Law Firms Need to Leverage Data Science & Analytics to Solve Internal and Client-Facing Problems, Panel Says

Topics: Artificial Intelligence, Business Development & Marketing Blog Posts, Client Relations, Data Analytics, Efficiency, Legal Innovation, Marketing Partner Forum, Midsize Law Firms Blog Posts, Thomson Reuters

Marketing Partner Forum

RANCHO PALOS VERDES, Calif. — The worlds of data science and business of law collided in a lively panel discussion, Signs Taken for Wonders: Evolving Law Firm Data-Driven Strategies in Profitability, Performance and Practice, at the recent 25th Annual Law Firm Marketing Partner Forum.

The panel, moderated by Peter Ozolin, Chief Executive Officer and Chairman at market intelligence firm Manzama, examined the challenges confronted by firms and their clients, with special emphasis on the once-fantastic possibilities offered by predictive analytics for law firms that are prepared for its impacts.

“The Golden Age for Data Science”

Dr. Andrew Duchon, Manzama’s Director of Data Science, laid a solid foundation for the discussion while seemingly downplaying the complexity of data science and the vast capabilities of its applications.

“Data science is really just statistics — a combination of algorithms and techniques that’s used to analyze data,” Duchon explained. Broad application of these techniques has served as the catalyst for what Duchon referred to asthe golden age for data science,” a time when great tasks are accomplished through easily accessible data and readily available computational power.

“All it takes is imagination and hard work to tackle any problem you may have… and it can happen now,” Duchon added.

Innovation as a Competitive Advantage

Timothy Murphy, Partner and Co-Chair of the Aboriginal, Government Relations, Project Finance, Infrastructure & Energy unit at McMillan, distinguished his firm’s investment in innovation as a push for competitive advantage. “We were driven by factors other than data science,” Murphy explained. “As a mid-market-sized firm, we’re faced with many of the challenges as other firms — pressures on margins, pressures on fees — [and are] trying to figure out how we survive in that context.”

Murphy said McMillan’s management team pursued innovation to address not only the firm’s internal challenges, but as a path to providing improved service to clients. “Can we be a leader in going to our clients with thinking about how budgets and fee structures are put together?” Murphy asked. “And what do we need to do that?” He described undertaking a collaborative firmwide effort that yielded a predictive billing and pricing model that not only solved internal obstacles within the firm, but also created a marketable product for clients.

Marketing Partner Forum

Drinker Biddle & Reath’s Chief Data Scientist Bennett Borden

Indeed, such projects that leveraged data science and analytics to solve client-facing problems was a theme echoed across the panel.

Paying for Outcomes, Not Hours

At Drinker Biddle & Reath LLP, Partner and Chief Data Scientist Bennett Borden said the firm established a technology subsidiary — “a firm within the firm where we changed the rules of everything.”

Law firms have two kinds of analytics to employ, Borden explained, looking inwardly to identify efficiencies — which he admits “is not the most interesting piece of this” — and looking out toward clients, and using data analytics to solve their problems.

Analytics identifies efficiency, Borden said, “but the number one enemy of efficiency is the billable hour.” Firms need to capture those efficiencies, but then need to charge clients differently, he explained. “If you pay for hours, you’ll get hours. If you pay for outcomes, you’re going to get outcomes.”

Dr. Zev Eigen, Founder and Chief Data Science Officer at Syndio Solutions, quickly echoed Borden’s point. “Lawyers may want a better billing system… but that’s not what our clients want. Our clients want more value and less billable time.”

So instead of offering the billable hour, the real value for law firms is to think “we’re a business solving problems first and foremost for our clients,” Eigen said, adding that’s a form of vertical innovation that can make a difference.

Heroes at the End of the Day

As the panel noted, bringing these disparate concepts to life is a very real struggle for law firm marketing partners, Ozolin said in closing, adding that opportunities exist as well.

“Lawyers view what they do as a ‘profession, not as a business.’ But marketers can really be the hero at the end of the day” because they’re bringing in ways to fundamentally change the what the business is offering, he said, adding that this ability not only serves clients well, but also forces lawyers to understand value of the marketing professional within the firm.