data potential

How to Unlock a Firm’s Data Potential

Law firms are in a unique position when it comes to data. They have volumes of it, and the information is incredibly valuable. It’s simply the nature of a legal business to create and collect massive amounts of information in documents, notes, and communications.

In this age of big data, that’s great news for firms, right? The short answer is “yes.” The long answer is “it depends.”

Many firms are already embracing data as an essential part of the future of law. With the power of AI and other intelligent technologies, these pioneers are pushing the boundaries of what’s possible.

But if almost every law firm is sitting on their own data gold mine, why aren’t more cashing in?

The problem with law firm data

Andrew Baker with HBR Consulting says, “The legal industry is information rich but data poor.” He explains that while data sources are assuredly plentiful, established processes necessary to effectively capture information are lacking.

Sometimes defined as “unstructured,” the type of data Baker is referring to is literally everywhere. It lives in email inboxes, printed documents, PDFs, PowerPoint presentations, spreadsheets, statements, contracts and so on. It’s trapped in personal computers, shared directories or somewhere in the cloud.

There’s no accountability for most of this unstructured mess, which means that a good portion of relevant data remains disconnected from the systems designed to take advantage of it. In short, it’s wasted.

Gartner has coined a relatively new term that’s more illustrative and instructive—dark data, which is “the information assets organizations collect, process and store during regular business activities, but generally, fail to use for other purposes.”

Data is essential

Foundational pillars for innovative firms should include culture, client relationships, the intelligent use of technology and process — and data. Of these areas, data is the most dependent.

Let’s start with the process. Baker shrewdly observed that processes are often not in place to effectively capture data. “Effectively” is the key term he uses, because while content and information is being generated at an incredible pace, maximizing the value of it is a real challenge without the right process.

One of the biggest obstacles to implementing a better process for capturing data is cultural.

Law firms, like every other type of organization, struggle to make data capture a priority. Instinctively, people create new files and documents as part of their daily routine and keep them in familiar places. While this practice may be more efficient for each individual, it’s the core reason data go “dark.”

On the technology front, who hasn’t tried to throw a solution or two at the problem? There is a range of sanctioned technologies—and “shadow” products—law firms use to keep, manage and share documents and data. These systems typically fit together in a patchwork fashion with varying rates of adoption and oversight.

And finally, data and client relationships go hand in hand. Don’t see the connection? Some firms do, and they are using this association to gain a competitive advantage.

Data is virtually meaningless in isolation, but transformative when it’s used conjunctively with the other pillars.

What are innovative firms doing?

Embarking on this data journey requires just that—data. Lots of it.

Each piece of information is needed, whether that’s a paragraph in a transaction document, a comment made in an email thread, a figure in a financial statement or a clause in a contract. Data that are omitted from analysis creates a gap in knowledge. It removes context that could be crucial to an accurate interpretation of the data, diminishing its overall value.

The approach to data highlighted here starts by illuminating the “dark” information that exists in the firm. This requires establishing an “effective” process by which all information becomes accessible. The larger culture of the firm must be supportive and participative, and the shift needs to be driven by a technology platform that simplifies, unifies and manages the process.

Disparate solutions that operate in the open or in the shadows must be replaced by a technology ecosystem that’s interoperable and cohesive. This infrastructure also must be able to seamlessly facilitate AI, machine learning, analytics and other advanced capabilities that surface.

Once they’ve reached this vantage point, firms can then begin to think strategically about putting the data to use — whether it’s creating more accurate budgets, predicting litigation outcomes or optimizing efficiency.

A comprehensive approach enables firms to:

  • Improve the client experience by delivering more targeted products and services based on insights. Data empowers your firm to offer more cost-effective solutions, complete work more quickly and meet client expectations with more consistent, dependable work.
  • Streamline operations by using data to identify process inefficiencies and fix them, in addition to automating manual steps or triggering a workflow based on known information.
  • Provide better business-winning outcomes by better understanding what a client’s reaction to a proposal will be, which resources are needed when, and what a potential client’s pain points are.

With the right mindset, planning, and execution, the potential list of improvements driven by data is nearly limitless.

Embracing data innovation

The legal industry has historically been reticent to adopt new technology and ideas, but it also has long recognized that data is valuable. We’ve always known how the right piece of information can be the difference between success and failure.

Data as a concept is really no different.

Other industries have been successfully using data to become more agile and effective for more than a decade. We’re now seeing more firms interested in data, even if adoption is slower and in some cases half-hearted.

Firms that hedge their bets with limited strategies, sending only selected data for analysis, will see some benefits — for now.

But there’s a greater value to be had, and competition for business will only grow fiercer. Firms that fully embrace data and weave it into their culture, client relationships, processes and technologies will become clear leaders because they’ll be able to more effectively demonstrate their value, more efficiently deliver services, and ultimately, win more business.

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