The world of law can sometimes seem like Hogwarts: hard to penetrate, hard to understand (even if you get a glimpse inside) and seemingly hidebound in tradition.
Slowly, but inevitably even the law is seeing disruption. Many aspects of entry level / recent law school graduates have been slashed by technology. Young law firm associates once spent hours poring through documents and deposition transcripts to find references, now optical scanning technology provides answers in seconds. That formerly lucrative model (bill associates out to clients at a far higher rate than what you pay the associates) is no longer readily available to law firm partners.
Other areas of law practices have seen change. Offshoring, long a strategy in other industries, has been adopted by law departments for simple matters like contract renewals.
One of my former employers used a perfectly acceptable company in India for such matters, the time zone differential gave us overnight service.
One of the most disruptive moves for both law firms and the in-house law departments that hire the firms is now being caused by Bodhala. Created by former Kansas politician and Harvard Law graduate Raj Goyle, Bodhala is the first platform that unlocks the power of big data and machine learning to equip law departments and firms with the evidence required to efficiently make critical business decisions.
I recently spoke with Goyle about how Bodhala is bringing law into the 21st century. The law is an industry that “is just now realizing the abundance of unstructured data available for use. Bodhala is the only platform that can take the mass quantity of data, analyze it, and provide actionable, easy-to-use insights.”
Goyle and his partner Ketan Jhaveri are Co-CEOs and Harvard Law School buddies from a couple decades ago. Jhaveri came up through a traditional white shoe law firm and a Department of Justice position, whereas Goyle moved in a “more circuitous route.” The more they looked at the business of law, the more the pair discovered about this half a trillion dollar global under the radar industry. “It is like furniture,” observes Goyle. “Someone said to me last week that the law lacks an operating system.”
Bodhala has essentially invented the field of legal data science.
The legal market and world in which it operates is changing rapidly. No longer can the General Counsel at a corporation tap their friends for outside counsel work.”
Goyle pointed out that he is married to an equity partner at Proskauer Rose LLP, the global law firm founded in 1875, now with 700 employees spread across thirteen offices. Goyle explains, “we understand the pain of the firms and the law departments; the C-suites at corporations are now expecting their law department to function as a business, and transparency is needed. Zero-based budgeting is where major corporations are heading, so no longer can the General Counsel run his department as a black box.”
Goyle pointed out an anachronistic aspect of the law. Whereas basic economic theory posits that only in a monopolistic market does the supply side set the price, “in the law for 50 years you have had a massive supply pool, but price is still set on the supply side.” In other words, law firms were successful in setting and raising prices for decades.
Bodhala’s insights empower in-house legal departments to accurately forecast legal spends and evaluate potential outside representation for significant matters, without bias. Simultaneously, Bodhala allows law firms of all sizes to compete for available business on the merits of performance, not relationships, and effectively plan for the new world of value-based pricing. With the data available to the law firm, the firm can present empirical data supporting the firm’s value to the client. And it is data which allows in-house corporate legal departments to analyze and visualize their needs, and optimize their expenditures. For eons, the General Counsel could only look at invoice, with no ability to apply analytics to uncover anomalies or inefficiencies.
As a former General Counsel, I recall receiving one page bills from a white shoe law firm that essentially stated “monthly services rendered, total $78,000.” Even as a fresh faced law school graduate years earlier, my law firm monthly time sheets ran to four pages of detail. But that analog invoice was not readily mushed into a pile of data from which insights could be drawn.
Today Bodhala can lay such an invoice into a huge data set which tracks 5000 law firms and millions of matters, to establish baselines and readily identify outlier activity. Of course, a mountain of data does no one any good; it is Bodhala’s analytics which gives Goyle confidence in the continued growth potential of his company.
Bodhala’s business model is SaaS (software as a service), with an annual subscription based on volume. With clientele on both sides of the equation, Bodhala is able to look at both buyer and seller data, and thereby enhance the product. The classic network effect is a positive consequence.
Goyle pointed out that lawyers love to see their work as bespoke, but the company’s pattern analysis melts that snowflake mentality. As to the company’s ongoing hurdle of skepticism, Goyle sees the ongoing changing of the guard as smoothing the existing speed bumps (my mixed metaphor, not his). He also mentioned that the investor community has been leery of the law as the industry is slow to adapt.
But the law has always been slow to change, and that is perhaps the essence of precedent. Many observers agree that technology leads, a business model follows and the law tries to catch up. Evidence of that progression is everywhere, from the invention of the videotape recorder (the studios went to the Supreme Court to battle Sony’s Betamax, a fight the studios are glad they lost) to the innovation of MP3 (which the record companies tried to litigate out of existence, only to lose years and customers in a debilitating battle of Whack-A-Mole until Spotify emerged).
But in the case of the business of law, the half trillion dollar market is overdue for disruption.
Bodhala is helping lawyers with their white shoes and heads in the sand.