Business Intelligence Software for law firms

Business Intelligence Software for law firms

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Business intelligence (BI) at a law firm helps uncover previously unrealized potential by sifting through vast amounts of data and information in search of actionable insights. It’s a versatile tool that can be put to use in a variety of settings, from finding and courting potential new customers to strengthening ties with existing ones.

If the company is trying to attract new clients, it may find it helpful to reorganize its caseload by industry to see which projects yielded the highest return. One way to do this is to look for areas where the business isn’t yet developing client relationships, such as in industries where there are gaps.

Business Intelligence Software for law firms

Lawyers’ Four-Tier BI Prowess

We speculated on the degree to which law firms are developed as BI organizations in light of the importance we placed on data quality and the culture required to produce quality data. Too many companies, we’ve found, are still in the nascent stages of business intelligence.

If we can put words to this idea, maybe businesses will be able to gauge themselves against competitors and set goals accordingly. As a result, we classify the vast majority of law firms into one of four tiers.

1. Business Intelligence: Description

In the BI descriptive stage, we find out the answer to “what happened?”

Reporting, like the practice of law itself, is fundamentally investigative and retrospective in nature, so that it can best answer questions about what transpired. That’s the catch, too, because reports only capture a moment in time, so the information in them quickly becomes outdated once they’re made public.

Many reports are common in legal offices. These are frequently digitized as PDFs and distributed via internal email, usually with minimal comments. The group responsible for creating the reports may begin to doubt their usefulness. Team members have been overheard discussing whether or not they should stop sending a certain report around in order to gauge whether or not anyone will notice, which sounds like a combination of a joke and a litmus test.

Good reports, it should be stressed, are crucial to the management of any law firm. It’s important to proceed with caution, however, because these reports aren’t always actionable and they require only rudimentary business intelligence (BI) knowledge to generate.

2. Business Intelligence for Law Firms: Diagnostic

The diagnostic stage of BI attempts to explain the event in question.

The information provided by the law firms indicates that something took place, but this is only the beginning. The reason that symptom manifested itself can be deduced from a diagnosis. A runny nose can be caused by allergies, a cold, or the flu, all of which have different symptoms and require different treatments.

Diagnostics in law firms apply certain conditions, such as a minimum client budget, to a subtotal or total in a legal report. At the diagnostic level, work is done to explain the “why” of a report, which is invaluable to a law firm.

As a result, this is typically the starting point for dashboard projects that aim to give clients access to self-service legal counsel. Now, no one in the company, from entry-level workers to top-level partners, has to wait for an analyst to compile the data they require.

3. Business Intelligence for Law Firms: Predictive

The question “What will happen?” is addressed by the predictive tier of BI.

This is where a company starts to see the benefits of business intelligence and make the transition from a reactive to a proactive mode of operation. If you keep working the same number of hours each week, for instance, the prediction level will indicate to your employer, practice, or partner what your annual earnings will be.

The usefulness of business intelligence predictions increases dramatically when working with a sizable data set. Using historical data from the previous three years, BI can predict the likelihood of collecting a certain percentage of a company’s work-in-progress (WIP) or accounts receivable (A/R). This is information that can be put to use. When a managing partner sees these projections, he or she can instruct his or her staff to enter their time more promptly.

Rather than simply complying with a reporting request, analysts start to understand why, which poses a challenge to both the status quo and the culture of law firms. When does a partner require a report, and why? An opportunity analysis can be performed if the analyst is aware of this.

4. Prescriptive Business Intelligence for Law Firms

The goal of the prescriptive stage of BI is to provide guidance for actually putting the plan into action.

To achieve this is the pinnacle of business intelligence. Now, it’s not just about anticipating future events on the basis of data trends; it also shows us how to bring those events about. It’s the practice of using data to guide business decisions, rather than relying on gut feelings or the results of the last client meeting.

Since this kind of understanding calls for specifics in the data, many businesses lack the strategy and culture to do this. If your company allows for block billing or doesn’t require accurate time coding, for instance, you won’t have any visibility into the financial considerations that underpin your workflow or your pricing.

Methods for Advancing a Law Firm’s Business Intelligence

What should a company do to advance if better BI knowledge leads to new opportunities for profitable growth? Some concrete recommendations are as follows:

1. Inquire “why?” as a first step.

The question “why?” marks the transition from retrospective reporting to prospective forecasting or advice giving. A good analyst will always inquire as to the purpose of a request for a list of clients or matters that fit a certain criterion.

To be effective, an analyst needs to know why they’re doing something. Data can be aggregated and viewed graphically in order to reveal previously unseen opportunities for the company rather than a laundry list of client names.

2. Evaluate your current business intelligence (BI) team

Businesses are accustomed to assigning workers from the finance and IT departments to business intelligence projects. It’s not always the case that the best person to slice and dice data is the same person who can expertly troubleshoot network connection issues. Immediate effects on business intelligence can be realized by hiring analytics or data science professionals who are focused on BI.

3. Try It Out With Focus Groups

Small, manageable steps are usually necessary for bringing about change in any organization. Although making the switch from block billing to accurate coding is important, it can be difficult for some businesses. One promising strategy is to conduct pilot projects with a single innovative practice group.

4. Evaluate current compensation structures

Perhaps the only types of businesses that receive more scrutiny than law firms and baseball teams do. Everything in a law firm has its own metrics and statistics. But whether or not a company is paying attention to the right metrics in this regard is crucial. Culture change, and by extension high-quality data, can be influenced by compensation structures.

5. backing from the top brass.

Most new ventures need the backing of upper management. The signature at the bottom of a memorandum shouldn’t be the only indication of agreement. Business intelligence (BI) in a law firm is all about generating revenue, so top management’s participation is essential to its success.

There’s a saying in the legal industry that says firms always seem to be looking in the rearview mirror and never planning for the future. You have found the proverbial hole in the reporting of law firms. Leaning forward and backing BI in its efforts to make predictions and prescriptions that lead to a more profitable firm is, we argue, the way to get ahead.

Suggested Reading

  • Brainstorming Session: Preparation Is the Key to Lateral Hiring Success in Law Firms
  • What Exactly Is a “Dashboard” for a Law Firm?
  • Using Dewey’s B-Strategy, ALM Presents 2018 Survey of Library and Knowledge Professionals: Intelligence, Analytics, and AI Prevail

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