Predicting Litigation Risk based on Company Reviews
all reviews including comments on pros and cons
Daniel Lee
October 26, 2019
Major findings
- The larger the company, the greater litigation risk is.
- The extent of litigation risk is likely higher for some industries than others.
- Not sure whether company reviews can be used as a predictor for litigation risk.
Future Research
- Add data on the type of lawsuits.
- Increase the accuracy of the lawsuits data. The number of lawsuits was capped at 5,400. In other words, the number for some companies may be a lot higher. This may have reduced the accuracy of the results.
- Increase the number of companies. 71 companies may not be large enough.
Companies in the analysis
The subject of this analysis was 71 health care companies publicly traded in the New York Stock Exchange (NYSE). In the previous report of the last year, we identified good and bad companies. See file:///C:/Users/sclee1/OneDrive/Documents/R/legalAnalytics/companies.html.
This past report used the data on market capitalization and industry classification imported using tidyquant::tq_exchange(). Unfortunately, the tq_exchange() is currently out of commission (a common problem working with website. The code has to be constantly updated to keep up with the changes in the website). As an alternative, the same data was manually collected from Yahoo Finance. The market capitalization should be nearly identical. However, the industry classification appears to be more granular in Yahoo Finance than in New York Stock Exchange (NYSE). When and if tidyquant::tq_exchange() is updated, I will likely go back to the data from the NYSE.
Implort and clean data
Three major data sets
company reviews: they are reviews by employees and scraped from indeed.com (55,796 reviews)market capitalization: manually collected from Yahoo Finance on October 26, 2019industry: manually collected from Yahoo Finance on October 26, 2019lawsuits: they are number of lawsuits for all 71 companies since 2010 and manually collected from the PACER database. Companies were searched in the following criteria.- Party: company name (Companies were often searched with something shorter than the company’s full name because they are listed with slightly different names: i.e., Amedisys, Inc., Amedisys, Inc, Amedisys, Incorporation)
- Party Role: def, dft
- Court Type: Civil
- Date Filed: 01/01/2011 to
Company reviews
Frequency of lawsuits
Market capitalization data
Merge data
Explore data
The most common words
Correlated word pairs
Words are filtered so that only ones that appear at least 200 reviews are included in the analysis. The plot shows that the terms, “life” and “balance” appeared together often and companies with the word “balance” in their reviews have been sued very frequently.
Regarding which pairs of words are associated with higher and lower litigation risk, it’s important to recognize that the company size likely plays a role in the extent of litigation risk. See two word correlation plots below: the first one with number of lawsuits and the second one with number of lawsuits per million dollars of market capitalization. The second plot that controls for the company size makes more sense. For example, it’s odd in the first plot that positive word pairs like life-balance and advance-opportunities are associated with higher risk, while negative word pairs like poor-managment, overworked-underpaid, and short-staffed are associated with lower risk. In the second plot after controlling for the company size, they all turn to correct color. A few words still appear to have wrong color but they are not dark. For example, a positive word pair, flexible schedule, is red, but it is not dark enough.
top 140 pairs of correlated words
top 130 pairs of correlated words
top 120 pairs of correlated words
top 110 pairs of correlated words
top 100 pairs of correlated words
top 90 pairs of correlated words
top 80 pairs of correlated words
| item1 | item2 | correlation |
|---|---|---|
| paced | fast | 0.6933951 |
| fast | paced | 0.6933951 |
| balance | life | 0.6846081 |
| life | balance | 0.6846081 |
| offs | lay | 0.6218114 |
| lay | offs | 0.6218114 |
| reimbursement | tuition | 0.6206975 |
| tuition | reimbursement | 0.6206975 |
| manner | timely | 0.5589087 |
| timely | manner | 0.5589087 |
| typical | day | 0.5330598 |
| day | typical | 0.5330598 |
| values | core | 0.5233267 |
| core | values | 0.5233267 |
| hardest | enjoyable | 0.4766985 |
| enjoyable | hardest | 0.4766985 |
| breaks | short | 0.4194362 |
| short | breaks | 0.4194362 |
| lunches | free | 0.4095808 |
| free | lunches | 0.4095808 |
| bottom | line | 0.4087006 |
| line | bottom | 0.4087006 |
| service | customer | 0.4058917 |
| customer | service | 0.4058917 |
| hardest | job | 0.3684037 |
| job | hardest | 0.3684037 |
| 401k | match | 0.3633050 |
| match | 401k | 0.3633050 |
| staffed | short | 0.3585422 |
