Is Big Government Looking toward Big Data Too?

Topics: Government, Law Firms, Legal Innovation

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We’ve written a lot on the Legal Executive Institute Blog about the need for Big Law (and Small Law, for that matter) to more aggressively adopt the changing technology that is rapidly reshaping how the industry delivers legal services to its clients.

Now, someone is suggesting Big Government do the same.

In a recent speech at the Securities Industry and Financial Markets Association (SIFMA) Operations Conference in San Diego, Calif., Kara M. Stein, a Commissioner for the U.S. Securities and Exchange Commission, remarked upon the dramatic changes wrought by technological innovation that are becoming a bigger part of the landscape of securities and markets regulation.

“Our markets have always been influenced by change in technology,” Stein said. “But the rate of today’s changes is unprecedented… [a]nd this new reality is challenging all of us. The proliferation and reliance on data has disrupted our markets—oversight and regulation need to evolve to keep pace.”


Commissioner Stein urged market regulators toward a deeper understanding of data, its security and protection, as well as its uses and value.


Commissioner Stein’s speech is significant not only because she calls for securities and market regulators to ramp up their adaptation and use of new technologies to keep pace with the advances in the market as a whole, but she especially called for regulators to adapt the tools needed to sift through and decipher the mountains of data compiled daily as part of the financial markets.

Commissioner Stein urged market regulators toward a deeper understanding of data, its security and protection, as well as its uses and value. She also recommended that the SEC create an Office of Data Strategy overseen by a Chief Data Officer as a central point for this focus.

In much of what she said, Commissioner Stein’s talk reminded me of the recent Emerging Legal Technology Forum, which was co-sponsored by Thomson Reuters’ Legal Executive Institute and Stanford Law School. Speakers at that event also focused on the new tools and technologies coming into use in the world of corporate legal services and how it was also desperately important for large law firms to similarly “keep up.”

Like Stein’s speech, the Forum focused on the myriad changes that technology has brought and will continue to bring to the legal industry and how imperative it was that firms keep pace with what the market is doing and what their corporate clients are expecting.

“Technology has the promise to allow massive change in the delivery of legal services,” said Ralph Baxter, Chairman of LEI, at the Forum’s onset. “Not just cheaper and faster delivery, but better delivery of legal services for the client.” The Forum featured panels discussing separate aspects of the how technological innovation is continuing to reshape legal service, including how legal analytical tools are allowing for much more comprehensive review of massive amounts of data (which is exactly what Commissioner Stein was discussing, too.)


The legal marketplace, much like the trading markets, has undergone and is continuing to undergo massive, systemic change, and while it may not become unrecognizable to its legal forbearers, it will look different in the future.


In her speech to SIFMA, Commissioner Stein described how the earliest manifestation of a stock exchange—under a buttonwood tree at 68 Wall Street in 1792 where traders met to swap securities face-to-face—has become unrecognizable in today’s faceless, high-speed driven trading markets where computer algorithms do most of the work in micro-seconds. “[T]he need for speed is unquenchable,” Stein said. “Wires are being replaced with fiber optics, microwaves, and laser beams. The human blink of an eye is too slow for today’s market.”

The legal marketplace, much like the trading markets, has undergone and is continuing to undergo massive, systemic change, and while it may not become unrecognizable to its legal forbearers, it will look different in the future.

And that matters to Big Law too because as Commissioner Stein calls for changing the way securities industry regulators approach technology and its uses in policing the markets, public companies—the clients of Big Law—will be impacted as well. Corporate America knows this, and Big Government (at least in the form of the SEC) is waking up to this fact as well.

So too are many important voices in the legal community. At the Forum, Prof. Phil Malone, professor of law and director at the Juelsgard Intellectual Property and Innovation Clinic at Stanford Law School, said that what is driving and will continue to drive these “rather profound changes to the legal system” is not some “shiny new toy” of technology, but corporate clients pushing their law firms for greater efficiencies. “This is not technology driven—it is market driven,” said Prof. Malone.

Whether driven by tech or the market, Big Law needs to more aggressively join the movement toward new tools, new ways of looking at data, and a new way of doing business.