Legal tech has evolved in recent years, brought about by the development of more AI tools for automating and optimising various legal tasks, particularly contract analysis, document review, and, in some cases, case prediction.
But at the heart of every AI-driven solution lies the quality and accuracy of the data used to train machine learning models. And here lies the rub: Legal tech companies often deal with unstructured documents, where the essential data points do not adhere to a predefined data model. As such, data parsing is a critical component of any legal tech’s earlier core operations.
Data parsing encompasses a range of sub-processes, including extraction, organisation, and structuring of legal data from diverse sources such as contracts, case law, and regulatory documents. By parsing data, legal tech companies can improve the efficiency and effectiveness of their machine-learning models, particularly when dealing with sparse, noisy, or variable-quality data. This enhances the signal-to-noise ratio, improving the overall quality of insights derived from the data points.
However, developing an automated data parsing system from scratch can be prohibitively expensive, time-consuming, and complex, especially for startups that have not yet achieved product-market fit. Investing in such a system prematurely can drain valuable resources and divert attention away from more critical areas of tech development.
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Offshoring data parsing offers an attractive alternative that allows startups to progress towards their next milestones without heavy upfront investment in time and cost. Here’s how offshoring can benefit your startup:
- Domain knowledge incorporation: Unlike building an automated system, it is easy for your domain experts to incorporate their knowledge into the data parsing processes, building a model for more informed feature engineering decisions should you pursue automation later down the road.
- Gradual scaling: Offshoring enables startups to start with a small piece of the data parsing process and gradually scale up as business needs and market demands evolve. This incremental approach allows for flexibility and adaptability, ensuring that resources are allocated efficiently.
- Lower to no setup cost: The initial setup costs for offshoring are typically minimal, often limited to security deposits that offshoring companies require before commencing services. These deposits are usually equivalent to one to two months of service fees, making offshoring a cost-effective option for startups with limited resources.
- Ease of protocol changes: Offshore labor offers greater flexibility in adapting to changing protocols compared to automated systems. Manual processes can be adjusted more easily to accommodate evolving requirements or new data sources, providing startups with agility in responding to market dynamics.
- Cost efficiency: Offshore labour tends to be significantly cheaper than hiring onshore resources, allowing startups to grow their teams cost-effectively. This cost efficiency enables startups to allocate resources judiciously and invest in areas that drive value and innovation.
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Overall, while machine learning models may have demonstrated early impressive capabilities in learning directly from unstructured data, data parsing in the legal tech industry remains essential in preparing the data for machine learning tasks. However, automating data parsing systems may make more financial sense in larger, more mature organisations; for early-stage startups grappling with the pressure of efficiently allocating working capital, this approach may not be as effective.
Offshoring your data parsing work can serve as your startup’s secret weapon, particularly in the early stages of your tech development. By partnering with offshoring companies such as FullSuite, you gain access to resources and benefit from their oversight of protocol and process development, alleviating the burden on your lean team and allowing you to focus on what matters most.
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This article was first published on March 5, 2024
The post Why offshoring your data parsing processes could be your legal tech startup’s secret weapon appeared first on e27.