Improving Your Legal Operations with the SALI Legal Matter Specification Standard

Topics: Artificial Intelligence, Big Data, Business Development & Marketing Blog Posts, Client Relations, Corporate Legal, Data Analytics, Efficiency, Law Firms, Leadership, Legal Innovation, Practice Engineering, Practice Innovations, Process Management, SALI

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Since the great recession, large clients and their law firms have been pressed to provide more consistent, predictable and transparent delivery of value-based pricing for their services. While law firms have the data to address this problem in their client relationship management (CRM) systems, time and billing systems, knowledge databases, and document management systems, these systems are often poorly integrated.

Specifically, the lack of a common data language — a common set of codes — across these systems, and between organizations, limits the way that law firms and corporate legal departments can use their data. To turn these data into insights, legal departments need to unify their systems to view legal matters through their lifecycles, and apply analysis and informatics to improve their service delivery processes.

This article describes:

  • The problems that having a common coding solves
  • The Standards Advancement for the Legal Industry (SALI) Alliance — the independent non- profit organization that was formed to address this and other legal industry problems
  • The Legal Matter Specification Standard (LMSS) — the initial standard that SALI is developing to provide a common way to code legal matters

Example: Inefficiency in Matter Acquisition

While the problem space that the LMSS addresses is quite broad, this example shows how codes and information systems could be used to improve matter acquisition. The scenario outlined shows a typical flow and key questions in acquiring a matter due to inadequate data coding and system integration.

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“Can you handle this type of matter for us?”

Law firm CRM systems and experience databases generally do not have a common taxonomy of legal matter types, nor do they generally have access to the matter codes attached to past matters in their time and billing systems. In the instances where they do have access to these codes, the information is usually lacking due to poor coding, and inadequate codes because the codes were not designed with this purpose. Rather, marketing departments usually have independent matter databases that use keywords to search for the type of work requested. The marketing systems typically deliver examples of comparable matters that are used to pitch for the new opportunity.

“Which attorneys have the expertise we require?”

Until recently, the most common ways that attorney teams were added to pitches included: (i) attorneys who originated the sale recommended the team, (ii) information that the experience databases showed who had the most relevant expertise based on keyword search, and (iii) other sales considerations. Because of gaps in updating the marketing matters databases, the data being used is often outdated and does not give a true view of experience. New experience databases from Foundation Software, IntApp, Prosperoware and others are beginning to address this problem.

“How much will this cost and what value based pricing can you offer?”

This question lands on the plate of the pricing professional. Although law firms have time and billing systems that have historical information about the extent to which proposed team members have worked on comparable matters, this information is complicated to access because the important aspects of matters that would affect pricing are not encoded. Such aspects include: case duration, number of depositions, venue, client industry, etc. Most commonly, pricing groups within law firms approximate the costs of service delivery by querying multiple internal systems and speaking to key timekeepers.

Solution: A common, open set of legal matter codes provides a critical part of the solution

In the same way that tangible consumer products all have stocking unit numbers (SKUs), that have enabled manufacturers, distributors and retailers to more efficiently run their businesses, the legal industry would be well served by a common, open set of codes to describe the types of legal services they offer.

Codes describing a nail

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Codes describing a legal matter

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The example above is a simplified version of the SALI LMSS codes. Legal matters, of course, are more complicated than manufactured nails and require a more complex coding.

While the example above shows why it is in the interest of a firm to have a common set of internal codes, it’s not immediately clear why a common, open set of well-defined codes would help. The answers, based on a survey of many firms tackling this problem, are that (i) law firms don’t have the expertise or time capacity to develop and maintain these codes, and (ii) the codes that they have developed are often quite different from the codes that clients want to use, both in structure and content. In addition, there is an acknowledgement that there is no competitive advantage to proprietary matter description codes; if anything, it’s a hindrance to efficient legal services engagement.

An open standards effort benefits all parties:

  • Law firms and corporate law departments can leverage the code sets and save the time and efforts of developing them themselves
  • When corporate law departments and law firms need to exchange matter information, all parties are using a common set of codes facilitating better information interchange
  • Technology providers can provide tools to enable the law firms and corporate law departments to implement more streamlined systems

The SALI Alliance

The SALI Alliance, an independent non-profit organization, was formed in May 2017 by leading law firms, large companies, technology providers and industry associations, to provide standards for the legal industry. The LMSS is the first major standard being developed by SALI. More information about SALI can be found at www.sali.org.

Legal Matter Specification Standard (LMSS)

The mission of the LMSS is to define a specification to describe legal matters that is:

  • Open — free and available to all stakeholders;
  • Industry-driven — The standard will be managed by a non-profit industry organization;
  • Extensible — There will be a defined way to extend codes to meet the proprietary needs of stakeholders; and
  • Practical — The standard will come with associated sample implementations of user interfaces and encodings.

What makes this effort unique is:

  • The broad base of stakeholders — companies, law firms, technology providers and legal industry associations — that are participating to provide an overarching solution;
  • Its top down view of legal matters focused on unifying disparate systems;
  • The practical, market-driven approach to addressing real legal operations problems; and
  • The commitment to end not with only a written standard, but also a reference implementation that is usable by law departments.

Draft LMSS 1.0 Revision 2

In mid-June, SALI will release the second draft revision of the legal matter standard. Draft Revision 2 includes a standardized structure for legal matters (see below) and seven major new code sets that describe all major aspects of legal matters. In addition, the standard incorporates several ISO code sets to describe locations and currencies.

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The standard was developed with the input of a large number of stakeholders to incorporate the key elements required to describe a matter as well as the most important data used in marketing, business development, pricing, practice management, and knowledge management. In the structure below, each “leaf” of the tree can be text, a number or a code. The codes define the “common language” of the standard.

Draft LMSS Rev 2 defines more than 1,000 codes addressing seven major areas.

Key Code Sets of Draft LMSS Rev 2

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Codes Are Available for Use Now

The SALI LMSS formats and codes are available now from the SALI Alliance. On the site, users may download the code sets, explore the standard with online visualizations and browsers, practice building LMSS documents, define extensions to code sets, and provide feedback to the SALI.

There are already many companies using the code sets since the Revision 1 release in January 2019. Companies are:

  • Using the code sets to help them develop taxonomies for their companies and firms;
  • Implementing the codes in existing accounting, time management and business intelligence systems; and
  • Using the SALI matter structure to update their IT systems to more fully specify their legal work.

How You Can Support the SALI Matter Standard

The sooner that our legal industry IT systems support the SALI Standard, the sooner we can reap its benefits. To support the LMSS you can:

  • Use the LMSS codes and provide feedback to SALI;
  • Ask your technology providers to support the standard in their products; and
  • Support the SALI Alliance by becoming a member (membership supports funding to develop the standard and gives you a direct participation in the creation of the standard).

Next Steps

The SALI LMSS plans further revisions later this year to incorporate early feedback. Future revisions will also include an Application Programming Interface (API) and reference implementations to assist law firms and companies in implementing the standard.