How law firms can better manage their data

To help cast some light on the topic, we spoke with Joanna Kingston Davies, Group COO of the MAPD Group, and Nigel Stott, Consultant at Baskerville Drummond Consulting, who each have many years of experience in law firm managerial roles, processing and handling data.

What do you want to achieve?

The first thing to think about when starting any data project is what you want to achieve from it. Are you trying to discover particular problem areas for the business? Perhaps patterns and trends in fee earner performance, or customer sentiment? Whatever your aim, you need to have a clear idea of what it is you are looking for, that way you can work backwards and figure out where to find the data you will need.

The MAPD Group break their data down into four areas – Profit, People, client and quality – what they call the ‘stable table’. Joanna Kingston-Davies explains, “We use that expression because it's more helpful to people. It’s essentially a balanced scorecard approach. If the table is wonky because one of the legs isn’t working, it will all fall down.”

“Profit is your traditional financial metrics, then people, client and quality are of equal performance within our business. Using that balanced scorecard approach gives you a fuller picture of the firm’s performance.  If you looked at profit alone, you could have somebody delivering what on face value looks like an amazing performance but actually leaves a trail of destruction behind them. So under people we look at some key measures – how they engage with their team leader, others within the business and how they participate in training academy sessions.”

“We also measure things under the people section like attrition. It can be quite intangible as a metric, but if you look at the cost of replacement and its impact on the business, it’s not just a recruitment fee, but there’s also what it costs to train somebody, how long before they’re inducted and how happy they are. We use technology to measure this on a regular basis, taking a pulse of how people are feeling, which has been vital through lockdown.”

“Quality is all about the standard of what we do. It covers regulatory compliance, complaints and client experience. We use Feefo to measure client feedback but not just at the end of a case, we also get feedback at various milestones through the case.”

“The balanced scorecard helps to understand the whole picture rather than just one element of it.”

Nigel Stott adds, “A law firm looking at starting a data project needs to understand what business decisions they’re looking to make. What data touchpoints do they need to take that strategy forward?”

“The law firm’s culture is really important. Historically, there’s been some apathy around data in law firms. I think that’s partly due to a lack of understanding around the importance of data and the value it has to the business. Essentially, there needs to be a deeper understanding and a general openness about how data is used in the business and why it has value to the firm. Data should be treated as an asset, with  someone to  take ownership of it, understands it and can drive it forward.”

Whatever it is you’re trying to achieve, you also need to ensure that the project is manageable with the resources you have. Joanna advises, “You need to think about what is the single biggest thing that will get you somewhere and just focus on that one area so it doesn’t become overwhelming. Making those incremental gains can have a huge impact on the success of a law firm. Just focus on one area and get success with that, then move on to another and build it out over time.”

“Link it back to the strategy of the business. Where are you looking to get to? Are you looking to grow or stay stable? Find a data set that will talk to that. Find out what simple things will help with that the most.”

“Having worked in small to multinational firms, I’ve found the way data is used isn’t actually very different. The scale and volume of data change, but the fundamental principles are the same. Where do you want to get to, what resource do you have to manage it and who do you want to champion it?”

As both Joanna and Nigel mention, the more data you have, the more you will know about the performance of your firm, filling that dark room with light. However, you need to gather that data in a way that is manageable, balancing your need for data with the resources that you currently have to manage that data.

The most effective way to do this is to appoint a ‘data champion’, someone who can lead a data project, understands the needs of the business, the data needed to identify those needs and all importantly, offer insight on that data. While data will light the room, that insight will show you which way to go.

Who should manage your law firm’s data project?

Not everybody ‘gets’ data. To many, those spreadsheets and charts may as well be instructions on how to build a space shuttle. Those people, it’s safe to say, aren’t the right people to lead a data project.

Many firms might ask their IT team to lead on a data project, but Joanna questions this approach.

“There’s a fundamental point about getting the right person or people to really own your data project and lead it which it isn’t necessarily the person you would naturally put on to it. What we see all too often is a data project given to the IT team, which can be really dangerous.”

“The IT team don’t own the data in the first place or the outcomes or consequences of what happens with that data. They should be facilitating its implementation, but data should be owned in an appropriate place.“

“You would certainly need somebody who has a preference for understanding data and its value and its integrity. That could be anybody within your organization. It’s just important that the person or people that own it have a genuine passion for it and can genuinely start to shift the needle in terms of the culture and the mindset around it. That’s important as anything.”

“The use of data has to be embedded into the business in terms of something that genuinely brings value. If not embedded as something that’s a genuine value add, it won’t really go anywhere. People will get reports in their inbox and won’t open them. So much needs to happen around it being visual or appealing to people’s own preferences. Everyone has their own preference around how they absorb or consume data.”