| short | staffed | 0.3585422 |
| basis | daily | 0.3582085 |
| daily | basis | 0.3582085 |
| overworked | underpaid | 0.3549756 |
| underpaid | overworked | 0.3549756 |
| enjoyable | job | 0.3248944 |
| job | enjoyable | 0.3248944 |
| unrealistic | expectations | 0.3151394 |
| expectations | unrealistic | 0.3151394 |
| pace | fast | 0.3150040 |
| fast | pace | 0.3150040 |
| hardest | learned | 0.3123261 |
| learned | hardest | 0.3123261 |
| typical | enjoyable | 0.2949296 |
| enjoyable | typical | 0.2949296 |
| hardest | typical | 0.2948918 |
| typical | hardest | 0.2948918 |
| free | lunch | 0.2895217 |
| lunch | free | 0.2895217 |
| hardest | day | 0.2822629 |
| day | hardest | 0.2822629 |
| human | resources | 0.2751606 |
| resources | human | 0.2751606 |
| entry | data | 0.2745138 |
| data | entry | 0.2745138 |
| policy | door | 0.2744139 |
| door | policy | 0.2744139 |
| shifts | hour | 0.2737333 |
| hour | shifts | 0.2737333 |
| rate | turnover | 0.2674345 |
| turnover | rate | 0.2674345 |
| executive | director | 0.2660610 |
| director | executive | 0.2660610 |
| phone | calls | 0.2659880 |
| calls | phone | 0.2659880 |
| procedures | policies | 0.2619933 |
| policies | procedures | 0.2619933 |
| enjoyable | learned | 0.2617130 |
| learned | enjoyable | 0.2617130 |
| options | stock | 0.2607409 |
| stock | options | 0.2607409 |
| enjoyable | day | 0.2551131 |
| day | enjoyable | 0.2551131 |
| patients | patient | 0.2495514 |
| patient | patients | 0.2495514 |
| residents | resident | 0.2422613 |
| resident | residents | 0.2422613 |
| week | days | 0.2404221 |
| days | week | 0.2404221 |
| mandatory | overtime | 0.2395251 |
| overtime | mandatory | 0.2395251 |
Predicting litigation risk (measured by number of lawsuits) based on employee reviews
A lasso model was built to predict the extent of litigation risk based on employee reviews. The model also controls for the company size and the industry that it is in. The data exploration above shows significant relationships between litigation risk and the company size. So is between litigation risk and the industry.
A primary purpose of this analysis to see whether it’s possible to predict the litigation risk using employee reviews. In other words, it is to see whether individual words in employee reviews have any predictive power. A challenge there is that there are thousands of words in the reviews, which presents a problem for a simple regression model. Lasso model is an ideal alternative when there are many predictors and so multicollinearity among predictors likely exists. Lasso regression chooses an optimal number of predictors in a way that minimizes the mean squared error.
The model explains about half of the variations in the number of lawsuits. The plot below also shows most of the variations in the litigation risk is explained by first 100 predictors (including market capitalization and industry dummies). 
The term, warehouse, is associated with increased litigation risk. Every use of warehouse in employee reviews increases the litigation risk by about 200 lawsuits since 2010. On the other hand, the word, teammates, is associated with decreased risk by more than 600 lawsuits.
Diversified Industrials is shown as the riskiest industry. Being in this industry increases litigation risk by 2,000 lawsuits. However, this may be a noise because of the small number of companies/reviews in the industry. 3M is the only company in the Diversified Industrials Industry. On the other hand, Medical Instruments and Supplies appears to be the least risky industry.
Full reviews that contain the most influencial words.
See below for actual full reviews that contain the most influencial words on litigation risk: “teammates”, “machine” and “warehouse”.
## [1] "3M is a great place to work. The people I worked with are like family. The company is small enough that you truly get to know teammates at different locations.Great environment as you will quickly notice the synergy between the customers and employee's. The customers are treated like family and you really get to know the clients you work with which is a rarity these days.The challenge is not having enough foot traffic coming through the doors. You have to be creative to come up with ways of hitting your sales goals. You really need the entire staff to accomplish Branch goals.They went through a massive lay off recently which is a bummer when you left a company working many years to build a career."
## [2] "Great place to learn and improve your skills, good teammates, I like the methods that I have learn in my years of service, such as, Kaizen, 5S, ect. learning, experience. plant might go overseas."
## [3] "I enjoy working at Abbott. Good work culture and great teammates. A bit of travel involved in my current role but the flexibility of not working at the same location everyday is very attractive. Great benefits. Benefits Sometimes stressful due to workload."
