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Big Data Meets Big Law

December 27, 2012

3.) Attorney title (partner, associate, etc.)

4.) Years of experience

5.) Specialty

For example, for a partner with six years of experience in finance and securities working at a 550-attorney law firm in New York, the average rate is $569 an hour. But a partner with the same experience — at a same-sized firm in Raleigh, North Carolina — will run $438 per hour.

This is the type of information that helps general counsel better manage their legal costs, says Daniel Katz, assistant law professor at Michigan State University College of Law. In many cases, it doesn't matter where the legal work is done. But until now there was no way for general counsels to easily compare such information.

Although the app is based on historical data, it's uncanny how accurately it can predict current rates, gushes Craig Raeburn Jr., the managing director of the TyMetrix Legal Analytics unit. "Every time we sit down with a lawyer — whether on the corporate side or law firm side — and we do that analysis . . . we are within five dollars of what the attorney's rate is," he says. "They say, 'oh my God — how did you do that?' "

WORKING BY NUMBERS

You would think the capabilities of quantitativelegal prediction might be threatening to BigLaw. But that's not the attitude at Seyfarth Shaw. It adopted Lean Six Sigma, a data-driven management and quality improvement philosophy, about six years ago, says Lisa Damon, partner and chair of the firm's labor and employment department.

Today, it has customized some of the concepts into what it calls SeyfarthLean, a client service model based on Lean Six Sigma principles. To more accurately price and more efficiently deliver legal services, the firm collected and analyzed data on the amount of time it took people to do various tasks. It used information from TyMetrix's Real Rate Report, which includes data on the average amount of time that a timekeeper spends on specific tasks in defined types of legal matters, says Damon. "That data is incredibly important in terms of efficient delivery of services. It allows law firms and in-house legal to look at median costs for a particular type of matter, and begin to drive those costs down through greater efficiency."

But what about the fact that Seyfarth's clients also have access to that information? "We think the [availability of] more data presents the opportunity to make better decisions," she says. "Greater transparency is always a benefit."

Seyfarth is also using data to help it better manage legal matters. In the area of employment law, the firm has collected data on U.S. Equal Employment Opportunity Commission cases, and it has access to a national EEOC database as well.

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