Law Firm Data Strategies Are a Must Have – Here’s How to Start
May 01, 2023
In addition to the human authors, ChatGPT assisted with researching and writing this piece.
In Part I of this series, we examined the benefits for law firms of a well-designed data strategy, including better business and strategic decision-making, higher productivity, improved compliance, lower operating costs, and enhanced client offerings. But where should firm leaders begin? In this post, we provide an answer by explaining six key steps for developing and instituting a comprehensive law firm data strategy.
To illuminate the value each of those steps add, it is helpful to first understand what is possible. Consider the following examples from leading global law firms:
- Baker McKenzie’s improved efficiency and reduced the risk of data loss by streamlining the firm’s document management processes and using a centralised repository to store and manage documents .
- DLA Piper deployed a data analytics platform to help its lawyers make better decisions by using artificial intelligence and machine learning to analyse data from multiple sources, including financial data, client information, and case details.
- Latham & Watkins has automated its billing processes with an automated system that has improved accuracy and reduced the time required to create and send invoices.
- Allen & Overy uses a data analytics platform to improve its client services. By analysing client feedback, the firm has identified areas for improvement and new services to develop to better meet clients’ needs.
- Seyfarth Shaw implemented a data analytics platform to collect and analyse data on their business operations, including profitability, productivity, and client satisfaction. The result has been better-informed decisions generating significantly increased profitability per partner and marked reductions in the time required to complete legal projects.
- Reed Smith has a data analytics tool to spot inefficiencies in their billing processes, leading to a material increase in annual revenue through the elimination of non-billable tasks, reductions in billing process’ duration, and increases in billing accuracy.
- Latham & Watkins implemented data analytics to track and analyse litigation data to identify trends, predict case outcomes, and improve litigation strategy to increase its win rate and reduce the time for case resolution.
The success of these and other firms is making law firm data management a competitive must-have, with increasing numbers of firms investing in data management – both in terms of engaging experts in the field and acquiring data analytics tools.
The examples above demonstrate the range of law firm data strategies. But what should be the focus of a firm seeking to develop and implement its own strategy? Document management? Litigation forecasting? Billing? Operations?
There is no one-size-fits-all answer. But there is a sound process for law firms that want to start their data strategy journey:
- Define Your Objectives. For your data strategy to serve your firm’s strategic and business strategy, begin by defining your business and strategic objectives. That will enable you to identify critical data, whether concerning clients, financial performance, operations, compliance, or something else.
- Identify Your Data Sources. Once you understand what constitutes critical data, identify key data sources that you need to collect and manage to achieve your objectives. This may include systems for timekeeper activity, billing, document management, HR, and practice and matter management. It is best to invest in developing a comprehensive taxonomy of your key data points.
- Develop Data Governance Policies. A critical component of a data strategy is policies and procedures governing the collection, use, and protection of data along with guidelines on data security, privacy, and compliance obligations.
- Select Appropriate Tools and Technologies. Assess and then select appropriate tools and technologies to manage and analyse your data, such as data management systems, business intelligence tools, and analytics platforms.
- Build a Data-Driven Culture. The success of your data strategy requires lawyers, business and operations professionals, and administrative staff to appreciate the value and real-world impact of data. Ensure data literacy among everyone at your firm and train them to be proficient at using data tools and technologies. Foster collaboration and data sharing and reward innovation and continuous improvement.
- Monitor and Measure. Regularly assess your data performance against your business objectives. Use key performance indicators (KPIs) to track progress and identify areas for improvement.
These steps are prerequisites for developing a comprehensive data strategy that supports a firm’s business objectives and drives ROI. Remember: a successful data strategy is an ongoing process, not an event. Continuous monitoring, analysis, and improvement are critical.
A well-thought data strategy has become a competitive necessity for the success, growth, and survival of large law firms. By prioritising data management and having the right tools and processes in place, law firms can manage data effectively, make informed decisions, comply with regulations, enhance operational efficiency, support a culture of innovation, and reduce costs. This way, law firms can achieve their business goals and deliver superior value to their clients.
Back to Expertise