Why Legal Departments Need a Legal Data Analytics Strategy?
As a consultant who has worked with legal departments across industries for many years, one commonality I have consistently observed is that all legal departments are in possession of an incredible amount of data.
That data may be located in a number of disparate locations ranging from documents and invoices to emails, matter files, and databases – making effective use of the information feel overwhelming. This is why it is so important that legal departments embrace and develop a data strategy.
According to bestselling author Bernard Marr:
“Data is revolutionising the way we all do business. Every business is now a data business and needs a robust Data Strategy. However less than 0.5% of all data is ever analysed and used, offering huge potential for organisations when trying to leverage this key strategic asset.”
I could not agree more. Data may represent the greatest untapped resource for driving legal department improvements and achieving results. By creating a data strategy, we can ensure that data is treated like a resource and an asset that aligns with business objectives and potentially creates a competitive advantage for the enterprise.
What I am suggesting is that legal departments need to embrace a data strategy that applies to their lawyers and practice areas – and not just rely on IT leaders to provide it. In some instances, the IT department may not comprehend the nuances and expertise needed to turn legal department data into a rich resource. Legal leaders have to be involved.
The best example? Legal spend data
The best example is the data collected on legal spend. The benefits of using data to drive a legal team’s procurement strategy and reduce spend have been talked about for several years now. In the light of what has transpired, globally, in 2020, and its financial ramifications, it is likely that many companies in various sectors will be thinking – perhaps some not for the first time – about new ways that they can work better, smarter, faster and cheaper. Topics such as legal spend, the increasingly beneficial use of technology and finding more efficient ways of working are, inevitably, going to come under the microscope.
Managing legal spend is about far more than reducing law firm hourly rates. It starts with a well-planned strategy around who does what work, how, where, and for what price. It encompasses internal and external spend. It requires the acquisition of relevant data and intelligent analysis of that data to make informed decisions about how a legal team – and its external advisers – should operate.
The key questions you should be asking yourself
Some of the questions you will want to ask yourself in forming your data strategy include:
What data do you currently have compared to what you really need?
What could you do differently if you had the data to enable more strategic business decisions?
What people do you have – internally and externally – doing your work?
At what price point is that work done, how efficiently and with what outcomes?
How might you look to procure legal services differently? For example, might you look to ‘bundle’ up your work into different parcels and outsource it to different providers with bespoke pricing models fitting those work types.
Are you benchmarking your legal spend against other legal teams in similar sectors with relatable legal issues? Where do you stand?
Having carried out a thorough review, what – if anything – needs to change?
What advantages and potential cost savings could technology offer?
Data, and the intelligent analysis of that data, will bring answers to these important questions. Data drives discussions. Data drives decisions. Data tells a story, and stories told in a clear and concise manner can convey messages very powerfully. They can enable change.
For example, once you really understand what you are spending on each legal matter you can begin to identify:
Work that should really be dealt with by the business (whether through a technology solution or not).
Work that should remain in-house and be dealt with by the legal team (whether through a technology solution or not).
Work that should be outsourced.
On 1st July we will be providing a webinar to discuss legal data analytics questions such as these, and offer ideas and potential solutions to problems you may be facing. If you don’t currently have a strategy for obtaining the data you need, or are overwhelmed by the very term ‘data strategy’, during this webinar, we will show you a structured approach to building a data strategy that will enable you to obtain and exploit data to drive better procurement behaviour and optimise your legal spend. I would be excited to hear from you and encourage you to attend by registering today.
Headquartered in the UK, with presence on the ground in Asia, Europe and North America, Jalubro is recognised for its innovative approach to delivering data-driven spend management solutions and successfully transforming legal operations with technology. Jalubro’s goal is to provide a fresh approach to change, challenge the traditional consultancy model and successfully transform legal operations with technology.