Getting the right data from big data: Improve legal operations and management
“Lies, damned lies and statistics” is frequently used to deride data analysis, however data, in its raw form, can be a source of true facts; it is the interpretation and presentation of data that allows people to put their own agenda across.
Over the years, legal teams will have built up a significant amount of data (through case management systems, document management systems, e-billing solutions, risk registers, law firm reports, emails, legal advice etc.) which is an extremely valuable, but often underrated asset. Not only can legal data support strategic planning and trend analysis, it is also invaluable tool for;
- Managing external law firms.
- Managing internal resources.
- Understanding and supporting your business.
- Managing legal risk.
- Managing legal department finances.
Furthermore, the data forms a key part of the company’s knowledge management, which remains available irrespective of changes in the workforce.
The challenge is what you do with this information, how you keep it clean and how you pull it together and present it. Some of the key things to consider are;
Stakeholders needing the data
It is likely that you will have many different stakeholders wanting reports from the legal data, each of whom will want to use it for a different purpose. These may include;
- General Counsel who will want to use the data to set the strategic direction of the legal function.
- Team leaders who will probably use volumetric data to show and manage resource demands as well as to promote their teams.
- Team administrators who will be looking to make sure their team data is accurate and up to date.
- Procurement who will be able to better understand and support legal spend within the organisation.
- Finance / Tax who will be able to ensure (amongst other things) that provisions are adequate, and that VAT is correctly applied / recovered.
- Risk who use it so they can be better placed to understand the changes in the risk profile and to support any reporting to regulatory bodies.
Presenting legal data
Presenting the information in a clear concise way that gets the message across is a challenge, as different stakeholders will often want the same data presented in different formats. Producing a range of reports is both time consuming and a drain on resources. Online dashboards can make it easier for different stakeholders to slice the data to suit their needs. While each option has its benefits and challenges, the chances are you will want to work with both reports and dashboards.
It’s important to keep the data clean, so that reports and dashboards are showing accurate and consistent data. Despite best efforts, manual input will inevitably lead to mistakes because of typos or missed fields. A system like BusyLamp legal spend management automates invoice review so data is inputted consistently. Data validation rules, reporting, and task reminders all help legal operations managers to stay on top the data cleanliness. A number of BusyLamp clients are using data gap reports, to highlight and then complete missing data. Doing this on a regular basis ensures it’s a small, regular task rather than becoming an unwieldy data clean up project.
Using the data
Legal department data can help you to;
1. Manage your strategy. This may include areas such as;
- Understanding and prioritising the organisation’s legal demand and spend.
- Changes in the team’s performance by using KPIs.
- What cost savings have been / can be achieved such as;
- Outsourcing vs insourcing.
- Removing non-essential tasks.
- Understanding your legal team’s risk profile and internal controls by using KPIs.
2. Manage your external law firms, through;
- Greater transparency of activity and spend which in turn will help future discussions with firms, especially during panel reviews.
- Monitoring law firm performance which will help law firm reviews.
- Ensuring prompt payment of bills which may support faster-paying discounts discussions with firms.
3. Manage internal resources;
- Peaks and troughs in work can be more easily identified allowing for better resource planning and allocation (Product design / review, property management, supplier contract renewal, key stages in litigation, regulatory projects etc.).
- Understanding the impact from previous business initiatives will help prepare the department for future initiatives.
4. Understand and support your business. For example;
- An awareness of change in volume of a particular type of work will help ensure you;
- have the correct legal support available (either in-house or through external firms).
- develop training needs for your business contacts and the lawyers.
- Visibility of the contracts that have been written will support the management of risk, especially if there is a change in the legal or regulatory landscape or an economic downturn.
- Support product development by learning from previous iterations.
5. Manage legal risk
- Change in volumes of a particular type of work or within a business area will help identify emerging risks. These could include;
- Frequent changes to standard terms and conditions could indicate that your documents are not keeping up with changes in the market.
- Local changes to standard terms and conditions could indicate a lack of awareness or understanding of the documentation.
- Can help identify new training needs.
6. Manage legal department finances.
- Greater clarity on how much it costs per matter (internal vs external).
- Avoid paying for duplicate advice.
- Drive costs down with external firms.
There are many business benefits to integrating your systems and making sense of the legal data that resides within. Work out what your goals are, which of the above areas aligns to helping you achieve those core goals, then work backwards to identify the data points that will help you have the visibility or measurements you need. Finally, you will then be able to create the reports and dashboards you and your stakeholders need.
Iain MacDonald, Consultant (formerly Legal Operations at Lloyds Banking Group)