Karl Harris, CEO of Lex Machina, discusses how Lex Machina’s legal analytics technology can be used to improve processes and reveal key trends, ultimately helping lawyers win business and win cases.
CCBJ: Tell us a bit about Lex Machina and your role within the legal community.
Karl Harris: Lex Machina has pioneered the concept of legal analytics. We have a flagship product that helps companies win business and win cases by using data-driven decision-making. Just to give you an idea of what that means, we go through the briefs, the motions, the filings, all of the content that goes into litigation in the courtroom, and we use natural language processing and machine learning technology to extract specific information. For example: What is the judge’s likely behavior in a certain scenario? What should your strategy be given your current case? How are opposing counsel and opposing parties likely to behave? Big-picture things like that. We call it data-driven decisionmaking that helps you win business and win cases.
In terms of our role within the legal community, there are two separate things there. One is our role as a business. We’re a business provider. We sell Lex Machina to law firms and companies that are involved in litigation. So, in that sense, we’re a software services provider. But second, in terms of the community itself, one of the value statements at Lex Machina is to bring openness and transparency to the law.
We think that by making information and statistics about how cases progress in a courtroom available – for example, how long will it take, what’s the judge’s likely behavior, what are the likely damages or other outcomes, all those types of things – it brings transparency to the legal system, Using Data to Help Companies And Law Firms Win Big which ultimately is a better thing for our legal community. I think that kind of transparency also improves access to justice, because one of the reasons that many folks are hesitant to use the legal system or are underserved by it is because it’s such an opaque process to many people. Using data to explain what’s going on helps with both of those things.
How are in-house law departments using artificial intelligence, analytics and legal task automation for process improvement?
When I think about process improvement, there are all sorts of different processes that an in-house legal department is required to do. One of the first things that in-house departments do, generally, is select outside counsel to represent them in particular matters. There are obviously businesses that handle litigation in-house, but those are few and far between, and even those types of businesses usually end up partnering with outside law firms at some point or another. And when it comes to selecting outside counsel to handle particular matters, artificial intelligence and analytics can certainly help there. It’s actually one of the most common use cases for Lex Machina. In-house counsel can answer various questions this way: What’s the actual track record of this law firm in similar situations to mine? How have they performed in front of this particular judge? What has their experience been against a particular opposing party or opposing counsel, and what outcomes have they gotten? So, the first thing in terms of a process improvement is getting better at selecting the right outside counsel to handle specific needs, which is something that Lex Machina does very well. So, that’s the first chunk.
Now, let’s say you’ve selected your outside counsel, you have a litigation or a legal matter, and your goal is to manage it and, ideally, to get a favorable outcome for your company. That’s the next phase of legal analytics – winning cases. There are a few different ways that can happen. Number one, legal analytics helps you manage the relationship with that outside counsel you’ve selected. A good example of that: Let’s say your outside counsel recommends pursuing a particular motion, a motion for summary judgment, for instance, and you know that the motion is going to cost, big picture, $100,000. The law firm is saying, “We recommend this course of action.” Well, that’s not quite a data-driven decision. You could use analytics to make a better data-driven decision by saying, “In front of this judge, with this counsel, this motion for summary judgment has, let’s say, a 26 percent success rate in similar situations.” Now, that’s a data-driven decision because then you can say, “I want to spend $100,000 for a 26 percent chance of success.” Or you may not want to do that. But either way, that’s a true data-driven decision.
What developments do you anticipate in these types of platforms and other legal technology in the near term?
I mentioned our value statement of bringing openness and transparency to the law. We also have a mission statement, which is to bring legal analytics to all areas of the law. So one of the things that I think will happen in the near term is that we will be able to build legal analytics for many more of the smaller state court systems where it’s not currently available, because I think that in the next few years more and more state court systems are going to come online and make their data accessible to legal analytics tools like Lex Machina.
Just to back up for a minute and give this some context: Lex Machina currently covers all of the U.S. federal district courts, which are the 94 federal district courts where the majority of federal district court litigation happens. Those are typically big cases. You’re in federal court for a variety of reasons, whether it be subject matter jurisdiction, diversity jurisdiction, the amount of controversy, etc. But the majority of litigation happens in state and local courts, and Lex Machina covers a lot of them, but there are more to go. So as far as what I anticipate happening in the near term, that’s what I mean when I say I think more and more of those state courts will come online. We see more and more available every month and every year, and Lex Machina will ultimately bring legal analytics to all areas of the law. The idea is that any decision involving litigation uses data, and being able to bring that analytical capability to all of the state courts furthers our mission and brings it to its logical conclusion.
How do you expect the continued advancement and expansion of these tools to impact the practice of law?
We recently conducted a survey across large law firms, small law firms, all sorts of different practitioners like partners, associates, librarians, and companies and law firms, to figure out how they’re using legal analytics, and there are a couple of really cool themes from that survey. Number one is the continued advancement and expansion of these tools. More and more people are using legal analytics. When we surveyed this large sample of folks and said, “Are you personally using legal analytics?” – well, 61 percent of people came back and said, yes, they are, which is a great outcome for our industry. When we asked that question just a few years ago, it was nowhere near that number. So more and more people are becoming aware of legal analytics, and more and more people are using it in their practice. Next, we asked, “If you are using legal analytics, are you finding value in it in terms of improving your practice?” And 98 percent of people that use legal analytics said, “Yes, it adds value to my practice.”
Even more interesting, however, is that of those 39 percent of people who don’t use legal analytics, 80 percent of them said that they also see value in it for their practice. What that tells me in terms of trends is that legal analytics is growing and growing, and it will be everywhere soon. You’ve got 98 percent of people that use it saying that it’s valuable to them, and 80 percent of the people that don’t even use it think it’s going to be valuable. So that 61 percent number is going to continue to grow over time, and more and more people are going to have analytics as part of their practice.
What is your vision for the future of Lex Machina?
The easy answer is that we will continue to pursue our mission, which is to bring legal analytics to all areas of the law. So the top priority for our product and engineering team is to keep bringing Lex Machina into more and more courts, and my vision for the future of Lex Machina is that we’ll be in every single state court and every single federal court that has litigation. In the long run, Lex Machina will not necessarily be just a U.S.-focused business anymore. There are lots of international markets that don’t have legal analytics now that could and should, and our vision is to be everywhere. Any place that litigates can use Lex Machina to make data-driven decisions.
In terms of the technology, my vision for Lex Machina is to have it embedded in every step of the lawyer’s workflow. Right now, one of the things that we’ve focused on doing is training folks to say, “Hey, here’s where you should be using Lex Machina. If you’re selecting outside counsel, you should be using it.” Or, symmetrically, “If you’re the law firm and you’re pitching a company to try to get business, you should be using Lex Machina to showcase your expertise. Then when you get involved in litigation, you should use it there.”
My vision is that we will no longer have to make that part of the training. It’ll already be integrated in people’s workflow, whether that means that analytics has a place in the training materials that law firms produce themselves, which our best customers already do, or whether analytics has integration points across all sorts of different products that they already use. Ultimately, my goal for Lex Machina is that we will cover every jurisdiction that has litigation, so that we’re everywhere in terms of access to the data, and then also that we’re everywhere in terms of the workflows, so that as people go through their days as lawyers or in-house counsel, they’re using Lex Machina, for data-driven decision-making at each step along the way.