Legal Practice Management – Business Intelligence For Law Firms

Gartner describes analytics and business intelligence (ABI) as an umbrella term that includes the applications, infrastructure and tools, and best practices that enable access to and analysis of information to improve and optimise decisions and performance.

As such, it is quite a woolly concept. And this is, perhaps, what makes business intelligence so difficult to implement successfully.

The key question: what insights do you need to ensure the successful and profitable operation of your practice?

Only this answer can shape what business intelligence will look like in practice for your firm and which legal practice management solution is the best fit. 

 

What types of business intelligence might law firms desire?

Business intelligence might take many forms in a law firm.

  •         Operational: why are there such discrepancies between the hours billed by different fee earners?
  •         Strategic: what are the most profitable activities for our firm?
  •         Financial: how can we set a fixed price for common, standard matters that is attractive to clients and profitable for our firm?
  •         Competitive: what is our market share? What will be the most promising opportunities in 2022?
  •         Customer insights: what proportion of our clients’ business do we handle? How satisfied are they with our firm?
  •         ESR: what is our carbon footprint and how can we reduce it?
 
 

Business intelligence & data

The raw data that is required to answer each of the different questions we gave as examples above will be very different.

For example, the data that can help you to answer to the question “how can we set a fixed price for common, standard matters that is attractive to clients and profitable for our firm?” is probably held within your firm’s internal financial and billing systems (and, if it isn’t, it should be).

Whereas the data to answer the question “what proportion of our clients’ business do we handle?” or “how satisfied are they with our firm?” may require you to commission a bespoke customer satisfaction survey.

All of the above is best achieved using legal practice management software that can automate and report on the data required.

 

 An effective data strategy

You can think of your business intelligence data strategy as the answers to a series of questions:

  •         What question am I trying to answer?
  •         What data do I need to answer that question?
  •         How do I source or access that data?
  •         How do I clean and process that data?
  •         How do I securely store that data in a way that is both compliant and makes the data available to be processed?
  •         How do I process, aggregate and/or analyse that data to create the insights I need?
  •         How can I share and report on the data and the insights it generates?

As your answers to these questions will reveal, business intelligence has a lot to do with data. However, data is not the whole story. There are technical, financial, governance and compliance, skills and resourcing considerations to be made.

Remember that, like any other business strategy, your business intelligence data strategies must be:

  •         Firmly rooted in your firm’s strategic plan
  •         Designed to address a key business priority or problem
  •         SMART – specific, measurable, achievable, relevant and time-bound – in their objectives.

Then, once you have defined your business intelligence data strategy, you can begin to plan the tactics, tools and resources required to implement it.

 

 The transition to data-driven decision making

While many legal practices might agree that data should drive decision making, research suggests that it is far from the norm for this to be the case in law firms. Things are changing: research found that just 48 percent of law firms and legal professionals used data analytics technologies in 2019. However, given the digital transformation that has been driven by the pandemic, this number is expected to leap to 83 percent this year.

Nevertheless, hurdles remain:

  •         83 percent of firms said their ambitions are being held back by a lack of time
  •         33 percent cited a lack of guidance
  •         24 percent said a lack of understanding of the need for data analytics and intelligence was holding back their ambitions.

Partnering with an experienced third-party can be a solution to each of these most common constraints. If time is an issue, then seeking external help to plug the gaps in your current capabilities and resourcing. Plus, they can support you in building the business case and raising awareness internally.

 

 Determining your own business intelligence priorities

To prioritise your own business intelligence needs and activities, we must return to the key question: which insights do you need to ensure the successful and profitable operation of your law firm?

This question opens up a number of further questions:

  •         What are the priorities and values of your firm?
  •         What problems are you battling with?
  •         Where would you like to improve performance?

Once you know the question you want to answer, you can begin to plan your business intelligence data strategy.

 How can we help?

Actionstep legal practice management software includes powerful reporting tools and dashboards that provide essential information about your billing, practice areas, staff, time recording, and clients. These reports are designed to help collate day-to-day details and strategic information about your firm and help you manage and grow your business more efficiently.

When using Actionstep we allow you to simply switch-on your Business Intelligence and key business metrics in your web browser. Start your discovery by drilling down into your data with our free BI solution. For a low monthly fee we can provide more metrics and add in other data sets. 

Check out the demo here. All that is missing is your data. 

We understand that as a decision maker in your firm, you want access to accurate, up-to-date information that can assist in driving your business forward. Talk to our team today to discover how we can help you.

 

For more information about Actionstep, please contact our team:

Tel.: 01865 521039

www.cloudify.legal

actionBI@cloudify.legal