Analytics is a competitive advantage for law firms that has not been fully capitalized on yet. While there is opportunity for growth, the gap is closing. Over half of the industry is using analytical tools on a daily basis. The stakes are high, and law firms cannot afford to miss out.
Is the legal industry still resisting technology?
Generally, the legal industry has a bad reputation of being slow to adopt new technologies. There is resistance to conform to new systems and to understand analytical software. Attorneys are taught about every facet of the law, but not necessarily the integration of analytics alongside the law. Seemingly though, the industry is taking strides in the right direction. More and more firms are seeing the advantage in these applications. Traditional record keeping is time consuming and monotonous. As long as your business intelligence solutions are actionable, your firm can increase profitability immediately.
It’s an Art & a Science
It’s no longer about buzzwords or click-bait. Data collection and analysis is being used by all companies. Advertisements, email campaigns, and even attorney recommendations do not make it to you by accident. There is a very purposeful algorithm in place as to why each person sees and receives what they do. Clients at the bottom of the line only see the art. Don’t hope that the science will just happen; implement a business analytics system to claim your piece of this advantage.
Once these systems are adopted, administration and attorneys are quickly noticing a competitive advantage. Analytics allow users to bridge the gap between the art and the science of law. Once patterns are compiled and the data is represented in an understandable manner, informed decisions can be made. In general, the more you know, the better, especially if you know more than the competition. After using this software, users can see successful patterns and what factors led to that success, may it be case wins or larger profits. Analytics allows you to repeat victory and avoid historical failures. Even if you are already a good company with smooth and profitable systems, analytics can make you better.
These external benefits are just a piece of the pie. Analytics help to boost your firm internally as well. There is tons of financial data, invoices, budgets, payments, and billable hours being recorded; but data is pointless if it is not being analyzed. It is crucial for upper management to understand the profitability of the company overall down to each individual attorney. Business Intelligence applications (BI) can give administration a view of the firm's operations and where the firm is tracking compared to budget. Keep track of the accounts receivable (AR) and work-in-progress (WIP) and understand the science behind KPI calculations. Lower level management and lawyers don't need to be left out of the loop. BI can show an associate or partner their book of business and where they are in terms of their budget. All levels and positions can make more informed decisions and be aware of where they stand in comparison to the goals at hand.
The Competitive Advantage
When analytics tools save you time, your client collects more for their fees, which improves retention and satisfaction with the service. Attorneys are able to work faster than the competition and worry less about the amount of monotonous reporting to be done. The whole firm benefits, down to each individual attorney.
Business Intelligence gives you immediate results. You can save time, increase communication, better track financials, build budgets, analyze partner performance, and more. Firms who have this knowledge report a high return on investment (ROI) and an increase in firm profitability. This is a definite leg up to those that are not using these systems. Check to see if your firm is Business Intelligence Savvy.
Whether you choose to embrace this technology or not will not inhibit the evolution happening in the industry. Changes are here and continuing to come, and if you don’t jump on board, they are to the advantage of your competitors. Clients might wonder how firms are doing things more quickly and at a lower cost. This seemingly small advantage could sway a client’s decision between you and your competition. If competition has moved onto capitalizing on this data-driven world, you are fighting for market share with your eyes closed.