I recently discussed the growing use of big data by law firms. In Should law firms see big data as an opportunity or a risk to their business? I talked about the opportunities and challenges presented by big data and how this relates to law practices.
Picking up on some of those themes, I wanted to explore the topic of data scientists in more detail, and ask – what do data scientists do and how could they potentially help law firms?
Broadly speaking, data science is the extraction of knowledge from data. Management information systems for law firms, like our Katchr system, do this with operational data from within the firm.
But what about the 2.5 quintillion bytes of information created every day outside of your firm – how do you access and make use of that? This is where data scientists come in.
The author of this Guardian article (which includes an insightful infographic on the topic) describes a data scientist as “someone who can bridge the raw data and the analysis – and make it accessible.” He explores the growing demand for data scientists, quoting Google’s Hal Varian, who said “the sexy job in the next ten years will be statisticians!”
Citing the famous McKinsey report, Big data: The next frontier for innovation, competition, and productivity, the article highlights the huge business benefits of utilising big data for commercial gain.
But with so much data out there, how do law firms work out (a) what kinds of data they should be “mining” for, (b) exactly how to extract it, and (c) how to then turn that raw data into useful management information?
There are a number of ways in which data science can bring benefits to law firms.
A primary example is in the process of building up casework. There is now a whole industry built around e-discovery, which negates the need for a large proportion of manual input that paper-based investigations used to require.
Traditionally legal discovery in legal work often involved the delivery of a lorry-load of paper, which could take weeks, months or (in larger cases) years to manually investigate for useful case information. Nowadays, of course, most information is passed on digitally and electronic scanning has eliminated much of the laborious process (and saved many trees!).
But looking to the future, a lot is likely to change. Data is no longer just contained in emails; there is a whole wealth of valuable data held within social media accounts, for example. And with our digital lives becoming increasingly complex and convoluted, how and where does one start to look for the golden nugget of information that may be useful?
Another important area where big data is likely to become more important is around market research – analysing customers, potential customers and market segments. Law firms increasingly need to be market responsive. Being able to spot market trends in time to act and benefit from them commercially is more important than ever now. Social media conversations and trends can provide very detailed information about potential new customers, markets and opportunities for law firms.
So will this new social media age bring with it a new requirement for data scientists in all law firms or are they an unnecessary extravagance at a time when law firms are seeing their margins squeezed from every angle?
With the exception of large corporate and criminal law firms who manage big criminal or fraud cases, I would say that the majority of law firms probably don’t need to consider employing data scientists. Yet.
For small firms the cost almost certainly outweighs the benefits, and their cases can be effectively investigated and managed via more traditional methods of information gathering.
But as the amount of useful data out there is growing. And the cost of mining may well fall, as advances in data science bring quicker and more efficient digital interrogation methods and tools.
In the meantime, there is a huge amount law firms can do with their existing practice management system data, utilising management information and business intelligence tools (like Katchr) to gain valuable insight into their business and their clients, without the need for specialist data scientists.
This is certainly a topic I will be keeping a close eye on, and I would advise small and medium law firms to do so too.
When it comes to hiring data scientists, it may not be a question of if, but when.
Is big data a topic on your watch list? Has your law firm considered hiring a data scientist? How do you currently use data to improve your case outcomes, your operational efficiency or your profit margins?
Please tweet your thoughts to me at @KatchrData
If you’d like to discuss operational data mining for your law practice, or how you could be better utilising your own raw data to create useful management information, please contact us by email or call 03333 010 766.
Find out more about our Katchr management information software.
Blog post by Graham Moore, Managing Director, Katchr.
Law Firm Practice Management System and Business Intelligence expert. Managing Director of Katchr.
If you’d like to discuss how large or small law firm software and legal financial reporting systems could help you run your practice more profitably, please give me a call on 03333 010 766.