Data is driving how lawyers provide more efficient services to clients
Sixteen years after the British mathematician Clive Humby coined the phrase, “Data is the new oil,” law firms are exploiting data-driven insights. They are using data to deliver and price services more efficiently, optimally staff their operations, and maximize returns on marketing dollars.
“Law firms have access to a tremendous amount of data related to their clients, their expertise, the legal landscape, and business intelligence that impacts their clients,” says Sona Pancholy, president of Meritas, a global alliance of independent law firms. “As technology evolves and lawyers are driven to focus more on finding creative and strategic solutions for clients, they’ll put that information to better use.”
Pancholy says firms use data to increase profitability, staff projects, and deliver services more efficiently. Business intelligence allows them to keep clients informed about regulatory changes and commercial impacts, use insight into their audiences for target marketing, and increase engagement with clients, she says.
Lisa Stam, the managing partner at Spring Law, a Toronto-based employment law firm, thinks of the data coming into her firm as “a conveyor belt.” It begins with online intake forms, a phone call, or an email to someone on the team. The firm uploads the client’s data onto a portal viewable by the client, and eventually issues an invoice and closes the matter. They use integrated software so that no one needs to input any piece of information twice.
In the end, the invoice should tell a story, says Stam. “It should tell exactly what you spent your time on and convey to the client what you did for them.”
While this story can enhance transparency, how much involvement clients want can depend on the area of law, she says. To what extent the firm gives clients agency with their information – providing and organizing all their data so clients can analyze it to keep costs down – “we’re always evolving on that.” Other clients may have no interest in making that type of effort and want bespoke – not DIY – services.
“What will really elevate firms into a modern era of practising is to integrate all that automation and data collection into our day-to-day services so that the value we’re bringing to the table is our judgment – the higher-level stuff – not data entry, which a computer can do.”
Data helps law firms flag inefficiency, says Stam. Suppose one person on the team consistently takes longer to deliver a specific work product in an area of specialization for the firm. In that case, the firm can speak with that outlier about how they are approaching the file. The firm can determine what can be automated, what processes can be made more efficient, and whether that lawyer knows all the available tools.
The lawyer is usually not “screwing around and not working hard,” Stam says. “You need to have constant communication around what resources and tools exist in the giant data dump of a firm. It’s constant education and iteration.”
With Google Analytics, law firms can also track marketing data. These insights include how many people visit a firm’s website, what they are searching for that leads them to the site, how long they stay, and how the firm performs on social media.
Data allows Stam to determine the most effective time to post articles or conduct webinars. However, she says concerns over data security continue to make lawyers reluctant to innovate. In a Meritas survey of its 187 law firms around the world, 31.2 percent ranked cybersecurity and data protection as their firm’s number-one priority.
While law firms deal with sensitive information, so do hospitals, accounting firms and fertility clinics, “and they’ve moved on,” says Stam. It is possible to secure data and insure against cyber breaches. “It shouldn’t stop us from innovating just because we’re scared,” she says.
As law firms are increasingly run more like advanced businesses, they realize that they need operations that scale, says Al Hounsell, a senior innovation lawyer at Norton Rose Fulbright Canada LLP.
“You’ve got larger marketing departments. You’ve got larger operations departments,” he says. “Now there’s a lot more scalability that’s being focused on inside law firms. And the way that you inform your strategy, as a large organization, has to be based on data.
“You simply can’t put a finger to the wind and decide – decisions must be made on concrete data points, because the stakes are much higher as you become more consolidated and sophisticated. You grow out your operations, your data capabilities, and you become much more mature as an organization.”
Widespread use of digital tools by law firms
95%: Practice and financial management software|
74%: Document management, creation, and automation software
73%: Risk management and compliance software, including cybersecurity and data protection
Source: 2022 Meritas Technology Survey of its 187 law firms, worldwide
