Legal Analytics: Definition, Tools, and Applications

As the legal industry continues to evolve, the use of data-driven insights is becoming increasingly important. Legal analytics is emerging as a powerful tool for legal professionals:

• 90% of legal professionals agree that using legal analytics makes them a better, more efficient and effective legal practitioner
• 81% of legal professionals agree that the results from using a legal analytics tool are looked upon favorably by clients
• 98% of legal professionals say legal analytics improve their firm's performance

Source

By using internal data and leveraging advanced data analysis techniques, legal analytics can help lawyers improve their decision-making, identify risks and opportunities, and ultimately drive better outcomes for their clients.

In this blog post, we'll explore:

• What is legal analytics?
• What kinds of data do legal analytics tools analyze?  
• Why are legal analytics tools worth the investment?  
• How to implement a legal analytics tool at your firm
• And more

What is legal analytics?

Legal analytics is the practice of using data analysis techniques to gain insights into legal trends and outcomes. It involves analyzing large amounts of data, such as court dockets, case outcomes, legal filings, and client information to identify patterns, predict results, and improve decision-making.

Legal analytics can be used in a variety of legal contexts, including litigation, contract analysis, regulatory compliance, case strategy, and business management. For example, legal analytics can be used to:

• assess the likelihood of success in a particular case
• identify the most effective legal strategies
• optimize legal processes to increase efficiency and reduce costs

Legal analytics relies on advanced technology, such as artificial intelligence and machine learning, to analyze large amounts of data quickly and accurately.  

What types of data do legal analytics tools analyze?

Legal analytics tools are designed to analyze a wide range of data related to the legal industry, giving law firms valuable insights that they can use to assess new cases, anticipate outcomes and settlement amounts, or predict the billable hours they'll need for each client.

The three main types of legal data are:

• Court records and litigation data
• Law practice data
• Client data

Court records and litigation data

One of the most common types of data that legal analytics tools analyze is court records. These records can include information on case filings, court appearances, motions, and rulings. By analyzing this data, legal analytics tools can help lawyers and law firms identify patterns and trends in legal proceedings, such as which judges are more likely to rule in favor of certain types of cases, or how successful opposing counsel is in certain types of litigation.

Another type of data that legal analytics tools analyze is case outcomes. By analyzing the results of past cases, these tools can help legal professionals identify which legal strategies are most effective, and which are less likely to be successful. This information can be used to guide the legal profession in strategy and decision-making and can help law firms improve their success rates in future cases.

Law practice data

Think of law practice data as an overview of your business operations and internal activities. This type of data shows your firm's litigation history, appeals rates, the number of cases you've handled, your billing history, and more.  

A legal analytics tool could use your law practice data to give you insights into your current workload, staffing needs, and which of your practice areas are most and least successful. This type of data can also help you identify inefficiencies in your legal workflow, so that you can better streamline and automate your case management.

Client data

Client data gives you an overview of all your former, current, and prospective customers—including their contact information, how they've engaged with your firm, and their legal and billing history.  

This type of data can help you get smarter about how you find new client leads, reengage former clients, and which types of clients see the most success when they work with your firm. Client data can also help you analyze which types of cases are most profitable, and where there's room for improvement in the research process.

Gain clarity into your law firm’s data for better business development.

Watch Now: Actionable Data from Firm Insights >>

Why should lawyers invest in legal data analytics?

Taking the time to analyze your legal data isn't just a nice-to-have for your law firm. It's the key to driving your business forward, better serving your clients, and staying competitive.  

With a great legal analytics tool, lawyers can:

• Save time on manual data sourcing and analysis
• Focus on big-picture strategy instead of minutiae
• Give their clients stronger legal guidance
• Better predict case outcomes
• Attract more prospective clients  

Lawyers today are expected to have a strong understanding of their legal data, and an investment in a legal analytics tool shows clients that you have a robust understanding of cutting-edge legal techniques.

Download the Ultimate Guide to Small Law Firm KPIs >>

How can your law firm leverage legal analytics?

Legal analytics can help law firms answer a broad array of important questions, like:

• Whether or not they should take on a new case
• How an expert witness might perform in court
• The probability of a given case outcome
• What a case's settlement amount will be
• How many billable hours different types of cases will take
• How profitable a new case will be for the firm
• Where there are inefficiencies in legal workflows

And that's just the tip of the iceberg. Let's dive into some of the most common ways that legal analytics software can improve your firm.  

1. Make eDiscovery easier

eDiscovery involves collecting and analyzing vast amounts of digital information, so it's a prime candidate for a legal analytics tool.  

Legal technology has helped lawyers simplify complex processes when it comes to eDiscovery, making it both more efficient and more useful for predicting case outcomes and building a litigation strategy. These tools use artificial intelligence to track trends and patterns in client data, helping lawyers make smarter and quicker strategic decisions.

Structural analytics offer an overview of a given eDiscovery data set. For example, analytics tools can study file digital data to organize files, deduplicate email threads, and more.  

Conceptual analytics helps lawyers make connections between eDiscovery documents so that they can understand a client's entire story from start to finish. These tools can recognize similar topics and group related documents together. They can even identify the sentiment or emotion behind documents, flagging concerning documents for review.

