Value of Business Intelligence: New Tools for Change in the Legal Industry

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Business intelligence

Outside of legal, it is the norm that clients and market conditions drive change. It’s widely accepted that if an organization doesn’t acknowledge that norm, that organization dies – think Kodak and Blockbuster.

Now, in what seems to be a foreshadowing, that accepted norm is seeming into legal. The fundamental differences are that law firms, unlike corporations or other market-beholden organizations, are arranged as a partnership that holds to cultural mores brought on by the lawyers that make up the partnership. However, this arrangement does not make law firms invincible to such changing tides. We’ve watched the extinction of firms in legal as well – think Bingham McCutchen.

It is evident that with an evolving market, if a business doesn’t reinvent and make the proper changes they will go extinct by financial or structural issues (or both) as market pressures cause implosion. As famously stated by business philosopher Peter Drucker:

to survive and succeed, every organization will have to turn itself into a change agent. The most effective way to manage change is to create it.

Accounting is a perfect example of just this, a similarly structured organization to legal that nevertheless led the change it needed. The focus for accounting – and thus the template for legal – is on who is leading the change, with the tacit implication that the best path is for the industry to forge its own path. Indeed, for law firms in the new environment, it is not enough to let the more sophisticated client push for change, rather the onus should be placed on the law firm to change first. So, what is a law firm to do?

There are plenty of options out there in the form of change management around processes and people. But before over complicating it, law firms would be wise to looking inward for insight that already exists.

BI as a Tool for Change

Business Intelligence (BI) has always been an essential tool for law firms, and one that primarily serves the library and research functions within the firm. Historically, BI has been used to capture a moment in time through canned reports, dashboard-based information views, and data visualization to bring static information forward on various topics like clients, markets and lawyers. The current purpose of BI ranges from displaying information on the market, decision-making, exploration of past performance, and tracking goals; however, as the needs of law firms and the market become more complex, that role is evolving.

As legal futurist John Alber stated at a recent conference on business intelligence and analytics in the legal industry, sponsored by the Ark Group and held in New York City, BI should be seen as a survival kit. It is how law firms can lead this change, and more importantly win.

So, it is high time for the way BI is viewed within law firms to venture beyond the traditional boundaries in order to fast-track exploration of valuable insights and apply them to business advantages. Along with the uses listed above, BI has a lot to offer in terms of a robust set of data on the market as well as internal resources. The wealth of knowledge housed within a BI tool can help a firm navigate the constantly changing landscape and manage their internal response.

It is high time for the way BI is viewed within law firms to venture beyond the traditional boundaries in order to fast-track exploration of valuable insights and apply them to business advantages.

Thinking of it like this, thrusts BI into the realm of a design tool not just an information repository. And as a design tool, BI can help reorient the general operations within a firm to a more centralized process to help implement key account programs, sales initiatives and determine resourcing and hiring strategy based on market needs. Couple BI with an experience tool, those workforces (i.e., marketing, business development and lawyers!) are armed with the information they need to sell.

Getting into more specifics, the information BI harnesses can help a practice lead understand not just lawyer performance but a broad view of the market as well. This allows the lead to see the field on which the client is playing, and develop strategies that cater to the delivery of legal services.

BI can also transform cross-selling procedures as market patterns are understood and new pathways are formed based on an understanding of exogenous factors impacting clients (policy, economy, etc.) This also expands the way organizations and practices can collaborate within the firm, pulling on the current view, tracking progress and even utilizing additional automation to encourage how functions can work together to collect and use information.

Regardless of the type of project underway, BI can offer a tracking tool to monitor the progress of the process or program designed. To this end, BI can help clarify the battlefield by identifying disruptors in and outside of the firm that stand in the way of design and progress.

The way firms leverage the information they have today is ultimately how they will survive and win in the marketplace. BI as a design tool has the potential to provide key strategic advantage by providing vital internal and external information.

These are just a few examples of turning BI on its head and using data to drive actions (not just decisions). BI has legs that can enrich law firms and help them lead change amidst a rocky market. Most crucially, taking the rich information BI offers has the power to help law firms innovate in order to remain relevant.