Tactical Advice

The Big Data Opportunity and Challenge for Law Firms

Law firms are looking at business intelligence and analytics to help both themselves and their clients.
The Big Data Opportunity and Challenge for Law Firms
Credit: iStockphoto/ThinkStockPhotos

Driven by both a need for greater efficiency within their own firms and requests from their clients, more law firms are becoming familiar with Big Data.

In a nutshell, Big Data results from the explosion in information, especially unstructured data such as posts from social media, audio, images, video and transaction records. Big Data grows fast and as it does, it becomes more difficult to manage. The only way to manage it is to make it discoverable and index it.

“Big Data is very much here to stay as a corporate risk problem. It is causing in-house law departments and risk officers to pay very close attention to the new issues Big Data is raising,” says Peter Gronvall, managing director of Huron Consulting Group. “Outside counsel is being called upon to advise on how best to handle Big Data concerns. This includes how to tap into Big Data as evidence when it falls within the scope of a legal issue and in terms of addressing data security, privacy, compliance and ethics considerations.”

Unlocking the Big Data Within

Law firms, like most companies in today’s economy, are looking for ways to cut costs while remaining efficient and responsive to clients.

“If you don’t have a handle on your own metrics and understand your own Big Data, you are at risk of not being able to deliver services within an acceptable margin to be profitable,” says John Jablonski, a partner at Goldberg Segalla, a New York-based law firm.

Ideally, a firm should be able to analyze its data across types of engagements and industry segments. For example, firms should understand how long it takes to draft a typical commercial lease and perform due diligence based on the value of a transaction.

“You can do so much if you have the right capabilities,” Jablonski says. “You can market your efficiencies to your clients, and you can identify the attorneys who are most efficient in servicing a specific client with specific needs.”

Although Goldberg Segalla will eventually have those capabilities, the firm must take interim steps to get there. The first step, says CIO Les Page, is to move away from siloed systems for case management, marketing, financial information and email and toward a more integrated system.

“We want to be able to take all of the data pertaining to a client regardless of its source and be able to massage it and analyze it. Then, we want to be able to get a 10,000-foot view of a client and easily drill down to whatever piece of information we have,” Page says.

Navigating Big Data’s Uncharted Waters

While law firms face the challenges of implementing Big Data solutions in their own work, they must also help clients navigate the Big Data waves. Like law firms, clients want to mine their rich data sources to increase productivity and accuracy, better target ads to their customers, reduce risk, improve loyalty marketing and much more.

As these companies begin using Big Data, they are asking for help in managing risk and privacy concerns, and enterprising law firms have begun developing practices around Big Data consulting.

32%
The percentage of IT decision-makers at mid-sized to large organizations surveyed who said they expect the amount of data they store to double in the next two to three years. That same survey found that more than 75 percent are implementing Big Data-related solutions within the next 12 months.

Source: Global Enterprise Big Data Trends: 2013 from Microsoft

Outside counsel, as well as outside legal consultants, are well advised to prepare themselves to address their clients’ Big Data concerns, in particular because Big Data raises far-reaching issues, Gronvall says. He cites the major issues as data privacy and security, which relate to how organizations defensibly handle Big Data when it falls within the scope of an evidentiary request or other compulsory legal matter.

“The biggest issues are when a company is trying to use Big Data for marketing purposes, because there is the potential, even when the company tries to strip personal information from the data, that somebody may be able to figure how to recombine the data and determine who it relates to,” says David Navetta, a founding partner at InfoLawGroup, a law firm focused on legal issues concerning privacy and data security.

InfoLawGroup advises companies on the contractual protections they should take when contracting with a third party to analyze data. The other part of the puzzle is figuring out the technology companies should put in place. That’s an evolving area for law firms, he says.

This subspecialty is likely to grow, Navetta says, because the landscape is constantly changing, not only in terms of Big Data growth and how to handle it, but also in potential threats themselves.

The problem is a moving target. While stripping personal information from data is a major concern today, the biggest headache next year might be hackers who can use anonymized pictures of people and, using facial recognition, link them to actual people, he says.

Big Data Counselors

For years, law firms and their customers could get away with using predictive analytics tools, which allowed them to review a subset of their data repository and extrapolate the results. But with data growing so quickly — much of it unstructured data — these tools can’t keep up.

“The growth of data is rapidly outstripping the ability of traditional tools to be able to efficiently search, index and produce the information,” says Matt Gillis, a vice president at LexisNexis. “We are already seeing customers telling us that they have 300 terabytes of data that is potentially responsive, but no tools that will allow them to get value out of it. It’s clear that the next generation of tools these organizations use have to be Big Data-capable.”

Gillis is talking about a tool like LexisNexis’ HPCC, a massively parallel open-source computing platform for processing large data sets, which includes both an indexing engine and data repository. HPCC is one of several Big Data tools on the market, such as IBM’s PureData System for Hadoop and EMC’s Greenplum, also based on Apache Hadoop.

Slowly but surely, the move is toward tools that can index both structured and unstructured data sets quickly and then extract and search the metadata to find patterns. Ultimately, Gillis thinks that LexisNexis, and perhaps others, will provide an integrated suite of tools that will interact with massive amounts of data as early as possible, all the way through the lifecycle of the data.

“While I don’t anticipate law firms setting up free-standing law practice groups singularly focused on providing Big Data counseling, I think Big Data issues will continue to keep lawyers increasingly busy,” Gronvall says. “The issues raised by Big Data will require important outside counsel help from a variety of practice specialties, including corporate compliance and ethics, data and records management, electronic discovery, and data privacy and security.”

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