Outsourcing. Some may see it as a dirty word, but corporate outsourcing crossed the transom into legal departments in 2018. Most notably, UnitedLex inked deals with DXC Technology Co., General Electric and Ford Motor Co. to take over processes including negotiating contracts and handling all aspects of a company’s intellectual property portfolio. UnitedLex, which in October sold a majority stake to private equity firm CVC Capital Partners, says it inked deals worth an eventual $1.5 billion in an 18-month period.
Some general counsel have been attracted by the savings that come with a professional outsourcing deal. DXC says it cut legal costs by 30 percent. It also rebadged 150 lawyers and professionals from DXC’s payroll to UnitedLex’s. Those twin tailwinds—lowering costs and increasingly large in-house staffs—suggest outsourcing will continue to spread through legal departments in 2019.
Looking forward to the new year, expect the industry to keep innovating with analytics. Big data may feel like an overused buzzword. Yes, it has been around for a while. But law firms are finally using data analytics in two crucial ways. The first is to better manage their businesses. The second, with the help of a growing roster of tech products, is to be better lawyers.
On the lawyering front, legal analytics took a major step forward at the end of 2018 when LexisNexis launched a new tool that analyzes the language of judges’ opinions to tell litigators what cases they cite most often, why, and for what types of motions. Nik Reed, who founded Ravel Law, the company whose technology LexisNexis Context is based upon, says the tool is equivalent to having a conversation with a judge’s clerk. The tool represents only the start of a new level of analysis. Reed says the company will look to analyze individual lawyers’ briefs, which, when matched with its analysis of judges’ opinions, could allow clients to know how frequently certain lawyers craft arguments that judges use in their opinions. Down the line, says Rick Merrill, CEO of litigation analytics company Gavelytics, metrics like that will be the predominant way that lawyers are hired.
“It will be unthinkable to not refer to those metrics when making litigation strategy and tactical decisions,” Merrill says. “People will look back and laugh. ‘Can you believe we used to not do this?’”
Analytics will be used to do more than unearth new measurements of the most persuasive lawyers. Law firms are quickly learning how to harness data from their disparate records-keeping systems to create a more rigorous pricing process. Consider a Fenwick & West tool that matches the firm’s financial and docketing databases to create a real-time tracker for the cost of its patent prosecution work. The application helps partners who manage the process know when deadlines are coming up, while also showing the firm if a matter is running above cost. The firm plans to apply a similar system for its broader litigation group, says Kevin Vaarsi, Fenwick’s director of pricing and product development. The firm has also created an experience database that has captured 20 aspects of 1,000 M&A deals as a way to both help lawyers find relevant documents and for its pricing team to find better ways to price its deals.
“We are transforming the way we operate,” Vaarsi says. “We’ve come a really long way in terms of making data-backed decisions for financial decisions. But there are always ways we can improve on that.”