How is Data Analytics Relevant for Lawyers?
Whether in a law firm or in a corporate legal environment, lawyers traditionally measure their value by the time spent on legal work. This is quick and easy, but it doesn’t capture the true value of legal services, and there are significant client pressures (internally from other business units or externally from law firm clients) to reduce bills. In a digital economy, the value of legal work largely results from core human expertise multiplied by the ability to efficiently “package” legal know-how in to technology. Digital tools designed for the legal industry allow a shift away from the billable hour and enable workflow data analytics that capture core human expertise.
Legal Data: Strategic Tool forInnovative Lawyers
The emergence of data-driven systems and legal technology tools, combined with the rapid pace of digital transformation(further accelerated by the pandemic) put significant pressures on legal teams.Lawyers, both those working individually and those in teams, are increasingly required to track and evaluate the actual value they create for business. To make the most of the current circumstances, legal teams must evolve into a strategic task force that better understands and efficiently deploys technology, in particular data analytics.
Operating as a strategic task force, legal teams can be far more proactive in tracking and measuring all sorts of legal data (and not just time) compared to their traditional peers. Equipped with the right technology and a data-driven mindset, lawyers gain a more competitive presence in this new reality: better positioned to evaluate and demonstrate the actual value created for individual clients and businesses. And better positioned to support our increasingly digital economies.
Capturing Data &Demonstrating the Value of Legal Work
While the pandemic has set a number of new priorities, implementing technology to streamline workﬂow and capture data remains immediately relevant for both legal and business teams. Technology is available to help simplify internal workﬂow and client-facing project work for lawyers. We advise forward-looking legal teams to prioritize implementing data-driven solutions as soon as possible. A proactive approach to making the most of legal technology is critical to mitigate the long-term effects of business interruption created by the pandemic.
Smart legal teams use this momentum to turn their operations into a data-driven, strategic operational unit. Here’s anon-exhaustive list of metrics that lawyers (private practice and in-house)should consider tracking in legal workflows:
● Resource/capacity allocation: what type of legal work the team is doing, and who is performing the work for which business unit or external client;
● Operational efficiency: track legal intake, ongoing projects and number of projects closed;
● Budget allocation: for a given time frame or specific projects;
● Internal spend vs. external spend;
● Internal deadlines: track how long a requests its with the legal team or is awaiting approval from business units/clients;
● External deadlines: track internal performance against client or institutional schedules;
● Performance of external law firms (in the case of corporate in-house legal departments);
● Complexity of the legal work: prioritize sophisticated legal projects over low added value, repetitive tasks;
● Strategic value of the legal work in relation to the overall business of an organization;
● Risk analysis: track the number and outcomes of legal and business risks mitigated by the legal team, value of fines,settlements, etc;
● Communication with team members: internally and externally; and
● Feedback from external clients (in the case of law firms: e.g., track net promoter score).
Using Data for Long-term Goals
By tracking various metrics in legal work (and not just time), lawyers can see and adapt to trends quicker, and supercharge their team’s performance.The sooner legal teams are able to implement a data strategy through smart technology, the more leverage they will gain from efficiency and information management.
Using technology to track workflow data and manage client projects enables legal teams to shift away from the billable hour mindset and demonstrate the actual value they create with their professional services. In turn, that creates cost certainty for clients: internally for business teams and externally for law firm clients.