Page 159 - Leaders in Legal Business - PDF - Final 2018
P. 159
conference rooms), general ledgers, status reports, surveys, and counts of all kinds of events. A
law firm that wants to capitalize on data needs to extract and store it in databases, spreadsheets,
in the cloud, or wherever it can best make use of it.
3. Data cleaning.
A key part of data analytics is the unglamorous slog of grooming it for analysis.
Software can help users correct the data, such as when there are missing or highly unusual
values, the latter being what data analysts call outliers.
Clean data also cannot have too many missing values or different styles in cells of the
same column. If the fees column has cells with a dollar sign and other cells without the sign, for
example, the software might stumble. If some cells in the spreadsheet show “NA” when data is
not available, but others show “—“, you need to clean that. Clean data is also reasonably
accurate data (it was not a data entry error that some associate billed 4,299 hours last year!) and
not pockmarked with bizarre values.
Still, you can actually do useful analyses and, more fruitfully, make predictions with
modest amounts of data. For example, with a spreadsheet having details on 50 or more closed
cases or matters of a similar type, you can infer a great deal.
II. WHAT ARE POTENTIAL USES OF DATA ANALYTICS BY LAW FIRMS?
Metrics and their exploration can benefit law firms everywhere that partners contemplate
management decisions. The next section sketches several decisions that could benefit from data
analysis and metrics.
1. Increase Revenue.
The recent surge in law firms collecting, analyzing, and visualizing information aims —
quite understandably — to increase firm revenue. Why, managing partners ask, should we invest
the time and money to do predictive analytics (AKA machine learning) if we don’t expect to hear
the cash register ring? That goal of increased fees (or improved profitability) makes sense. It also
orients firms to focus analytic tools on substantive legal analyses. Much can be done to transform
the straw of data into the gold of profitable clients, practice groups, or billing arrangements.
Analyzing cost drivers of lawsuits to make more money on fixed-fee arrangements would be an
example.
2. Retain and Wisely Promote Associates.
One benefit of data is when the firm is hiring lawyers. When firm ambassadors make
their pitch to hire associates or lure lateral partners, they deserve to be able to describe the firm
glowingly and convincingly. Solid, impressive numbers on growth, revenue, quality, and
associates, not to mention clients, persuade recruits, especially when made clear with effective
graphs. Or they will let machine-learning software loose to study who makes partner and why, or
to tackle attrition in terms of which desirable associates are at risk of leaving the firm.
3. Improve Firm Operations.
145
law firm that wants to capitalize on data needs to extract and store it in databases, spreadsheets,
in the cloud, or wherever it can best make use of it.
3. Data cleaning.
A key part of data analytics is the unglamorous slog of grooming it for analysis.
Software can help users correct the data, such as when there are missing or highly unusual
values, the latter being what data analysts call outliers.
Clean data also cannot have too many missing values or different styles in cells of the
same column. If the fees column has cells with a dollar sign and other cells without the sign, for
example, the software might stumble. If some cells in the spreadsheet show “NA” when data is
not available, but others show “—“, you need to clean that. Clean data is also reasonably
accurate data (it was not a data entry error that some associate billed 4,299 hours last year!) and
not pockmarked with bizarre values.
Still, you can actually do useful analyses and, more fruitfully, make predictions with
modest amounts of data. For example, with a spreadsheet having details on 50 or more closed
cases or matters of a similar type, you can infer a great deal.
II. WHAT ARE POTENTIAL USES OF DATA ANALYTICS BY LAW FIRMS?
Metrics and their exploration can benefit law firms everywhere that partners contemplate
management decisions. The next section sketches several decisions that could benefit from data
analysis and metrics.
1. Increase Revenue.
The recent surge in law firms collecting, analyzing, and visualizing information aims —
quite understandably — to increase firm revenue. Why, managing partners ask, should we invest
the time and money to do predictive analytics (AKA machine learning) if we don’t expect to hear
the cash register ring? That goal of increased fees (or improved profitability) makes sense. It also
orients firms to focus analytic tools on substantive legal analyses. Much can be done to transform
the straw of data into the gold of profitable clients, practice groups, or billing arrangements.
Analyzing cost drivers of lawsuits to make more money on fixed-fee arrangements would be an
example.
2. Retain and Wisely Promote Associates.
One benefit of data is when the firm is hiring lawyers. When firm ambassadors make
their pitch to hire associates or lure lateral partners, they deserve to be able to describe the firm
glowingly and convincingly. Solid, impressive numbers on growth, revenue, quality, and
associates, not to mention clients, persuade recruits, especially when made clear with effective
graphs. Or they will let machine-learning software loose to study who makes partner and why, or
to tackle attrition in terms of which desirable associates are at risk of leaving the firm.
3. Improve Firm Operations.
145
