Building a Business Case for Data Analytics

By Will Pett posted 04-10-2017 15:52


It is nearly impossible to read about the business world today without hearing the term data analytics thrown around. But what does this term mean within the context of the legal profession? Can data analytics add value to a legal organization? The easiest way to define data analytics in this context is to begin by discussing what it is not. Data analytics is not reporting. While reporting plays an important role in the analytics process, the difference is in what you do with the data. With reporting, for example, you are generally pulling information, such as billable hours per attorney, so that partners can review what their team members are working on. With data analytics, the goal is to transform the data in order to make better use of the available information.

One of the main goals of any data analytics program should be to provide necessary context for improved decision-making. Whether it is resource allocation or process improvement, data analytics aims to provide your organization’s decision makers with the best information possible. Another goal of the program should be to maximize value by changing the behavior of the organization, which is often easier said than done. If current processes have encouraged inefficiencies, and therefore costly patterns of behavior, a data analytics program aims to correct these oversights. In conjunction with changing behavior, data analytics aims to promote user adoption and satisfaction. If changes are not properly promoted, the user base will be less likely to adopt them. Additionally, if the changes are not to users’ satisfaction, they will not maintain improved behaviors for long. Finally, another important goal is to better communicate value to stakeholders. If stakeholders cannot clearly see a benefit to maintaining a data analytics program, it will not last long.

When discussing stakeholders, the list can get fairly long. Almost anyone working in a law firm, corporate legal department, or legal service provider can benefit from data analytics. With law firms, the consumers are endless. It can assist executive leadership in identifying investment opportunities, assist partners by establishing relationships to better understand the work for a client and ultimately provide better client service, and can further tell us if we are pricing specific types of work in a profitable way, which is critical for finance departments as they handle more requests for fixed fee and capped fee work.

A corporate legal department has to manage their legal work, whether conducted internally or provided by a law firm or legal service provider. Using data analytics to decide who should be doing what work and measuring performance is quite valuable. Corporate legal departments are often seen as cost centers in their respective organizations, with finance and procurement departments shining a brighter spotlight on their operations than ever before. A legal department can provide tremendous value to their organizations, which is much easier to convey using data analytics. When budget season comes around, data will be a Legal’s best friend in making the case for more people, training, or technology.

With all whom can benefit from data analytics, who will help you deliver on its promises? There will need to be someone who can authorize the use of the data (Business Sponsor), provide the data (IT), clean or “wrangle” the data and perform the analysis. So who does the last two steps? You’ll need resources who can wrangle, which shouldn’t be hard to find. But not every firm or corporate legal department has a data specialist on staff. Resources will need to be identified and allocated who have the skills to data wrangle and analyze. This, more than money and buy-in, will be the biggest hurdle. Your organization might have an amateur data specialist who can be leveraged to perform some relatively simple analytics in Excel. If not, there is definitely someone who can learn enough with proper training and time to get the ball rolling.

After determining all possible stakeholders the next challenge will be to mobilize all necessary parties and determine the overall scope of the project.  Before any design or implementation is determined it is important to take the necessary time to research topics that may be helpful in assisting with the development of the project.  For example, start with a project where you know the data is effective and accurate, such as what is produced by accounting.  This may help avoid any potential issues before reaching out to mobilize key stakeholders.

Next you must communicate how the use of data analysis will benefit the firm by providing possible scenarios. For example, demonstrate to stakeholders the value of a 5% efficiency improvement in a certain commonly used process. Concurrently it is necessary to be realistic about the scope of the project.  Bear in mind that resources, both time and money, should be taken into account before and during project development.  Limit the scope by focusing on a specific team/department, client, or process. 

You can also reassure stakeholders and users that the data captured is useful by providing various reporting or dashboard services. Establish benchmarks that may assist with the development of successful case studies to prove that it is working.

Data analytics programs will only grow in importance as both law firms and corporate legal departments feel budgets tighten, pushing resources to their limits. By following the suggestions outlined above, you will be well on your way to building a successful business case.

Authors: Will Pett, Conan Hines and Justin Tullo