Starting to build a set of data and finding ways to use and analyse you firm’s financial and legal data is a nobrainer. Now let’s take a closer look at how to create value from the use of that data.
I am writing this series of blogs to help pioneering lawyers, analysts and business developers convince their peers of the importance of the use of data.
Creating value today
Let me quote the McKinsey report “Big data: The next frontier for innovation, competition, and productivity” again:
Simply making big data more easily accessible to relevant stakeholders in a timely manner can create tremendous value. […] In manufacturing, integrating data from R&D, engineering, and manufacturing units to enable concurrent engineering can significantly cut time to market and improve quality.
There are two value drivers behind this quote. The first is to share data with your stakeholders. Relevant stakeholders in a law firm are your employees and, obviously, your clients. Not being transparent on the progress of your matters and the related fees is the number one irritation of clients. Actually, 26% of client disputes relates to transparency issues. This is something you can tackle, starting today. Manage expectations on fees realistically and keep all stakeholders, employees and clients alike, informed on progress of the matter and the fees. Done well, lawyers can really Wow their clients. And happier clients help you make more profit. More on that in a later blog.
The second is to use this data to break down matters to see what work is done by whom. This will help your legal project managers to identify which work you can paralellize and group to speed up matters and improve quality and consistency. Proper legal project management can add tremendous value in optimizing processes, but it is hard to manage something if you do not have data to back up your decisions.
Analysing big data, you can find causes for inefficiency and measure the results of experiments to improve efficiency.
“[…] IT enables organizations to instrument processes and then set up controlled experiments. Using data to analyze variability in performance […] and to understand its root causes can enable leaders to manage performance to higher levels.”
If you set up proper experiments, you can find the causes why some matters go south, in terms of outcome and in terms of fees. By finding and analysing these causes, you can reduce variability in and increase predictability of outcomes. A lot of this data can already be analysed today, as there is a lot of uncovered information in your time tracking database.
Lay foundations for tomorrow
Not all data creates value right away. By building the right data sets, you can lay the foundations for value creation of tomorrow. Areas to start with may be:
- outcomes of litigation cases,
- collecting budgets and results, or
- M&A parameters such as deal value, target revenue, jurisdictions involved, claims received afterwards, pages of reviewed documents.
These are just a few ideas. You probably have more ideas yourself, so please do not hesitate to share in the comments. In my next blog in this series I will take a closer look at the future value of data that you already started collecting.