|The 2016 Chief Legal Officer Survey, conducted by Altman Weil, has been discussed here. That survey included a question about the CLOs primary law firms and what those law firms have shared with them of data analytics. Specifically, the question asked “Considering the ten law firms that receive the largest portion of your outside counsel spend, in the last 12 months how many of those firms have provided you with an analysis of spending data that was useful to your law department? Select a number between 0 and 10.” Page 19 of the report gives the overall results overall and then breaks them down by the number of lawyers in the department.
The chart hereafter shows a breakdown by revenue of the company. Revenue and number of lawyers are correlated, certainly, but many readers are more familiar with categorizing companies by their revenue.
The situation is dramatic and regrettable. Almost no chief legal officer in this large sample of 331 (median lawyers nine and median revenue $3.5 billion) has been impressed by what their key law firms have recently shown them on spending data-analysis. More than half the respondents stated “zero” while 32 did not provide an answer. One bright spot, however, was the department that claimed that all ten of its key firms had provided valuable data analytics! For the others, irrespective of the size of the department mostly, on average less than one firm offered analytic value regarding the one area they could do so most easily: their fees and expenses. Even the largest companies, who are likely to spend millions on law firms and to have large, sophisticated firms representing them, averaged less than 1.5 firms on average.
Law firms that appreciate the value of data-based decision making, that can trawl at least their own figures to draw conclusions about management, and that can help their clients benefit from those insights, will leap ahead of their innumerate competitors.