Data analysis has become commonplace in our society. Even the most analog of us have been exposed to it in popular culture, from books/movies like “Moneyball” to apps like Pandora that can present a playlist of different groups based on a single artist you’ve chosen. The thrust of this number crunching is always the same: to do what we’ve always done, but do it better.

Now it appears that data analysis is finding its way into an offshoot of the legal industry that has been steadily growing over the past fifteen years: lawsuit funding. An article in the National Law Review (link below) details the startup Legalist, which uses an algorithm to identify promising civil lawsuits to finance in exchange for a portion of the settlement or judgment.

These lawsuit funding companies are looked down upon by many in the legal industry as scavengers trying to make a buck off injured plaintiffs by inserting themselves into a case and throwing off the typical dynamic in an attorney-client relationship. Detractors also contend that such companies make cases more difficult to settle, by providing monies that may give a plaintiff a false sense of confidence. The contrary points are that such companies can provide an efficient allocation of capital to an arena which rarely sees it, and allow a plaintiff to get a just result when dire financial straits would dictate otherwise.

Whatever your feelings about the practice, after fifteen years it appears it’s here to stay. And if companies are applying the latest in technology to provide funding for cases with potential big payouts, the typical defendants in high-target litigation areas should prepare themselves for a changing landscape in the next couple years. The big question to ponder for the future, though, is this: when will Big Data funding companies begin to provide financing to actually initiate lawsuits, and are there any future defendants who will someday see a significant expansion of litigation against them?