Analytics: The Ally Law Firm Leaders Need
Do you know what (and who) drives the profitability of your law firm? Can you distinguish among the clients that truly make a difference to the bottom line and those that merely add “noise” to the top line? While you may know who the biggest revenue producers in your law firm are, do you know which among them make the most meaningful contributions to the bottom line? Can you measure the impact of changes to multiple key performance indicators, your drivers of success? Can you provide real and timely insight for decision making based on those performance indicators? Are you able to access a full range of data and information when you want it, totally independent of an already burdened IT organization? Can you or your team respond in minutes to the myriad of ad hoc requests for information from all sides of the organization?
If you can’t answer yes to these questions, there is almost certainly a serious information gap that exists between actual business performance and timely actionable measures needed to drive strategic solutions, which needs to be bridged.
The professional services industry, and legal in particular, has undergone dramatic change, and market dynamics everywhere have been altered in a lasting way. Competitive pressures, more cost-sensitive and better informed clients, rising expenses and static fees have challenged law firms as never before. These changes have driven the need for integration of analytics and business intelligence management tools into the business process of professional service firms. Such integration enables access truly relevant data, discovery of real knowledge, more informed decision-making to provide a meaningful competitive advantage, and improved service to clients and potentially enhance law firm profitability.
The embrace of business intelligence and analytics as an embedded management tool, however, requires a mindset that not all law firm leaders, practitioners or managers embrace, or even understand. It requires a re-set at all levels of the organization and needs to be an investment priority in much the same way it has become in the corporate world. Given the proliferation of user-focused BI tools in the marketplace today, that investment is modest, however, compared with the historical “IT-centric BI platforms for large-scale systems” according to the Gartner Group, which “have tended to be highly governed and centralized, where IT production reports were pushed out to managers and knowledge workers.” While ad-hoc querying and other analytic tools have been available, “they were never really fully embraced by the business analyst masses, primarily because they are perceived by most as being too difficult to use,” the Gartner report adds.
In recent years, as a result, demand for user-friendly business intelligence tools has shifted the focus of platform emphasis from “IT-authored production reporting, to governed, business-user-driven data discovery and analysis,” the report adds. So today, there is little reason for law firm management not to join their corporate client colleagues in the use of the most sophisticated business analytical tools to better manage the business of law.