Applying ‘moneyball’ to the legal department

A version of this article appeared in the January issue of Today’s General Counsel. It can be found here

Twenty years ago, baseball front offices chose players based on appearances, superficial metrics, and rudimentary analytics. They bankrolled crusty scouts who would evaluate talent by box score and physical stature — not appreciating that batting average is one part dumb luck or that bat speed, not the ability to fill out a jersey, correlates highly with home run power.

Fast forward to the age of “moneyball,” a management philosophy that seeks to enhance performance through innovative analysis and use of data.

Moneyball was at once a debunking of the subjective signposts long thought to be determinants of success, and an awakening to the powers of rigorous empirical analysis. It was as much a revolt against intellectual laziness as it was a bid for competitive advantage.

These days, smart, cost-conscious teams focus not on the performance of individual silos (the bullpen, the outfield platoon), or standalone stats (stolen bases, RBI), but on how these pieces — and pieces of intel — compliment each other to perform as a whole. They mine advanced statistical formulas to project success, identify opportunity, exploit market inefficiency and calibrate resources.

And above all, they share information across the organization with the assumption that data of value to the GM is also important to the manager, the pitching coach, the training staff and so forth. The results are unity of purpose, operational efficiency and decision making that yields better results.

The data-driven legal department

It didn’t happen overnight, but intelligent ball clubs came to an important realization: Data is everywhere, and the ability to use that data in inventive ways is the key to driving higher performance across the organization at lower cost with less risk.

Moneyball, of course, has important analogues and lessons for business-minded legal departments. It is among the most distinct examples of how the abstract concept of information governance can be applied in concrete terms. It shows how Big Data can be harnessed and brought to bear to realize benefits across departments. What are sabermetrics, after all, if not a rigorous application of Big Data?

The same data revolution that gave rise to moneyball is underway in legal departments across the globe. Just as effective moneyball redounds to all areas of an organization, so too can savvy legal teams spearhead data-driven change that bridges departmental gaps — positively affecting compliance, security, risk, records management, and revenue.

Electronic discovery is a thorny process under legal’s purview that both cuts across all these competencies and is ripe for a more data-focused assessment. Discovery, as most legal practitioners have come to lament, is among the most expensive, complicated and risky aspects of litigation.

But it can be streamlined in a way that brings companywide value.

Consider, for example, large organizations that routinely face similar types of lawsuits or regulatory investigations. Most begin discovery from scratch at the outset of every incoming matter, even though there is likely to be heavy overlap in the information and custodians at issue, the repositories to be searched, and the documents to be produced from case to case.

Data-driven legal departments, by contrast, will reuse document collections and privilege decisions for similar matters, only supplementing them if necessary. They will track document review costs by matter type, using data obtained from previous matters to project future costs and budget accordingly. They will make decisions about whether to fight a case or settle by weighing the amount in controversy with legal fees incurred from recent cases. And they will look carefully at the documents and information likely to be relevant to assess the validity of the case and expected outcomes.

Assume, for instance, you know emails authored by your chief technology officer have been, and will likely continue to be, relevant to serial patent litigation claims. How much time and money can be saved, and business disruption averted, if those emails are archived and readily producible when a discovery request hits? Data-driven legal departments can answer that question to the decimal point, pointing to the impact on the organization’s bottom line and making those cost-savings known across the executive suite.

In the same vein, counsel who track performance of document reviewers by speed, accuracy and ability to identify important issues are better positioned to reassign or eliminate under-performers and place superior personnel where they are needed most. Certainly this same benchmarking can be leveraged in other cost-intensive areas as well.

Technology empowers change

The emergence of robust technology has made such data-driven decision-making a reality. The best tools empower collaboration with intuitive platforms that are widely accessible, transparent and easy to use. They facilitate sound judgments by measuring and making sense of seemingly inscrutable volumes of data. They illuminate black boxes. They turn information into knowledge.

In an increasingly cutthroat corporate environment where every penny is pinched and every belt tightened, it is not enough to do business as it was done before, to rest on laurels, or to turn an indifferent eye toward the widely-accepted benefits of using data smartly.

That way of thinking cost an entire generation of baseball executives their careers.

The confluence of powerful technology and Big Data is revolutionizing every facet of our lives, and it has transformed an institution so stodgy so as to be known as America’s Pastime. It is time for legal to embrace what it has long avoided. Leveraging data wisely can’t ensure success, but ignoring it will secure failure.

Andy Wilson is the CEO of Logikcull. He can be reached at andy.wilson@logikcull.com.

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