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Deploying data as a strategic asset

Image credit: REUTERS/Kai Pfaffenbach

“Knowledge is power” as the saying goes—and it is truer than ever today: as data has become the fundamental building block on which many of the world’s biggest and fastest-growing businesses are based.

Law firms are increasingly recognising that they too have vast amounts of valuable untapped data sitting in their systems, which could be exploited as a valuable strategic asset. By turning this information into insights, firms can deliver better and more cost-effective services, empower long-lasting client relationships, create demonstrable competitive advantage, and truly differentiate themselves from their competitors. But doing so is still not standard practice.

One of the issues is that whilst many firms are adept at analysing financial data around profitability and costs, there is less focus on utilising vital information contained within documents. “Law is very text-heavy, and so there’s a huge amount of information about transactions or cases contained within work products kept in document management or matter management systems that is not being utilised,” says Jim Leason, Head of Proposition and Strategy at Thomson Reuters. “There’s a huge opportunity to unlock new streams of value by capturing data around matters more effectively, analysing it, and sharing it more widely across the firm, for instance to develop best practice, create efficiency gains, or enable cross-selling. Firms that are religious about doing so add value to clients, and their businesses.”

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Understanding the “who, what, when, why, and how” involved in each matter enables internal processes to be improved, for example by being able to map specific experience within the firm, price more accurately, or create standard clauses that can be re-used or adapted. This know-how can then be combined with other internal data, e.g., from finance or HR, plus legal and commercial data from external sources to build a fully rounded perspective that can be applied across different teams. In this way, law firms can move from purely transactional relationships with clients to ongoing, partnership-style ones, by knowing them (and the space they operate in) better, ensuring they have met expectations, and spotting new ways to support them.

Building a robust architecture

Before firms can carry out any data analytics to deliver meaningful intelligence from the information they hold, they first need to build a robust knowledge base or data warehouse, containing high-quality data, which is categorised and curated in a sensible, consistent way.

“Conduct a data audit to establish where important information lies, and cleanse that data for a single version of the truth, because if you put rubbish in, you’ll get rubbish out,” says Kate Stanfield, Director of Knowledge Management at leading offshore law firm Collas Crill. “It’s vital to create a common global taxonomy, so that data is inputted using the same controlled vocabulary within every system the firm is using and across all its offices and teams.”

Having established a methodology for harmonising data, well-designed data architecture is required to collate, analyse, and filter that data appropriately to ensure that the correct insight flows smoothly to the right people, presented in the right context without causing information overload. This “single version of truth” will enable lawyers to be both experts and efficient, and it can provide clients with useful intelligence if disclosed appropriately via extranets.

Technology has a significant role to play here, notably machine learning and artificial intelligence tools, which can crunch “big data” or automate processes, such as contract review and analysis (CR&A) software. Leason points out that since most legal matters follow a similar path, from intake to assessment, planning and execution, software can be set up to extract information at all the relevant points.

Creating the right internal culture is key to unlocking the true potential of data. For Dr Nicki Clegg, Chief Technology Officer at Top 25 UK law firm Irwin Mitchell, data-driven efforts must be led from the top. “To be able to truly use data as a strategic asset, you have to have top-down buy-in, with real commitment to change at leadership level, based on an understanding of why and how that change needs to happen,” she says. “If you just throw technology at the problem, it won’t work.” She advises starting small, but communicating a compelling vision, with clear steps along the way so that everyone who will eventually need to be involved can see what part they can play and get behind the project as it unfolds.

Stanfield believes it is important for all segments of the firm to work together to establish a suitable data infrastructure, identify priorities, and agree on actions, including what questions to ask of the data. This involves understanding the business needs of lawyers, finance, IT, HR, and business development, co-ordinated by the knowledge management team. In her view, well-curated data is an essential contribution to everything from pitch preparation, how to price and leverage legal resources most effectively, to how to evaluate work, and apply best practice learnings post-completion. “Knowledge professionals definitely miss a trick by not analysing their firm’s own enterprise data,” she warns.

Breaking down barriers

Successful exploitation of data relies on creating systems that break down silos—both those that exist between people and any that are thrown up by technology.

“Understanding what knowledge resides in our firm and getting access to it is a journey we’re on,” says Mark Jolley, Information Architect at Irwin Mitchell. “People naturally hoard their own know-how and relationships, but that model doesn’t scale easily and isn’t agile. Our goal is to create a psychologically safe environment where people feel empowered to share and collaborate, so that the firm can innovate, but also one where it is OK to fail fast and learn fast in terms of developing data delivery.”

Collating data on an industrial scale is a challenge since firms typically use several different solutions for practice management, financial information, billing, CRM, document/matter management, and so on, plus specialist software for processes like document automation, CR&A, and eDiscovery. For data to flow seamlessly through all these systems, interoperability is necessary.

“For several years, we’ve been on a pathway to develop logical, effortless data flows across our portfolio of solutions and invest in API integrations with third-party products to provide richer ways to serve an increasing number of use cases,” says Leason. “Firms are often using different tools for different things, and they want them to be configurable to their needs, but at the same time there’s a need for standardisation. Industry initiatives are making progress to develop a standardised approach, but for it to happen, market demand must be there.”

Data has often been described as the “new gold,” in that it is a precious asset that is challenging to extract, but this suggests something rare and finite. A more apt comparison is that data is like water: a sustainable, renewable resource to which everyone needs access but whose importance is often overlooked. If that’s the case, data is essential to law firms’ continued vitality.

Learn more about how data can be used to manage case and matter workflows, here: Transform the way your teams work

 

In-house agenda: September 2021 Legal Geek’s Uncertain Decade summit—Amazon law and innovation take centre stage The new EU Regulation for AI is here, will you be ready for an AI audit—part one Creating a Big Bang in legal with computational contracts—CodeX FutureLaw 2021 Data warehouse or data lake for your law firm? Ethical considerations around AI in legal technology—TR Takeover of Legal Geek event In-house agenda: March 2021 Privacy Act 2020—New Zealand lifts compliance standard A new report—the path to law firm success starts with adopting tech the right way COVID-19: economic and business environment—the role for law firms in helping their clients