Will Data Analytics Allow Us To 'Do Less Law'?

Hardly a day goes by in the legal market without an article or blog post about alternative fee arrangements (AFA) or delivering more "value". Yet both clients and law firms struggle to define value and adopt alternatives to the billable hour. Perhaps the time has come to re-think the question ...asks Ron Friedmann*.

Changing the Focus to Preventive Law

"More value" and AFA means reducing legal costs, not just quoting fees as an hours estimate times the rate. A real AFA therefore requires steps such as process improvement, automation, and alternative staffing. To be sure, these reduce cost and improve how lawyers practice. But are we missing a more basic, first step? Perhaps we can reduce legal spend by "doing less law". Avoiding an activity altogether saves more than simply improving its efficiency. I raised this possibility in my November 2011 blog post, To Reduce Legal Spend, Do Less Law. Clients have two promising paths to doing less law:

1. First, decide how much legal effort - if any - a problem warrants. Doing so means making tough decisions; it means assessing potential outcomes and making risk-adjusted decisions. It will be an anathema to many. Before you object to the possibility, however, consider how you would demonstrate that the level of legal investment today is economically s. If we can develop an analytically sound framework - one focused more on outcomes than inputs - then we may be able to allocate legal resources more sensibly. Clients may find they are doing too much law, too little, or, if luck strikes, just the right amount. This problem is, alas, so hard that I will leave it to others to tackle.

2. Second, avoid legal problems. Occasional articles and talks address preventive law. I have not seen, however, sustained and systematic effort by clients - or their outside counsel - to detect and prevent legal problems before they occur. We may find that the former costs more than the latter but without a better try at prevention, we are simply flying blindly.

The Promise and Limitations of Data Analytics and Modeling to Support Preventive Law

A recently published article spurred my thinking on one potential approach to preventive law: analyzing corporate data to identify, in advance, where legal problems might arise. If we can predict problems, then we at least have a chance to avoid them.

I will discuss here a recently published article, disagree with the authors' conclusions, and offer some ideas for data collection...