Tuesday, October 23, 2012

The Rise of Legal Analytics, or the First Signs of Big Data in Big Law

Have your heard of "Big Data"?  Basically, it is the mining of large existing datasets to make better business decisions.  There is a lot of discussion on this topic in the business world.  See, e.g., Big Data: The Management Revolution, Harvard Business Review (Oct 2012); The Age of Big Data, New York Times (Feb 11, 2012).  

The first signs of Big Data in the law firm world are the companies that provide electronic billing platforms for large corporations.  These companies have all the data needed to discern the relative efficiency of various service  providers -- name of firm, title of lawyer, practice area, billing rate, office, and a large portofolio of matters uniformly coded by subject matter and discrete technical tasks.  Clients, of course, know the outcomes of matters, which provides the last piece of missing information to not only calcuate cost and efficiency, but also value delivered to the client.

In the video below, reporters from the Boston Business Journal explain the services provided by these new data analytic companies (TyMetrix and Sky Analytics are briefly featured). 

What I love about this video is that the reporters are outsiders to the law world.  They note that the "transparency" and "information" these companies provide  are wonderful developments for clients -- and, of course, they are 100% right.  Nobody wants to overpay, so tools to eliminate this problem are going to be widely embraced.

The obviousness of this point is why the legal services industry is at the beginning, rather than the middle or end, of a massive structural shift that will be wonderful for legal consumers but profoundly disruptive to law firms and law schools.  In the years to come, we will have fewer lawyers and generally flat or declining incomes within the profession. 

The real money will be made at the intersection of law and technology, which has the potential to scale legal work so it can be better, cheaper and faster.  This is the road to commodification of law.  It is good for society, but bad for those of us wedded to a traditional model where lawyers enjoyed more market power.  Those days are fading into the horizon.

[posted by Bill Henderson]

October 23, 2012 in Current events, Data on the profession, Innovations in law, Law Firms, Legal Departments, New and Noteworthy, Structural change, Video interviews | Permalink | Comments (2)

Sunday, October 14, 2012

Straight Talk on the Woes of BigLaw, by Bruce MacEwen

By Bruce MacEwen, of Adam Smith, Esq., a well known blog on law firm economics.  What Bruce is talking about is going to have major fallout for legal education.

[posted by Bill Henderson]

October 14, 2012 in Current events, Data on the profession, Law Firms, Structural change, Video interviews | Permalink | Comments (0)

Sunday, October 7, 2012

A Thought Experiment: Barber College Research and the Burgeoning CWC ("Certified Wisdom Counseling") Industry

Posted by Jeff Lipshaw

Two posts over at PrawfsBlawg, one by Jason Solomon and one by Paul Horwitz, both on the subject of defending legal scholarship, caught my attention.  

The question is whether the writing that emerges from law professors has value, whatever that means.   If it does have value, does it need to be instrumental value?   I think "instrumental" means that it's apparent very quickly whether there's value (say because it actually generates a rule of law - Areeda and Turner's mid-197o's article on predatory pricing is a classic example).  

I'm willing to concede that the Hart-Dworkin debates on positive and natural law contribute to ultimate flourishing of humankind, but I'm also pretty sure that whatever "instrumental" means, those articles are less so than Areeda & Turner on predatory pricing.  (I'm reminded of the old "BC" cartoon that posed the philosophical question "why are we here?"  The answer from one of the characters was "The sustenance of Hart.")

Steve Lubet (Northwestern, right), it seems to me, correctly identified the issue, and it got batted Graphic-LubetSteven_v2011-01-13 around in the comments:  is there too much scholarship relative to the subject? Nevertheless, the metaphor also getting batted around in the comments, to the effect that law professors are to lawyers as ornithologists are to birds (i.e. birds don't care about the scientists who study them), doesn't work because ornithologists aren't trying to teach the birds how to be birds.

BarberHumor me with the following thought experiment.  

Barber colleges decide next week that faculty, themselves a tiny fraction of the total number of barber college graduates, not only should be teaching students how to cut hair and serving the institution, but writing at least one fifty page article a year.  

The article could be about barbering, but maybe not.  The article could be practical or theoretical.  It could be disciplinary or inter-disciplinary.  There would be no peer review, and the articles would be edited by barber college students.   Finally, the articles might have immediate practical and instrumental value, or they might simply contribute to the sum of the world's knowledge and the ultimate flourishing of humankind.

At the same time, the perfect storm of the Information Age, rising incomes, and access to higher Unknown education has resulted in an entirely new profession, now regulated and subject to licensing as "Certified Wisdom Counselors."  Thousands of previously unemployable philosophy and humanities undergraduate majors now are employable as CWCs, the educational requirement of which is a degree in philosophy.  

Unable to keep up with the demand for teachers, philosophy departments hire some CWCs to teach in philosophy departments, understanding that only a small fraction of the CWCs will go on to be CWC teachers.  Most CWCs will in fact go on to be practicing CWCs.  But as a result, the number of people teaching in philosophy departments explodes.  And it's a requirement of being a teaching CWC that you publish at least one fifty page article a year.  

The article could be about wisdom, but maybe not.  The article could be practical or theoretical.  It could be disciplinary or inter-disciplinary.  There would be no peer review, and the articles would be edited by CWC students.   Finally, the articles might have immediate practical and instrumental value, or they might simply contribute to the sum of the world's knowledge and the ultimate flourishing of humankind.

In each case, isn't it clear that we are likely to have too much scholarship wholly as a result of the structure of the institutions and the incentives for advancement within them?

The closest educational analogs to law, I think, are medicine and business.  Medical educators may often have the same degree as practitioners, but schools use armies of clinical professors to teach clinical skills.  Those clinical professors, I'm pretty sure, aren't required to create scholarship.

Business schools, like law schools, turn out armies of graduates.  But (and I've done all of about thirty seconds of research on this - looking at the As and Bs in the faculty list of the Ross School of Business at the University of Michigan), full-time tenured and tenure-track faculty overwhelmingly get Ph.D.s, differentiating them from the students, who graduate with M.B.A.s.*

As Steve Lubet points out, it comes down to cost.  When the law industry was booming, nobody cared much about this.  Now it's an issue.

* UPDATE:  Except when they teach law or ethics in the business school, in which case a J.D. is a sufficient degree.

October 7, 2012 | Permalink | Comments (0)