By Mary Brennan Stich, VP and Associate General Counsel, Rackspace Hosting
In my current role as VP and Associate General Counsel for Rackspace, and previously as Deputy GC at Akin Gump and Associate GC at Clear Channel Communications, I have come to realize that our in-house clients, the business decision makers, want predictability in litigation. As in-house lawyers, we conduct thorough and early case evaluations, negotiate budgets, research comparable disputes, and look for other markers that add something to the valuation and predictability mix. Early resolution is often a good outcome for everyone involved in a dispute. Depending on the case, it can be a tremendous cost-saving strategy, not only in external counsel costs but also time and distraction within the business. A negotiated outcome also gives the business an opportunity to take some control over the dispute and drive the issues toward a strategic business objective. How can an in-house lawyer best position a case for a strategic win in the negotiations? Consider the case for taking for a more data-driven approach.
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The rise of big data and predictive analytics is now part of practicing law. And in-house counsel are early adopters because these technologies are already being used on the business side of our companies. There are now technologies that help us estimate costs in a given matter, plumb intellectual property data sets for valuation markers, and now predict the course of negotiations and formulate strategies around those forecasts.
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[W]e had Picture It Settled on our side, and it definitely played a pivotal role in helping the case settle.
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This data-driven tool was incredibly valuable.
Picture It Settled predicted the settlement’s final outcome within 6.6% accuracy after just two moves per side. This improved to 3% accuracy after round three. Even the estimates of the next moves by both sides in dollars and time were very precise. In fact, the individual dollar move projections for plaintiff and Rackspace both were on average within 3.5% of the actual moves, except for one opening offer by our side and the wind-up offers.
The results produced by Picture It Settled were extraordinary, providing clear evidence that metrics and analytics can be extremely accurate and predictive as a complement to experience, instinct and intuition which are usually a litigator’s primary tools. Frankly, the fact that Picture It Settled showed a reasonable chance of settlement kept us at the negotiation table longer. The analytics and graphs it produced gave us a reason to believe it was worth staying the course; it kept us in the game. We ended up closing a case that we thought had a very low chance of being resolved by agreement.
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I predict that any GC’s office that discovers this technology will recognize its unique value and will find it to be a great tool to assist us in evaluating cases, and planning and executing negotiation strategies. It doesn’t replace well-honed intuition, experience and gut reactions. But it does allow us a data-driven way to test our intuitions against thousands of historical cases. This tool is worth a test-drive on your next case.
The full Rackspace case study is available here: Picture It Settled® Provides Rackspace with Highly Accurate Predictive Analytics to Help Settle High-Value Longshot Mediation
As a lawyer, a district judge and now as a mediator for many years now, I have always sought out useful technology tools to make the process work better. I have seen parties use static Excel spreadsheets and midpoint analysis to try to project settlement numbers, but the negotiation process is much more sophisticated than that.
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Picture It Settled® is predictive analytics for negotiation, and it derives its power to predict moves and outcomes because Don [Philbin] collected deep data from over 10,000 cases and had them entered into the system. And the more cases that Picture It Settled® learns from, the smarter and more powerful it will become.
Having known Don for years and being intrigued by Picture It Settled®, I invited Don into my classroom to show us how the technology worked. Coincidentally, I had recently mediated an IP case in the Eastern District of Texas in which the Plaintiff’s original demand had been $29 million and the Defendant’s original offer was $450,000. The case settled at 7pm for $8 million after 17 painstaking rounds of negotiation.
Don entered the negotiation moves from this case into the Picture It Settled® online interface live for my class and the software began to show a graphical representation of the potential settlement territory. By only the 2nd round, Picture It Settled® predicted a settlement in the $9 million range, which was only off 3.5% of the $28.55M spread at the time, and the software nailed it in 2 rounds instead of 17! Of course, Picture It Settled® tightened its projection even more as we entered additional offer information. It was truly magical, fascinating – I realized that this tool could be helpful for a broad spectrum of cases.
Picture It Settled® is an incredibly useful tool that will become increasingly powerful as more case data is entered to make it even more intelligent. Any negotiator who wants to be prepared needs to have a tool like this. You can rely on your instincts and experience, but that will only take you so far. This software gives you a better ability to predict which way a case is headed. Whoever uses Picture It Settled® will have a clear advantage over the other party. As a mediator, it will help me keep energy in the process and keep parties at the table longer.
Lawyers have a tendency to be concerned that technology is going to replace them, but that is an unfounded and unwarranted concern with Picture It Settled®. This is a tool to help lawyers and mediators do their jobs better and faster. The psychology of negotiation and mediation will remain the same but the software will help guide the outcome to be more streamlined and advantageous to those who use it.
Picture It Settled® is fascinating and very exciting technology. There will come a time when everyone will be using it!
The full Pryor case study is available here: Discovering Picture It Settled®, Breakthrough Predictive Analytics Software for Negotiation by Will Pryor