecast, ‘Interview (Part 1): Chief Innovation Officer of Premonition, Toby Unwin’ (February 2017) thelegalforecast.com/interview-part- 1-chief-innovation-officer-of-premonition-toby-unwin/. 3 See above n.2. 4 See above n.4. 5 Ibid. 6 Joe Dysart, ‘How lawyers are mining the information mother lode for pricing, practice tips and predictions’ , ABA Journal; above n.2. 7 See above n.2. 8 Bernard Marr ‘How Big Data Is Disrupting Law Firms And The Legal Profession’ , Forbes Magazine. 9 Above n.8. 10 See above n.2. 11 Ibid.