Finally, predictive analytics can prioritize the documents that are most likely to be relevant for a given case and anticipate results.

All these insights combined can help legal teams better assess cases in the early stages, reduce the amount of eDiscovery data points they need to review, and lower the total cost of the eDiscovery process.

2. Inspire law firm marketing tactics  

What's a law firm without clients? Nothing! Luckily, firms that use legal analytics tools have a strong sense of who their ideal customer is, the types of cases that are most profitable, and where most of their client leads come from.  

These insights allow law firms to design an effective marketing strategy to capture the right kinds of clients. Plus, once a new marketing campaign launches, data analytics makes it easier to assess which tactics are working and eliminate wasted spending on unsuccessful initiatives.

3. Predict the future

No, you may not have a crystal ball in your office. But with the help of litigation analytics, your firm can anticipate future legal outcomes.  

Predictive data analytics help law firms understand the probability of winning a case, which judge will provide the most favorable decision, and what strategies opposing counsel will take. It can also help lawyers anticipate how much time a case will take, and how many billable hours they can invoice.

These insights can help law firms decide if they even want to take on a new case based on the likely outcome. And once they do start working with a new client, legal data can drive strategic decision-making.

4. Improve legal research  

Legal research is the process of identifying and analyzing legal information to support a legal argument or decision. Like eDiscovery, legal research once took countless hours of manual labor. But now, legal analytics software makes it easy to compile research in just a few clicks.

Legal research and analytics tools save lawyers time and effort by quickly identifying relevant court decisions and precedents, connecting the dots between cases and helping lawyers understand the likelihood of certain outcomes. Searches can be narrowed by practice area, date, or litigation area.

Not only do legal research tools create an easy way to sort through legal cases, but they also provide access to treatises, pleadings, jury instructions, and other helpful materials. In fact, many state bar associations provide free access to legal research tools so that all lawyers can benefit from this powerful technology.  

5. Increase productivity and profitability

Legal analytics software is also a powerful business operations tool. By understanding which practice areas, case types and even team members are most productive and profitable, law firm leaders can make decisions about where to improve processes, invest in staff training, and hire more staff.  

For instance, with legal analytics tools that track billable hours, you can see how long a staff member spends working on a specific case, and dedicate more resources where needed. Law firms can also analyze the costs and benefits of hiring more legal professionals, and which departments might need the most support.  

Read more: The Value of Data-Driven Lawyer Time Keeping Software >>

Legal analytics software can also help you better manage your firm's workflows. For example, it can help you identify which parts of your legal processes take the most time and are most expensive. These insights can drive decision-making around staff resourcing and technology investments to streamline these less efficient areas of your business.

How to implement legal data analytics at your firm

Implementing a legal analytics tool at your firm can be a daunting task, but with the right approach, it can be a highly valuable investment. Here are some basic steps to make it happen:

1. Identify your goals: Before implementing a legal analytics tool, it's important to identify your goals and objectives. Are you looking to improve your success rates in litigation? Reduce legal costs? Streamline your legal operations? By clearly defining your goals, you can better evaluate which legal analytics tool is best suited to meet your needs.

2. Choose the right tool: There are many legal analytics tools available, each with its own strengths and limitations. It's important to choose a tool that is well-suited to your specific needs and budget. Some factors to consider when evaluating legal analytics tools include the types of data they analyze, their accuracy and reliability, and their user interface and support.

3. Train your staff: Once you've selected a legal analytics tool, it's important to train your staff on how to use it effectively. This may involve providing training sessions, workshops, or one-on-one coaching. It's also important to establish clear procedures and protocols for how the tool should be used, and to ensure that staff members have access to the necessary data and resources.

4. Evaluate and adjust: Implementing a legal analytics tool is an ongoing process, and it's important to continually evaluate and adjust your approach to ensure that you're getting the most out of the tool. This may involve regularly reviewing and analyzing data, soliciting feedback from staff and clients, and making adjustments to your legal strategy and operations based on the insights gained from the tool.

How can Smokeball help?

Smokeball offers intelligent legal reporting software that delivers powerful learnings for small to medium law firms.  

Our platform automatically captures a vast amount of actionable data, through automatic time tracking, billing, client communications, and more. We leverage that data to build easy, manageable reports that give you the metrics you need to run your best firm. Review insights like:  

• Individual matter profitability
• Court and settlement date
• Matter type profitability
• Profitability by fee earner/staff
• Billing status
• Matter stage
• And more

Learn more  about Smokeball’s powerful reporting software >>

Legal analytics: final thoughts

In conclusion, legal analytics has emerged as a powerful tool for legal professionals seeking to gain insights into legal trends and outcomes. From court records and case outcomes to legal filings and financial data, legal analytics tools are designed to analyze a wide range of data related to the legal industry. By leveraging advanced data analysis techniques, legal professionals can make more informed decisions about legal strategies, improving their success rates in litigation and streamlining their legal operations. As the legal industry continues to evolve, legal analytics will likely play an increasingly important role in driving better outcomes for clients and improving the efficiency and effectiveness of legal services.

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