“So we need to try and set that up as a business but in terms of people actually piloting a project, they have to genuinely believe in it, its power and what it can do to change an organisation for the better. They could be a secretary, paralegal or partner, it doesn’t really matter as long as it's someone who can really drive it and get ownership and buy-in from other people in the organisation.”

“We have a data manager who’s really passionate about data. You have to have somebody whose excitement in that area will get people on board. It doesn’t matter if you’re a small business and don’t have the luxury of a data manager if you can find that person with the passion to drive it and get that momentum going.”

“We’ve delivered simple training courses about the importance of data and data integrity just so that people understand it. If we’re delivering reports to people and they don’t even see it after a while, they become very apathetic. So if people understand and are educated around it, the art of the possible and the opportunity, then they will then get on board with it.”

Nigel also added, “It’s important to have people who own the data who can also understand the data. Those people can usually look at data and spot anomalies instantly. It’s important to have people who can look at data, really understand it and spot nuances or anomalies in that data set.”

Joanna agreed, “A couple of years ago, we had a specific legal department that when looking at financial metrics, looked like it was underperforming. It wasn’t billing enough and we were investing heavily but with no return.”

“To many, they would see that as a failing part of the business and decide to cut their losses, but our Financial Director interpreted the data and saw that we needed an extra five people to speed up and finalise cases and turn them into cash. That department now runs at a greater margin of 50%, 10x what it was, which shows the importance of interpreting data correctly.”

A few important points present themselves in these discussions with Joanna and Nigel. First, whoever you appoint to manage a data project must understand your business and be able to interpret the data correctly. You may even appoint several people to lead on different data projects in different areas of the firm that might fit more closely with their understanding. But something else that is really important is that everybody in your firm understands the data to some extent.

Every fee earner, secretary and support staff member needs to be able to understand the metrics that apply to them and how their performance is assessed, which will give them a platform for growth and help them identify areas for improvement.

But, as mentioned earlier, not everybody ‘gets’ data. So make it part of your induction process or have regular training for team members on what this data means and why it is important. It could even be as simple as a meeting with a line manager to go through the various data points and what they mean.

Given that not everybody has a natural inclination towards data, it is in your best interests to make that data as easy as possible to consume and understand. There are many solutions to this problem and the key to all of them is technology.

How technology can help your law firm better manage your data

Technology makes many things much easier, and managing data is one of them. From the initial collection of data through various data points, spreadsheets and charts, technology now allows law firms to collate all of their data in a single place.

System such as Tableau or Access HyperView bring all of that data together and give it the context it might not have had previously.

In Access Legal’s latest whitepaper, How law firms can achieve success in a post-pandemic world, Access Legal’s Head of Product, Lauren Colbeck, discusses the changing needs of law firms in relation to data, “We’re fast reaching the point where we can combine data from multiple sources to build a fuller picture. Enriching case and practice management analytics with insights from HR, finance and CRM enables firms to understand profitability, identify growth opportunities and allocate workload based on fee-earners expertise.”

“These areas of the business would typically have their own systems and analytics but there’s growing appetite to have everything in one place, instead of exporting data from one and importing it into another, or having different spreadsheets open. A central platform, with a single sign-on, is much cleaner, simpler and more effective because it takes much of the effort out.”

Nigel Stott expands on this point, “Strategically, it’s important for law firms to consider how they will pull data from their different systems. It’s important to consider where it all sits and how we pull it all into a central point. What we’re starting to see now is firms pulling data from different data sets together and getting new insights into that data. For example, you can pull time recording data and HR data so if you see a dip in time recording, the HR system may give you some context as to why you see time recording dip in a certain team or for a certain individual.”

“There’s an array of tools coming to market that help firms mine that data and look at where it’s going. A good example of that is what Microsoft are doing around Project Cortex. Cortex is focused on how businesses can access, manage and extract knowledge that they have in their systems. All of the data we’ve talked about so far is quantitative, but there’s all that qualitative data, all those documents. You should be able to look at where that data is stored and start to draw that information out and put it into certain topic areas to make it easier to organize. And that’s where things like Project Cortex and Sharepoint Syntax come into play.”

That trend towards more joined-up systems and reporting shows no signs of abating, but to ensure that data is correct and not misleading, a process is needed to ensure the integrity of the data.

Joanna explains, “Data integrity is crucial. Your reports are only as good as what’s put into it. One of the key challenges is the cultural piece – is the data that’s there in the first place valid, relevant, timely and up to date? Law firms have all seen the horror stories of writing to a client who passed away several years ago and it’s all about making sure we engender that culture change.”

“But we have lots of different ways of capturing data and we’ve found we need to build in data integrity measures into our systems and our people’s ways of working. Data integrity has to form part of what you’re measuring, otherwise, there’s no incentive to do it. It’s about explaining to people the importance of it and why it’s so key to have data that works and what the results of that could be.”

