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Another application caught in the web of 2.0: online prediction markets for law departments

Another Web 2.0 application that might be tried by an internal legal team can be added to the nine already identified (See my post of Feb. 1, 2009: 9 applications; and March 16, 2008: Web 2.0 applications.). The tenth is an online prediction market (See my post of Feb. 16, 2006: collective prediction markets; Sept. 13, 2005: an early version of a shared prediction market; Dec. 20, 2005: online futures market for litigation; March 17, 2006: internal “markets”; Jan. 23, 2008: aggregate the wisdom of crowds; and May 6, 2009: alternative fee negotiations.). As described in the McKinsey Quarterly, No. 2, 2009 at 67, a prediction markets “harnesses the collective power of the community and generates a collectively derived answer.”

Unknowns law departments face could lend themselves to an anonymous investment system where the “winners” receive either recognition or rewards. One example is the likelihood of a major business reorganization that would pressure the legal team to reconfigure (See my post of June 15, 2008; alignment with clients with 16 references.). Another use of a prediction market, more far-fetched, would be an information pool on which law firm will come out best in the department-wide evaluation process. If done after evaluations are submitted, that output of collective intelligence corroborates the more formal process.

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