Interest in alternative data sets has exploded in recent years as investors scour the world for relatively obscure numbers that may offer insights overlooked in standard economic releases. Some of these figures are genuinely useful for developing an edge in trading and portfolio design, but there’s plenty of junk, too. Accordingly, caveat emptor applies when it comes to new and often untested economic and financial indicators. One intriguing set of benchmarks that’s caught our attention comes by way of LegalShield, which sells legal services products. The firm also publishes several alternative economic data sets, including the LegalShield Real Estate Index. In early February, the company issued a press release that noted that this so-called leading indicator was predicting weakness for existing home sales. A few weeks later, the official January sales report did in fact reflect a decline, according to the National Association of Realtors. One accurate forecast could be luck, of course, but Legal Shield’s data is certainly worthy of a closer look as a potential source of deeper perspective on economic trends. For some context, The Capital Spectator posed five questions to James Rosseau, Legal Shield’s chief commercial officer, about the firm’s alternative economic benchmarks.

You recently launched several indexes that use alternative data sources for measuring trends in a number of US economic sectors. What are the indexes and what sectors of the economy do they target?

Debuting in May, the LegalShield Law Index is made up of five indices: the Consumer Financial Stress Index, Housing Activity Index, Bankruptcy Index, Foreclosure Index, and Real Estate Index. Each index depicts the health of the US economy using LegalShield’s unique and proprietary database of member demand for and usage of legal services. The five LegalShield indices closely track a handful of key economic indicators, such as the Consumer Confidence Index (developed by the Conference Board), housing starts (reported by the US Census Bureau), and foreclosure starts (reported by the Mortgage Bankers Association). LegalShield publishes the Law Index monthly, on the sixth business day of each month.