## [4] "I monitored six different XenApp 6.5 farms. Two in Lake County Illinois, One in Ireland, Germany, and Singapore. the other farm was for testing and development. I also watched over five different XenApp 5.0 farms and assisted with L3 service tickets when users had any problems.I learned a lot about managing a Citrix farm in a very large organization. Updating incident reports, making change requests, Root Cause Analysis and working in what they called a War Room when a high priority incident was reported.Management liked the learn as you go method. Everyone had a well-defined role and only your teammates knew that role. If you needed some help with a multi department problem. Many times you didn't know who to talk to.Wipro took over network management only a year ago so it was very difficult to understand the design of the system and where anything was located. The job was self-managed, I was able to set my own hours and to set my own priorities. I had a small and quick daily report that had to be completed on time. there was no overtime or weekend work requested. Self-managed Difficult to fit into the organization due to the India culture."
## [5] "Great company. Of course, management skills vary and as companies are acquired and added to their portfolio the culture changes.I came from Solvay Pharmaceuticals, which was a fantastic family owned company and culture. That culture was something Abbott really wanted to see more of in their own culture. Unfortunately blending cultures, philosophies, operations and employee directives is difficult, and employees are left trying to decide which ones to follow to remain employed in pharmaceutical sales. How to log your calls seems to be a tightrope act, for example. Conflicting expectations and directives forced you to \"\"play games\"\" as a rep, and it was a very uncomfortable position to be put in.Other than that, the rep job is a difficult one. You are force ranked against your teammates for bonus compensation, and conditions vary widely across the country. This helps the organization control their bonus payouts, but not motivating for a sales force at all. Also, industry regulations have made this job incredibly difficult; having meaningful interactions with physicians is rare, however they are expected every 2 weeks. Until pharma companies \"\"get real\"\" about the conditions the reps face and adjust the expectations accordingly, this will be a job that tests your integrity every day. And, you will fail that integrity test if you want to remain employed. benefits, company, people, pay, culture compensation structure, industry pressure, unrealistic expectations"
## [6] "I got my first experience launching a product at Abbott. Omnicef was a new antibiotic. I enjoyed meeting with multiple pediatricians and influencing them to prescribe this to their patients. The results were fantastic, as I was able to open up my market, and then grow it quickly. I did have other medications in my portfolio as well, which changed from time to time depending on the product mix of my team. I did enjoy working with my co-workers, especially one counterpart who was an extremely hard worker. I did find, however, that there was little oversight over some of my teammates, and I spent a good amount of time working to influence them to work harder.. Product launch experience, Introduction into the pharmaceutical market Lack of upward mobility"
## [1] "good pay for the area! a very good company with good products ! management is horrible! most do not follow company core values :( by managment i mean Team leaders,supervisors,product managers. It seems like the less senority you have the more you move up it doesnt matter if one has a college degree or lazy. so sad because 3M needs to get back to the old way of doing things Great benifits Management"
## [2] "After I interviewed and started at 3M I was very excited about my new position. I had multiple offers from different companies but chose this one based on the strong coprorate ethics and core values. That said, my love for my job and clients never changed but the culture is no longer the way it was when I selected the position over other great opportunities. I am not sure if it is the changes to leadership or the decrease in revenue at 3M overall but it has changed dramatically. That is unfortunate considering how it was when I was hired."
## [3] "Commitment to improving workplace culture; eager and ambitious workforce; long history of profitability; strong product diversification; relentless drive to achieve customer at the core thinking"
## [4] "I worked at 3M-Knox for three Summers for the Employee's \"\"Son's and Daughter's\"\" Program.You learn so much within the orientation: Safety, Safety, Safety, Shipping, Receiving, Production, and Safety. Once in, you are assigned a machine and you are the 'X operator assistant.' This means you will help perform job tasks whether it be splicing tape, packing/shipping orders to making cardboard boxes. Other jobs might include cutting cores within the nerve center or helping another special department.A typical day starts DIRECTLY on time. This can cause a rift coming from school, but it did not directly affect me. Safety is stressed throughout the plant on a regular basis, and a lot of the certification is paid for. Basic workplace annoyances can occur, but if you keep to yourself and do not disclose politics or religion everyone will get along. Given the knowledge you gain in those summers, you also learn about the compensation of the employees and how you can learn new 'jobs' through the bids throughout your tenure. Benefits, Steady Short Breaks, Ot"
## [5] "WON is no longer focused on its core competency of technical analysis. Its trying to compete with the big investment advisors that use fundamental analysis. Management is losing its direction because of this."
