"Software is eating the world," wrote Marc Andreessen in The Wall Street Journal in 2011. More recently, we have heard claims that both Services (as in the" as-a-Service" model) and AI are eating Software. The foundation, in addition to raw computing power, of both the "as-a-Service" model and AI is data. Loads of structured and unstructured data. Data is used for training AI algorithms and 'Big Data' generated by an organisation's business processes and interactions with customers (including end customers), business partners, vendors and other external parties. Most organisations are more or less drowning in data, and their users struggle to navigate all the disparate and siloed "data lakes" (pun intended) available to them.
Law firms sell their employees' knowledge and expertise. Whereas the traditional 'billable hour model' hasn't always encouraged working smarter and implementing more efficient and effective business processes, the shift to "as-a-Service" and alternative fee arrangements (AFAs) certainly does. Digitalisation and digital transformation are the new blacks in law firms, and data, rather than intuition and gut feeling, is now (supposedly) driving planning, modelling, analysis and ultimately, decision-making. I would, however, claim that an authentic data-driven culture can be elusive and challenging to implement. Decision-makers in these firms must embrace a mindset change and implement new processes and technology that may differ significantly from what they are used to.
PSA is a digitalisation (or digital transformation if you like) partner to law firms and in-house legal teams. We help our clients work smarter and build competitive advantages based on intelligent and seamlessly integrated tech solutions that adapt well to the firm's business processes and end-user requirements. Based on our experience, many best practices can be learned from genuinely data-driven law firms.
1 - Integration is hard, but Master Data Management is harder
Open and standardised integration technologies have made the technical aspects of data and process integration a lot easier. However, one problem is that many integrations are solved on a "use case-by-use case" basis, with little to no consideration of a more holistic integration perspective and the greater technology ecosystem the firm uses. As a result, we often see enterprise integration challenges related to business rules and master data management (MDM). Implementing a cohesive yet flexible MDM model is not easy, and it requires subject matter expertise and technology that supports the MDM model.
Once implemented, a well-designed and well-governed MDM model provides a foundation for current and future integration use cases, and data-driven law firms have put in the effort to get that in place. Combined with a capable and flexible cloud-based MDM and integration platform (yes, we offer a cloud-based integration platform with powerful MDM capabilities that is purpose-built for law firms), your firm has the proper foundation to address current and future MDM and integration requirements.
2 - When it comes to data intelligence services, one size doesn't fit all
For many years, engaging with external data intelligence services was primarily something that concerned business development and marketing teams, e.g., the firm's CRM system or monitoring public tenders. Today, the scope is much broader and involves compliance (especially in highly regulated industries such as law firms and accounting firms with their specific AML and KYC requirements), credit checks throughout the customer lifecycle, competitive and market intelligence, and employer branding. The implication, however, is that data-driven law firms typically need to engage with several different data intelligence providers and/or subscribe to multiple services and databases designed for specific purposes. Connecting your AML/KYC solution to data services containing PEP data, UBO data, and sanction lists are very different from utilising data services that help create correct prospect data in your CRM system.
Data-driven law firms have learned how to utilise the power of external data intelligence services and regularly engage with their data intelligence providers advisors to maximise their investment in compliance, quality, and intelligence.
3 - Structured data is essential, but unstructured data can be instrumental
Implementing enterprise technology such as ERP/Practice Management, CRM, and Business Intelligence (BI) to manage critical structured data is ubiquitous, and something law firms have done for decades. Even though many firms still struggle with master data management challenges, siloed data, missing or ineffective integrations, and ultimately multiple versions of the truth, the C-suite in these firms are aware of the importance of having the right technology, processes, and governance in place. However, this is not always the case when managing the firms' unstructured data found in millions of documents, files, e-mails, and chat conversations. From a firm, as well as an end-user perspective, we typically see a couple of significant challenges here.
Collecting and maintaining structured data is mandatory and deeply ingrained into your business processes. You can't run a sustainable business if you don't submit timesheets and bill your clients. You will get into trouble if your financial records aren't in order. Managing unstructured data is a whole different story. Every Sales Manager and Chief Sales Officer knows that implementing and maintaining a solid cadence in the firm's CRM system is a massive challenge. The same goes for enterprise-level document and e-mail management systems, knowledge management systems, and file repositories.
To address these challenges, data-driven law firms have implemented processes and technology fit for purpose. The user experience must be effortless and seamlessly integrated into essential productivity tools such as e-mail, Microsoft Office, Microsoft Teams, and Slack. Search functions must be simple yet powerful and not provide users with an endless list of semi-relevant (best case) or irrelevant suggestions. Purpose-built document automation and document management technology help users find the proper templates, draft documents, collaborate, review documents, control versions, archive documents, e-mails, and chat conversations, and securely share documents with internal and external parties.
Managing and governing your firm's unstructured data is hard, but the yield from improved productivity, compliance and knowledge management is massive.
4 - Don't theorise without relevant data
Sherlock Holmes famously said, "It is a capital mistake to theorise before one has data. Insensibly, one begins to twist facts to suit theories, instead of theories to suit facts". This axiom is as true in business as it is in solving crimes. Whether you are an intelligent and ambitious young professional or a seasoned business leader, you may sometimes believe you know how or why you reached a particular business outcome, should pursue a specific strategy or go after a defined market segment. In some cases, you could be correct, but in many other cases, critical business decisions would have been better served by moving beyond anecdotal, incomplete, non-coherent, and limited evidence.
I've seen critical go-to-market plans with no supporting market and opportunity data. Marketing plans with no supporting lead conversion data or analysis of the relationship between the input and output of key initiatives. Competitive strategies with no analysis of historical win rates, even on an aggregated level. A genuinely data-driven law firm does not over-analyse or seek to overburden decision-makers with too much data. However, they do ensure decision-makers are supported with relevant, coherent, and holistic data and encourage a decision-making culture that is structured and analytical while at the same time curious, intellectually flexible, and open-minded.
Call to action - It is worth doing, and it is worth doing well
As I stated, implementing an authentic data-driven culture can be elusive and challenging. Decision-makers in these firms must embrace a mindset change and implement new processes and technology that may differ significantly from what they are used to. The yield from doing it can be massive, and every small step in the right direction can substantially improve your competitive advantages and business outcomes. And we are happy to assist your law firm every step of the way.
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