Data and reporting requirements associated with information repositories constructed by professional services firms such as law firms are burgeoning. Everyone, law firms and clients alike, seems to want to collect as much data as possible and then make the most of it via detailed, sophisticated analysis.
Accordingly, we’ve noted an entire new set of tools and terms in the industry, including but not limited to “Big Data”, log-aggregation products, analysis tools like predictive coding and TAR 2.0, decision-support executive dashboards, and slew of other devices and strategies too numerous to mention. These approaches are used to accelerate discovery processes, group together disparate data sources to support more comprehensive analysis of business information. They also help bubble up key metrics for management review and action.
It must be noted, however, that the tremendous amount of data collected by professional services firms — which is rapidly increasing each year — presents not only value propositions but also a myriad of management opportunities.
Regulatory requirements, which were always important but not necessarily the primary focus of data management, are now not unlike the old side mirror warning that “objects in the mirror are closer than they appear.”
And that’s not the only moving part in our data machine. The emergence of the cloud — both cloud vendors and cloud storage — have greatly intensified the importance of here-to-fore nonexistent terms like “data map” in the vernacular of law firm technology managers. Two factors — that client audits are now more the norm than the exception and storage is now so incredibly inexpensive — re-energize the call for a fundamental rethinking of data management on many fronts.
To that second factor, the game-changing expense models offered by cloud platform providers offers incredibly attractive rates to house data, diminishing cost as a factor in data retention decisions. However, this is the rare instance where what is good for business is perhaps not so good for data-management strategies. The natural inclination of factoring storage cost out of an evaluative equation is to retain additional data, whether one needs it or not. But, lest we forget, there still are many other hidden costs, such as management costs or the cost of non-compliance, associated with retaining data.
But, as important as all those aspects of data management are, there is one overarching consideration which arguably dwarfs the others. That is our user base’s undeniable, irrefutable, head-over-heels love affair with all of those wonderful PDFs, productions, reference materials, e-discovery databases (EDD), spreadsheets, briefs, depositions, and all the rest of the precious artifacts in their various storage areas. To some, their beloved data is more attractive than Jennifer Gray was to Patrick Swayze in the cinematic classic, Dirty Dancing.
So, how does one deal with all of this? Like most complex problems, it’s a process. When dealing with broad issues like these, it’s usually a bit more manageable to work through them one step at a time. Here are some recommendations.
Locate Your Data & Document Your Work Processes
That sounds easier than it is. Sure, everyone can rattle off the main storage areas for your law firm’s general information — Outlook, shared drives, a document management system, cloud storage, accounting system, etc. That’s the easy part.
Now, what about all your business partners? Who does your payroll? Who manages your HR systems and prepares your taxes? Where are your clients’ EDD repositories? How do you securely exchange data with clients and partners?
When a client asks you to complete an audit, one of the first “gotcha” questions is not how you manage your data but, rather, how do your vendors and consultants with access to your data manage their processes and vet their employees? The preparation of a data map — in essence a self-assessment tool or chart which, once completed, helps others understand how data moves through your organization and serves as a road-map for most of the other considerations in this area (regulatory, audit, retention, etc.) — becomes an essential exercise in client relations.
Retention Policies — Perhaps Boring, Yet Vitally Important
Most of us in the legal industry have heard way too much about the “Smoking Gun Memo” over time. But, in the context of the science of data collection and review, we can certainly dial back on the dramatics associate with that typical example.
Suffice to say, any reasonable perusal of an entity’s data storage areas is virtually certain to identify data a law firm really does not need to keep. Data about old cases, old clients, or old issues top that list, of course. These data reviews also apply to some repositories not typically considered within the context of a data retention policy — things like system logs, accounting and billing records, and other comparatively esoteric storage areas. Further, there also is likely a slew of valueless information (e.g. garbage data) and a large set of duplicative information.
All elements of data should be considered “in scope” when developing a keep vs. retain decision plan.
Make the Most of Your Space
As the business success of organizational systems company California Closets attests, “stuff” should be organized. Several gigabytes of data dumped into a generically named Windows folder is, in today’s world, a serious no-no.
Developing structured approaches to storing data — thinking by client and matter, or perhaps by topic or practice group — is a markedly better approach to hosting your data. Poor practices in this area give a law firm a lower probability of appropriately complying with government regulations, client audits, or ethical wall responsibilities than say San Marino or the Faroe Islands has of qualifying for the 2022 World Cup. Data must be stored in a strategically planned hierarchy which is documented and consistent with your entity’s data map.
For all the reasons and examples cited above, it is wise to be mindful of the big picture when considering the data you retain. Be sure to document what you have, how it is used, where it is stored, and to periodically evaluate whether or not it continues to add value to your enterprise.
Also, take time to evaluate how your data-management processes support the many needs associated with your information, such as regulatory reporting, client compliance, or general data management.
When it comes to your bits and bytes, more is not necessarily better. Sometimes, as the old saying goes, less is more.