“It helps with business outcomes but within that you’ve also got the need to explain to people what the benefits of putting that data in the first place. So we’re looking at systems that can pull together data in one place and make sure we can use it and that everyone gets what they need at the right time to make it meaningful.”

We’ve seen now how important it is to understand what you’re trying to achieve with your data analytics, who should manage it and how tech can help with that, but something we’ve only touched on is how that data is presented.

Presenting your law firm’s data

Presenting data in an appropriate format can make a world of difference. Presenting data as a bar or line chart can show you trends in your data. Are things heading in the right way or is a particular area on a downward trend and need improvement? Similarly, presenting data as a pie chart helps to easily make comparisons between different data points. Which departments are contributing most? Which fee earners are contributing most? All of that context is lost if data is presented simply as a table in an Excel spreadsheet.

“When looking at delivering data and metrics to the business that you need people to take action on, you need to be specific about what data you want people to pay attention to. What data matters most to people and how do we visualize and present that data? People absorb info in different ways so that needs to be thought about.”

Nigel continued, “Keep it simple. Understand what’s important to your business and where the focus needs to be. We’re seeing lots of tech coming to market that will help with visualizing data and pulling everything together, using things like AI and machine learning that is becoming more readily accessible to law firms. This can be used to analyse data coming in, looking for anomalies, making sure data is cleansed before coming into systems.”

“Thinking strategically, if introducing new data sets, where does that data need to sit, and how are we going to pull that data together along with other sources? The tech is out there, you just need to understand in simple terms where that data comes from and how you’re going to manage it with the tech available.”

“Accessibility is important as well. We’re all wedded to our phones at the moment and I don’t see any reason why we can’t now start pushing data out through different sources, so rather than having to log in to the IT systems, and having to go through a number of steps to access the data I need, why can’t I just access that data from my smartphone? That way I can get immediate access to it or get notifications when I’m above or below a certain trend or KPI that’s been set by the business.”

Joanna added, “You can’t underestimate the importance of the presentation of data. People have different preferences and if someone sends me an Excel, the numbers are likely to swim on the page, but if someone sends me something visual, that’s really helpful to me personally.”

“A small change we made to the presentation of our data that made a big difference was to move from a RAG (red, amber, green) rating to Gold, Green and Amber. Small tweaks like that were really valuable because if people feel like they’re back at school and there’s a pass or fail rate, it can be very belittling.”

“It’s important to get peoples’ input into what makes a difference to them in terms of presentation of data, positive or negative and tailor things accordingly. You should then follow up that data presentation with conversations about it to contextualise and to realise the opportunity, rather than smash people over the head with it which is a big no-no.”

By now you should see the importance of data visualization, and there are many ways that you can present your data so it’s important for you to know what visualization methods are best for each data set and what’s best for the person it is being presented to so that they can easily understand it and gain insight from it.

Some key non-traditional KPIs for law firms

You should now understand the fundamentals to getting started with a data project. Joanna and Nigel have imparted many useful pieces of information. Remember to start of simply, focusing on one thing at a time, with a clear idea of what you want to achieve. Make sure you have someone who is passionate about data and understands it leading the project and give them the appropriate tools to pull all that data together and present it in an appropriate format.

The data you should be looking at goes well beyond just the traditional financial metrics. Including things like employee engagement and client satisfaction, data will give you a much fuller picture of your law firm, enabling you to spot problem areas more easily and make the required improvements to make your firm more successful.

In this respect, Nigel added, “We’re now in hybrid working mode with people starting to go back to the office and working from home. In terms of measuring peoples performance and going back to those standard metrics of chargeable time and the way we capture our fees and whether we’ve been paid for those, we’ve got to look at a different way of measuring people’s output.”

“So do we now need to start looking at measuring people more around objectives and achieving certain things that have been set by the firm to measure not just their performance but how they’re delivering the service to the client?”

“What we’re also seeing is KPIs around engagement with staff starting to take precedence over some of those traditional measures because, at the end of the day, the way we interact with our client base, the way we interact with our colleagues, the way we deliver back to the firm all has a knock-on impact on the bottom line. Its shifting where we’re focusing on those measures and moving away from some of those traditional measures.”

Joanna added, “Traditionally in the legal sector, there’s been a linear way of looking at data through financial metrics, which drives one-dimensional behaviours that can be dangerous. If you measure one thing, people adapt to deliver that. If a KPI is chargeable hours, a number of transactions, people will do all they can to meet that regardless of anything else.”

“What we’re seeing from the pandemic is an absolute need to measure things differently and more widely. For example, previously in terms of how clients are feeling and reacting, how people within the business are feeling, that’s much easier to measure, even if not in a formal way, when you see people every day, but much more difficult when remote. Business leaders need to make sure they’re checking in on people and have to find a place to do that as well.”

Watch the webinar with Joanna and Nigel.