Predictive legal software for general counsel
Nearly 60% of business leaders polled by Bi-Survey say they rely on instincts, rather than data, to make the majority of decisions. But data-driven decision-making offers significant business value, including an “81% advantage in growing revenue and a 173% advantage in better complying with regulations and requirements,” according to a Collibra and Forrester study.
If you find yourself regularly basing short- and long-term goals on educated guesses, it’s time for predictive legal software. Predictive legal software helps you rely more on facts than feelings, letting you provide more effective and strategic legal and business advice.
What is predictive legal software?
This type of legal management solution is based on predictive analytics, a method that uses current and past legal data to forecast future outcomes. It applies built-in mathematical models to identify trends, like how much you typically spend on vendors per month, then uses that information to predict what happens next. This kind of digital tool saves you a ton of time and effort while decreasing the chance of human errors in calculations.
The quantity and quality of your legal data points determine how accurate the models can be. This is why housing all your relevant legal information in one integrated platform is so important. You don’t have to worry about duplicate data entry or missing metrics when your legal software can pull in real-time data from different applications. This way, the models get the full picture of what’s happening in your corporate legal department.
Predictive legal software suggests future results across a variety of critical legal metrics, including:
- Spend analytics: Total legal spend, spend to budget, spend by practice area, etc.
- Helps with: Cost control
- Vendor analytics: List of vendors, matter lifecycle times, timekeeper rates, etc.
- Helps with: Outside counsel management
- Contract analytics: List of legal contracts, contract types, renewal dates, etc.
- Helps with: Risk management
With these kinds of insights, you can objectively identify risks and opportunities to take proactive measures.
Check out our blog post on becoming a data-driven GC for even more tips on using legal analytics.
Artificial intelligence analytics bring even more business value
While any predictive legal software is better than none, artificial intelligence (AI)-powered platforms help you get to strategic solutions faster. When combined with machine learning, predictive technology can forecast accurate results and take action. It’s the difference between a professor underlining problems in your essay versus leaving notes about what you can do to improve—and that difference gives you a stronger return on investment.
With AI-powered predictive legal software, your forecasts won’t get thrown off from irregular data points.
While all predictive legal software uses fixed models to analyze data sets, legal AI continuously changes in response to new information. For example, the earlier version of our legal e-Billing system relied on pre-set billing guidelines to identify and flag violations. When we added machine learning algorithms and natural language processing to create our SimpleReview solution, the predictive tool gained the ability to highlight problems and recommend adjustments based on its analysis of past invoices.
You don’t need to tell AI what to look for with pre-set rules and models because it develops understanding on its own. For instance, SimpleReview can catch instances of block billing just by studying historical invoice data.
As Forbes notes, “pairing predictive analytics models with AI are crucial in improving forecast accuracy post-pandemic.” COVID-19 created unusual data patterns affecting the accuracy of typical predictive models. AI legal technology, on the other hand, can analyze historical and current content to determine which trends are temporary or normal. With AI-powered predictive legal software, your forecasts won’t get thrown off from irregular data points.
It’s also worth looking at AI-based predictive software because it’s primed to be the future of the legal industry. AI tech in legal is expected to grow by nearly 30% in under 5 years. The last thing you want is a legal platform that’ll be obsolete. AI is only going to keep advancing, which means a continual return on investment.
How predictive legal software benefits general counsel
Predictive legal software empowers GCs in business-minded decision making and in running an effective legal cost control center. With data-backed insights and time savings from this digital tool, you and your in-house legal team can become more strategic in helping the company succeed.
You’ll find new ways to meet your cost-saving goals
According to the 2021 EY Law Survey, 88% of GCs want to reduce overall legal department costs within the next four years. With data-driven legal spend forecasts, you can identify spending patterns, uncover hidden issues, and find places to save. Then, you use that information to work with your in-house team to set realistic cost control goals and stay on track with your budget.
For example, your software might predict that outside counsel spend will take up more of your budget than you’d like. You’d compare that data to your internal legal spend to see if it’d be cost-effective to bring more work in house.
You’ll gain new insights to get the best ROI from law firms
With predictive analytics, accurate projections show how long it should take law firms to complete matters and how much they’ll cost you. These vendor metrics are an objective way to determine which vendors are worth the cost of working with, especially ones that provide legal services in the same practice areas. Your budgets will also become more accurate than if you were relying on guesswork.
You’ll objectively measure, track, and get ahead of risks
Using predictive legal software means you’ll worry less about missing problematic contract clauses and spend more time focused on big-picture goals. The 2021 EY Law Survey found that consistently monitoring contract risks is a struggle for GCs. 71% of respondents noted they can’t flag contracts for “for deviations from standard terms,” and 78% said “they don’t systematically track contractual obligations.” Predictive legal software can handle both of these tasks, giving you a much more effective risk management process.
You’ll relieve strain on your in-house legal team
Investing in predictive legal software is an investment in your corporate legal department. Without this type of integrated platform, your trusted team members also have to rely largely on incomplete data and guesswork for their strategic planning and decisions. Not to mention the amount of time it takes to try to manually conduct predictive analyses.
Working with this software means legal ops professionals and in-house counsel can fly through once-cumbersome tasks like invoice review and report building with greater speed and accuracy. This makes their day-to-day work less stressful and reveals data insights that can be turned into productive actions.
Predictive legal software will help you stay agile in a changing world
Predictive data analytics support general counsel in being not just top lawyers, but top business leaders. Whether you go with a standard or AI-based system, you’ll be able to get ahead of potential financial or legal problems and find more ways to improve your department’s performance. Check out how our legal management software can help you get ahead of the curve — and stay there.
This article has been updated to reflect new information and industry trends from the original article, published on March 2, 2016.