## [6] "Very Diversified company. Polaris project is global initiative with SAP full suite implement ion so had chance to learn so many cross functional modules along with my SAP -TM/LE core expertise."
## [1] "The pay starts and increases way above industry averages. You do work hard for it. And there is a meeting at the beginning of every month that reminds you of this. There is usually a lot of voluntary overtime. Sometimes overtime is scheduled (“forced”). However, there are 6 chances to get out of it during the year. The supervisors are usually former warehouse operators or people with degrees in history or music. They are your basic paper pushing, lackluster, lack of personality supervisors that come down from their air conditioned/heated offices just to tell everyone to work harder. There are more SOPs for the boxes than there should be. You damage a box of sponges, you can get written up or even suspended. They spend a lot of time on paperwork for these boxes. The productivity requirements are set but nobody knows how it is measured. You just work everyday and stress about it until the end of the month. You’ll get a verbal and written notification of not meeting it. Then around 530am (if you work 3rd shift) you’ll get your name called on the pa system to either call one of the supes or to call the training room. If your name is called around this time at the beginning or end of a month you and everybody else knows that you’re about to get walked out on either a suspension or termination. For those of you who haven't worked here in a while...those 3 day suspensions are no more. Also, and the worst thing to me...no free coffee. Good pay. Great benefits. Occasional free lunch Management. Excessive SOPs. Work/life balance. No free coffee."
## [2] "Great experience. I look forward to coming to work every day because I like how they treat the employees. 3 m is a big warehouse that has many different products"
## [3] "Early mornings with welcoming people. Productive long days. Employees are willing to help each other. Supervisors give positive feedback. Safety is mandatory in the warehouse."
## [4] "HR is amazing but l seriously hope that they will come inside the warehouse more often to see what’s really going on with MGMT. Allorders are in a timely manner and if you don’t put the order in a certain form, than it takes you longer to finish the order and that’s a point and if you get an error that’s another point and God forbid you say hello to someone when a Sup is passing by, that’s another point and your out the door. Good pay checks Mgmt are seriously strict"
## [5] "One of the best warehouse jobs to have with not many but some small opportunities to advance. Starting hourly pay is good at $17, and you can make as much as $21 before a year if you're able to change job grades. Even if you don't change job grades, by the end of the year you top out at nearly $19. Lots of OT to supplement your income. I was once paid triple time for voluntarily working on a holiday (black Friday). Some of the managers aren't the brightest and apparently think too highly of their position. One of the three supervisors on my shift seemed to think his sole responsibility was to get people in trouble. Can make a good annual income and they hire entry level, benefits are active as of day one, lots of OT but they are flexible 5 day a week job at the minimum, have to be buddy-buddy with management to advance, OT depending on how you look at it"
## [6] "The pay is very competitive with excellent benefits. The warehouse environment is extremely fast paced with high expectations. Management in my building is fair and open."
## [1] "good pay for the area! a very good company with good products ! management is horrible! most do not follow company core values :( by managment i mean Team leaders,supervisors,product managers. It seems like the less senority you have the more you move up it doesnt matter if one has a college degree or lazy. so sad because 3M needs to get back to the old way of doing things Great benifits Management"
## [2] "My experience with 3M was nothing short of excellent. I started as a forks technician, they paid my tuition to become an engineer, and themI was promoted to one. After that I had several fantastic managers and also wonderful opportunities. Based on my experience, I highly recommend this company Advancement depends on individual Done management variation in competence"
## [3] "3M in Columbia is a great place to work. The benefits are really good and almost all of the employees are easy to get along with. The managers are fantastic!"
## [4] "I am a contract worker. I love my job at 3M. The office environment is casual, you work with hardly any supervision, you are assigned a manager you report to. You come in and do your job as expected and at the best of your ability. I have so much since working here. Alot of office and computer systems, along with refreshing my skills that I already have experience in. The people at 3M are great, and willing to help in anyway possible for you to succeed in your position while working there. They are very flexible and work with you in any way they can."
## [5] "3M is a good company when I started they were a family oriented company now it is just business to upper management. But the people you work with are excellent and very knowledgeable My manager was a Business Processing Manager and he knew everything about processes and computer software programs. flexible hours and no micro managing People having pets and judgemental"
## [6] "3M is a great place to work. Work can be fast-paced but work-life balance is fine. People are nice and all the managers I worked for have been great. They encourage you to switch jobs and I have held 2 different jobs in my 8 years there."