Law firms are in a unique position when it comes to data. There are 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’.
SmartLaw firms are already embracing data as an essential part of the future of law. With the power of artificial intelligence (AI) and other intelligent technologies, these pioneers are pushing the boundaries of what is possible.
Although, if almost every law firm is sitting on their own data gold mine, why aren’t more cashing in?
The challenge with law firm data
In the report ‘SmartLaw 2.0: Expert insights for the new future of law’, Andrew Baker with HBR Consulting says, , “The legal industry is information rich but data poor”. Baker explains that while data sources are assuredly plentiful—established processes necessary to effectively capture information are lacking.
The type of data that Baker refers to, sometimes defined as ‘unstructured’, is literally everywhere. Unstructured data 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 is 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 is wasted.
Gartner has coined a relatively new term that’s more illustrative and instructive—dark data. Dark data is “the information assets organisations collect, process and store during regular business activities, but generally fail to use for other purposes”.
Data is essential to practicing law
The latest iteration of the SmartLaw framework includes data plus four other foundational pillars, which are culture, client relationships, the intelligent use of technology and process.
Of all the five SmartLaw areas—data is the most dependent.
Let’s start with process. Baker shrewdly observed that processes are often not in place to effectively capture data. The key term Baker uses is ‘effectively’, because while content and information is being generated at an incredible pace—maximising 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 organisation, 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 goes “dark.”
On the technology front, who hasn’t tried to throw a solution or two at the problem. There are 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. Perhaps the connection isn’t obvious? SmartLaw firms see the relationship 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 components of SmartLaw.
What are SmartLaw 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 is 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 SmartLaw approach to data 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 optimising efficiency.
A comprehensive SmartLaw 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 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 proper 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 recognised 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 are 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 an opportunity for greater value—and competition for business will only grow more fierce. Firms that fully embrace data and weave it into their culture, client relationships, processes and technologies will become clear leaders They will be able to more effectively demonstrate their value, more efficiently deliver services, and ultimately win more business.
For more information, download the report ‘SmartLaw 2.0: Expert insights for the new future of law’ here.