While the initial euphoria of the “Big Data” revolution may have abated slightly, the prevalence and volume of data in business has only increased. So too has the sophistication of tools to leverage data, providing new opportunities to practically every business department. This includes the legal department, which is generally perceived as resistant to any effort at quantification.  

The message to GCs is getting through. At a recent Global Leaders in Law Congress sponsored by Morrison & Foerster, nearly half of the participants said in response to a survey that they are expected to make data-driven decisions. 

“Legal teams need to move away from being viewed as a black box by their internal clients,” says Christopher Martin, associate general counsel at The Boston Consulting Group. “It’s not sustainable. You need to have some sort of performance measurement to allow you to make transparent what the legal team contributes to the success of the business. It’s not easy to measure given the type of work we’re doing but it’s not something we can get around.”

Legal data frontier

Perhaps not surprisingly, legal departments in technology-focused companies are among the most sophisticated at deploying data, especially as it relates to evaluating the efficiency of outside counsel. Because the business models of technology companies are often built around data, their legal departments are more inclined and capable of leveraging data, notes Kristina Ehle, co-managing partner of Morrison & Foerster based in Berlin.

“This is still a people business based on trust and being available,” says Ehle. “But these companies also know it’s based on pricing and efficiency.”

Legal and compliance departments in financial institutions, under the glare of regulators, are also at the forefront of deploying data. Some, for instance, are mining their data in areas such as trading and accounting records to detect red flags.

“To a certain extent you can proactively look for that kind of risk and be rewarded for doing so if you sit in front of the Department of Justice or the Securities and Exchange Commission,” says Zoë Newman, managing director in Kroll’s business intelligence and investigations practice.

While these GCs are able to access data, there are still many, however, who let data fall to the bottom of the IT spend priority list and don’t have access to the data they need.

More data, more challenges

Still, just when and how to use data will continue to present a major challenge for all GCs. How much data is enough? How do you detect the signal from the noise? What areas benefit from data analytics and which don’t? When should you trust your own judgment even if it contradicts the data?

Lawyers tend to be very curious people who want as much information as possible before making a decision. A 2017 study by the executive search firm Heidrick & Struggles identified GCs as outpacing other executives in the “forecaster” leadership trait (learning-oriented, knowledgeable). But that trait can be a double-edged sword if it leads to discomfort with ambiguity.  

“Judgment is still critical,” notes Ben Woolf, general counsel EMEAA at Tate & Lyle. “You can have all the data in the world, but if you cannot use that to support the judgment you’ve made, it’s not really going to be very helpful.”

Is your role being redefined?

The explosion of data provides new opportunities, expectations, and challenges for every facet of a business. As leader of the legal department, do you know which data you need, when and how? Are you ready and capable of recognizing data’s limits while also exploiting its possibilities?

This post is part of a thought leadership series, “The GC {Re}Defined,” which explores how technology is reshaping the role of the GC.

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