Make Data-Driven Decisions with Legal Analytics
Posted by Legalease Solutions on 30 Apr, 2019
For a legal department trying to find out where it’s going wrong with budgets or litigation outcomes, legal analytics is a viable solution. The legal business can no longer survive on the basis of guesswork. Much like any other business, legal departments are now expected to operate and report conclusions derived from analytics. This is a blessing in disguise because one of the best ways to improve operational efficiency is to extract actionable insights from veracious data.
As Jeffrey Solomon of ELM Solutions puts it, “Analytics and business intelligence drive better decision-making, and benchmark data can provide perspective on industry standards.” Analyzing and reporting on your department’s matter and performance data can help understand its resources and matter planning as well. Take for instance, the Fortune 500 automotive company that discovered a sustainable model to defend itself against lawsuits through the appropriate use of analytics.
Be it legal research and strategy, case analysis, governance, contract reviews, or an improved synergy with outside counsel, legal analytics has a significant impact. But how do you get to these data-driven decisions? Legal consultant, Sterling Miller suggests a method.
Finding the right data
Identify and locate all the data that goes through your legal department. Some common places important data resides in are eBilling systems, Matter Management Systems, departmental reports, legal tool reports, relevant inventories of Finance, Marketing, IT, Compliance, and public and government records. Once you obtain this data, categorize it into four categories: descriptive, diagnostic, predictive, or prescriptive. This will help you get to your next step.
Deciding what to measure
Categorizing the data will allow you to understand the uses of these four types of data. This will help you determine what you can measure from this data. Think about what information would help your department run efficiently, effectively, and securely. Most departments measure things such as spending efficiency, efficiency of outside counsel, workload distribution, structuring of budget, compliance, contract review metrics, process improvements, comparison with industry standards etc. Once you decide what needs measuring, you locate the data, clean it, restructure it and perform the analysis.
Leveraging Artificial Intelligence
For legal departments with large datasets, AI is the best taskforce. AI can conduct deep dives into your datasets to recognize patterns and give you immediate answers. According to a recent survey, attorneys believe that they can best use AI to make sense of large pools of data and in turn reduce costs, improve legal research, develop better business strategies, minimize contract risks, and even deliver better legal services. They regarded AI most favorable for automating invoice reviews and contract completion, preparing documents, and taking over recordkeeping. They also speculated that AI can predict future trends, costs, and issues.
Integrating legal operations
Michael Sheridan, President of Quovant, emphasizes, “It’s vital to have an overview of how the data that you work with is gathered, where it is stored, and how it is managed. The goal should be to move all your data from spreadsheets, which are stored all over the place, into one secure and shareable system that has the right permissions in place for the employees and vendors.”
Therefore, legal operations can play a pivotal role in legal analytics. Large legal departments should consider hiring a legal operations team to orchestrate data analytics within the department. Analytics can be hard to digest for many, so the team could set up dashboards to make the results of the analytics communicable throughout the department. Dashboarding gives a handy, visual summary of the numbers, making the data palatable and applicable.
Embarking on the legal analytics journey can be unfamiliar, so it’s best to start with data that you already have and that which you know to measure. Brainstorm with your team to understand what conclusions you are looking to draw from this data and assemble simple reports and dashboards that can be immediately useful for your department.
LegalEase Solutions is a legal services provider offering corporate legal departments and law firms innovative and data-driven support with their Contract Lifecycle Management, compliance, document review, on-demand legal operations, legal research, and case analysis. With over 14 years of expertise, our team functions as an extension to legal departments and ensures that their processes and resources are up to date with their needs.