By Cristoforo Karageorgis.
“The biggest problem in communication is the illusion that it has occurred.”
– George Bernard Shaw
If a lawyer tells you that you have alikelychance of being successful in a dispute, what probability would you assign to such a claim?
Or consider this: if you were told that between the gain of £ 500,000 and the loss of £ 100,000 you were “more likely to win than to lose‘, would you take this risk? If not, would you settle for a lower amount? If so, for how long?
The problem with using words to evaluate legal disputes is that lawyers often use vague terms like “likely‘,’likely‘or (of particular relevance for the English legal system) the ubiquitous’reasonable‘to express your opinion on the likelihood of success. Consequently, decision makers, be they clients, investment committees or board members, are left with the unenviable task of interpreting these ambiguous assessments. This invariably leads to poorer communication problems and decision making.
To support this, a 2020 study conducted by the UK government (see Fig. 1) asked thousands of respondents from across the country to describe on a scale of 1 to 10 the likelihood of something happening using various words or phrases. . Taking the floor ‘likely’ for example, while the results showed that on average it was thought to be about 6.65 / 10 in terms of probability, some people believed it was a 4/10 probability of something happening and others a 9/10 probability.
Similarly, in trials conducted with lawyers who were asked to assign a percentage probability range to the sentence ‘it is very likely that we will win‘, some assigned a 60-75% probability while others believed it was 85-100%. What is even more troubling is that on several occasions these extremely different views have been expressed by two partners from the same law firm who have often worked together on the same cases.
The results show that qualitative assessments can be very misleading as their meaning is subjective, i.e. based on the thoughts and feelings we attribute to them at any given time.
So what’s the solution?
Quantitative analysis allows us to accurately measure the probability of an event occurring by taking the unsystematic method of using words and replacing it with a number system that we all know. It offers little chance of misinterpretation. In doing so, legal professionals are in a better position to create a better understanding of the key issues in a dispute, and clients are in a better position to evaluate the advice and decide on the next steps.
… But isn’t it more risky?
We lawyers are risk averse by nature and we can all appreciate that there is little room for error in a career that depends on the accuracy of your advice. However, as highlighted above, the use of words already carries the risk of poor communication with the customer, which can lead to the failure of one of the key competences of legal soft: managing customer expectations. This in turn can lead to bad decisions and risks destroying the most valuable thing of all for a lawyer: their relationship with a client.
Contrary to being more risky, for quantitative analysis to work well, it requires a much more thorough analysis of the facts in order to attribute a percentage or decimal value to the probability of success. Simply put, explicit and detailed explanations of probabilities and risks will lead to a better analysis.
Furthermore, legal professionals already express a percentage range (albeit subjective) when they use words to evaluate disputes. In describing the chances of success in litigation, a lawyer will have their own opinion as to what percentage range would equate to when questioned.
So, using numbers instead of words, all the legal professional is doing is quantifying the word they would usually use to describe the chances of success in a given case. Of course, the usual warning for customers applies: establish the ‘known strangers‘in any assessment and notice that this may change as the dispute progresses.
“The goal shouldn’t be to make the perfect decision every time, but to make less bad decisions than anyone else.” – Spencer Fraseur, “The Irrational Mind: How to Fight the Hidden Forces Affecting Our Decision Making”.
Ultimately, being a lawyer is more than just advising clients. An attorney must understand the risk, the likelihood, and the full range of potential outcomes to effectively advise a client.
We at Eperoto solve all these problems with our online tool which encourages legal professionals to use quantitative decision theory to model their disputes through what we like to call a “legal tree‘. The legal tree is built branch by branch, with lawyers exposing the legal issues that could be tried in a given controversial matter. The tests are analyzed in the usual way and all possible results must be considered.
However, instead of measuring the probability of success of any legal matter, a percentage probability is entered at the end of each branch (or ‘node‘). Careful consideration of the likelihood of each possible outcome results in a deeper understanding of the case. The numeric output (known as’weighted value‘) at the end of each branch, provides a much more accurate reflection of the chances of a result going in a certain direction. The weighted values can then be combined to produce an estimated monetary value (or ‘EMV‘) which, after taking into account other uncertainties such as the awarding of probable costs, interest, insurance and bankruptcy / enforcement matters, more accurately reflects the value of the claim.
As I hope I have pointed out above, the use of words to evaluate legal disputes can lead to misunderstandings between the parties with disastrous consequences. When someone says’likely‘, one might understand a 55% probability, another a 75% probability. Extrapolated to multiple complex analyzes in a single statement, this will invariably lead to poorer decisions about how best to proceed with matters.
Quantitative decision making is already practiced in industries where accurate decision making is absolutely critical: public health services, investment banking, and government offices like the CIA, for example. Although some lawyers around the world already do similar analyzes (although they do them in a more cumbersome and time-consuming method via manual calculations in spreadsheets), there is no reason why quantitative analysis shouldn’t become the default metric in an industry where a good decision is also absolutely crucial.
I am a lawyer too, I would say that the law and the language that surrounds it are so complex that it already requires a professional to interpret them. So, let us free ourselves from any further need to interpret what is already an interpretation.
It is time for the law to pass from the poetic to the scientific.
… having said that, while reviewing this article, my partner advised that it was “well‘, and I didn’t ask any more questions, a rare case where you might prefer a qualitative analysis and do what you want with it. A solid 8/10 is then!
[This was an educational think piece for Artificial Lawyer by Christopher Karageorgis, Director, Eperoto.]