Probably the most fertile ground for the use of legal business analytics relates to predicting costs for litigation matters. It can be done, within reason. The concept makes sense— e-billing has been around for a long time, there is much available data, why not use it?
Predictability of outside spending is a top law department pain point, as is controlling costs. Analytics can help predict and manage three components of spending: billing rates, staffing and productivity. The most common is billing rates, but the combination of the three can lead to cost prediction.
With models for predicting costs for specific types of matters, law departments can develop more accurate budgets and can better manage matters when costs significantly drift from predictions. Similarly, outside counsel can use analytics to create matter budgets, to manage how they staff matters, and to ensure that rates are competitive. Both parties can use analytics to develop workable alternative fee arrangements.
