Bennett Borden, Drinker, Biddle & Reath LLP
WHO INVENTED THE FIRST AUTOMOBILE? It wasn’t Henry Ford, but it’s his name that comes to mind when we think of early automotive revolutionaries. Likewise, Steve Jobs didn’t invent the computer, nor did Mark Zuckerberg invent social networking. What these three men have in common is that they took technology and found a way to leverage it into something new.
Today, no matter what industry you’re in, every company at its fundamental level is a data company. It doesn’t matter what you make or sell because information — and how you create and use it — has become our fundamental product.
Lawyers, of course, have always bartered in information. What we sell is insight and surety of insight. This is true for every aspect of the law, from investigations and litigation to due diligence and M&A. In the information age, lawyers who can harness data analytics to get to these insights more quickly and accurately will be the winners. These lawyers will have a competitive edge over an opponent because they will have mastered the facts of the case first to create strategic advantage for clients.
Data analytics gathers facts from disparate electronic information and identifies patterns in it quickly and accurately. It can be used to look back in time to analyze previous behaviour and, to some degree, predict future behaviour. The retail industry in particular has latched on to this technology to make accurate predictions about consumer behaviour. Lawyers can do the same gather facts much more quickly about their clients and their opponents.
With data analytics, my fact-development team can get through a million documents in a week’s time. We can help clients understand their position and their opponent’s position within days, while opposing counsel exhaust months of time. While they’re stumbling around, grasping for the facts, we already know what happened and why.
One time, my firm represented a corporate client facing a whistleblower qui tam action that alleged a violation of the False Claims Act. By targeting the data and using advanced analytics to go through 675,000 documents, we knew with certainty that the allegations were baseless. This data-crunching took place over four days and before we filed an answer to the complaint. It resulted in a settlement that was a small fraction of the cost of litigation and was done without any formal discovery.
Many M&A deals, meanwhile, include indemnity provisions that allow a buyer to claim a purchase-price adjustment for information that wasn’t disclosed or was incorrect. Most buyers rarely act on these provisions because claims have to be filed within a short period of time, and it’s tough to quickly gather and prove a claim following an acquisition. Using machine-based learning models, my team has recovered millions of dollars in indemnity claims by analyzing an acquired company’s information systems.
Analytics can also be used to develop algorithms for compliance. With the help of intelligence experts, social scientists and criminal psychologists, we have created algorithms that can identify warning signs of misconduct in large data sets, such as email, chat and texts. We use these analytical tools to help corporate clients with compliance issues detect and prevent misconduct much earlier.
Law firms that master data analytics will become the leaders in our profession. Instead of patting ourselves on the back for just getting through e-discovery, we should be asking ourselves what else we can do with data to serve our clients better. Information is now largely contained in electronic data. If your lawyer doesn’t know how to use analytics to get at that information, get a new lawyer.
Lawyers who ignore the power of analytics and fail to adapt are like the dinosaurs the day before the asteroid hit.
They’re extinct. They just don’t know it yet.
Bennett Borden is Chief Data Scientist at Drinker, Biddle & Reath LLP.