As with many technological advances, the legal industry has been slow to keep up compared with others. This is party down to the fact that attorneys tend to be risk-averse, and partly to do with the nature of legal data.
The most readily analysed, modelled data tends to be highly quantitative in nature – for example, the natural sciences. Science itself has been around for hundreds of years, and it is data analysis in the broadest sense.
Like the hard sciences, legal data analysis has been possible for as long as the legal practice has been around. Modern technology simply adds more practicality. In the past, lawyers would spend hours studying books of court records to painstakingly qualify every relevant case for a client.
Lawyers often rely on the sum of their individual experiences, along with those of the other legal professionals in their firm, in order to judge the likely outcome of a case. In layman’s terms, it’s a hunch.
But it goes without saying that although intuitions and hunches can be useful, they are also flawed and subjective. And, they can often rely on limited data sets. No matter how experienced one legal professional is, their direct knowledge is nothing compared to the massive universe of legal data available.
Ultimately, using data analytics allows law firms to make better overall business decisions, whether this is in terms of:
Identifying opportunities to expand relationships is one of the most important actions that a law firm can take in order to drive profitability. And, incorporating data analytics into the law firm’s internal financial reporting processes allows for easier analysis of data that is already held on clients. As a result, law firms can quickly pinpoint any opportunities for expanding current client relationships.
For example, automated trend analysis is able to reveal clients who are about to:
Or, trend analysis could be as simple as automatically creating an alert for each time a client’s account shows no communication for a predetermined number of days.
As a result, opportunities are created to expand work for existing clients. For law firms, making this review a key part of the monthly process, compared to doing it once every so often, can be a game changer.
There are many functions outside the practice of law in any law firm, including marketing. At its core, a law firm is a business providing a service. And successful businesses use data to:
Today, clients want much more than just a barrister or solicitor. By using data analytics, a law firm can differentiate themselves from the competition by demonstrating expertise.
Building a solid reputation for being able to efficiently accumulate and analyse data has never been as important as it is today. And efforts towards innovation using data analytics can be cited during seminars and webinars, when posting updates to the company blog, or when publishing industry articles and publications.
When analytics are used, trends begin to materialise quickly and become much easier to spot. For legal firms, this includes better predictions of how judges, juries and venues will act, based on their actions in past cases.
Law firms can use this to their advantage during the preparation stage for any given case. By using data analysis to come up with more accurate predictions based on previous similar cases, legal professionals are able to come up with a solid plan of how to most effectively deliver their argument.
Supporting strategic decision making through harnessing client data is essential. It can lead to important insights about:
As a result, it leads to enhanced strategic focus, and better enterprise level decision making across every aspect of the firm, including business expansion, talent acquisition, and business expansion.
Using data analytics provides a clarity of purpose, which in turn enables the firm to quickly focus direction, easily adapt to environmental changes and ensure that organisational goals are aligned.
Data analytics can also be used to better determine the profitability of any particular case type. After all, law firms need to make money!
The amount of time and work that goes into any particular case should turn a profit, depending on the case. Law firms can link both billing systems and time available to firstly analyse and determine appropriate pricing, in addition to planning staffing models for a case.
And, processes and procedures can be significantly more streamlined when using data analytics. Menial, yet essential tasks like sifting through case files and emails can take up hours or even days, depending on the case at hand.
Using data analytics allows a law firm to efficiently mine for existing data. As a result, time is maximised by spending it extracting insights, compared to making sense of disorganised information piles.
For intellectual property cases, data is essential to execute them correctly. Data can reveal very clearly that intellectual property has been stolen, by revealing matching:
And so on. Without the presence of data, legal teams are at a disadvantage as they must largely rely on the perception of the jury, leaving too much room for human error.
There are often many unanswered questions when it comes to law firm hiring and workload:
Data analytics can help you quickly find the answers to these questions. Then, when the majority of existing staff members are approaching the end of your usual tenure length, you can implement a campaign for employee retention, or be proactive about hiring new personnel.
And, data analytics can help you determine how your workload is distributed, allowing you to easily identify any practice areas that may require additional support.
You may even want to consider training a particular member of staff in data analytics. Learn more about business analytics degree training here.
Pulling data from a case management system allows you to get an instant, ‘at a glance’ assessment of your progress on any ongoing projects, business development, and other individual matters.
Visual charts and dashboards created using data analytics allow you and your legal firm employees to better understand your performance against budgets and timelines. You can instantly determine whether you are currently on track, or whether you are falling behind, allowing you to make any necessary adjustments as early as possible.
Don’t wait for your employees, or worse, clients, to complain; use data analytics to determine where you have any bottlenecks and the resources that you need in order to clear them. Data analytics allows you to proactively find inefficiencies in both individual cases and the overall law firm operations, and explore ways to solve them as quickly as possible.
Data analytics can help you better compete with other law firms, from coming up with a winning pitch to selling your expertise in specific practice areas. It allows you to compile hard data about your success that you can use to show prospective clients exactly why you are the best in the business.
From expanding relationships with current clients to boosting case wins, better marketing of practice areas and improving internal law firm operation decisions and problem identifying, there’s no denying that data analytics is a crucial tool for any legal firm or practice to use today.
No matter what area of the law you practice in, business analytics will give you the edge; particularly as other law firms have been slow to implement it so far.