View from Canada: Big Data’s Potential for In-House Lawyers

Topics: Canada, Data Analytics, Law Firms, Thomson Reuters


Big Data is here and it is here to stay. Retailers collect and analyze billions of customer purchases every hour, looking for buying trends to better target their marketing efforts. Credit card companies constantly analyze incoming transactions searching for indicators of fraud. Social media platforms curate, store, analyze, and sell data that is invaluable to advertisers. As WikiLeaks has demonstrated, governments scour, record, and analyze massive amounts of information daily, including data mined from their closest allies.

Big Data simply refers to the use of predictive analytics or certain other advanced methods to extract value from data. Accuracy in Big Data may lead to more confident decision-making, and better decisions can result in greater operational efficiency, strategic planning, cost reduction, and reduced risk.

Should in-house counsel care? Yes, because Big Data i) allows in-house counsel to be more effective; ii) has the potential to introduce new compliance and legal risks; and iii) can be an additional source of revenue for the client.


Recruiting firms have amassed reams of information correlating legal skills to legal support needs, leadership skills, and teamwork, and other criteria such as risk aversion, which are helpful to executives when building their in-house legal teams. Hiring to criteria other than technical excellence may lead to a better, more responsive, and engaged business and legal adviser who can speak both the language of business and the language of law.

Law firms have jumped firmly on the Big Data bandwagon. A firm’s use of predictive analysis should be part of the criteria used by in-house counsel in choosing an external partner. Law firms that partner with their clients to understand their data, to collect their own data, and bring that data to their clients in partnership will have an important competitive edge over those who don’t.

In-house legal departments often explore alternative billing arrangements, but they often fail to follow through, falling back instead on the traditional hourly billing model. Legal management firms have collected empirical evidence of the effectiveness of various contending alternative billing models. The reports, which can be purchased for a fee, provide valuable insights as to the relative effectiveness of a large spectrum of arrangements, thereby eliminating much of the guesswork. Some organizations provide very detailed report cards on law firms that enable in-house legal departments to play hardball when negotiating invoices and provide details as to which external legal firms offer rate reductions.

One of the most difficult challenges for in-house counsel is to decide how best to triage legal support between internal and external counsel. Overall, there appears to be a trend toward in-house keeping strategic, high-value-add legal work. Skyrocketing outside counsel fees, budget constraints, and technology-/data-driven solutions are prompting companies to handle a greater amount of legal work. Big Data is capable of mining clients for their legal needs, examining and interpreting legal invoice data, and analyzing performance reviews and other human resources data and can provide a “genetic road map” for much of the law department’s operations.

You can read this full article online at Canadian Lawyer magazine.