Data-Driven Decision Making
Before we dive any deeper, lets all get on the same page and answer the biggest question: What is DDDM and what does it mean? Data-driven decision making (DDDM) refers to the collection and analysis of data to guide or make decisions. Data has been used to support structured decisions since people began collecting and recording data. Techopedia explains "data-driven decision making (DDDM) involves making decisions that are backed up by hard data rather than making decisions that are intuitive or based on observation alone. As business technology has advanced exponentially in recent years, data-driven decision making has become a much more fundamental part of all sorts of industries."
One of the most fundamental challenges that law firms, legal departments, and individual lawyers face today is tied to data. Data volumes continue to grow at exponential rates, and “big data” is an issue across just about every legal function. Fortunately, there are already effective solutions in the marketplace today that target many—though certainly not all—of these data-related challenges. Technology-focused companies have been active in the legal sector, and they have learned a lot about how to manage big sets of data. These solutions are empowering the “data-driven lawyer,” for whom the big data phenomenon represents an opportunity, rather than an intractable problem.
All professionals, and now lawyers, work with an astonishing amount of data. However law firms are not currently taking advantage of that information to help support legal professionals decisions, client advice or business strategies. Becoming a data-driven legal practice is not just a matter of linking your data with the right software. It requires a significant willingness to change and want whats best for the firm. All of those require fundamental shifts in an organization’s culture as well as the mindset of the people operating in that organization.
The Power of Legal Analytics
A very frequent emerging theme we see across law firms is recognizing “the business of law” instead of just the "practice of law." This blog post helps to explain more on the topic. Legal analytics is also being used to help firms improve the ways they approach the business of law. It does so by providing factual data from millions of records about the behavior as well as the performance of firms and lawyers. Analytics can also be used to track broad trends relevant to other important activities like strategic planning, business development, and marketing.
5 Steps to a Data Driven Law Firm
These 5 steps shared from a Thompson Reuters article provide a great guideline to become a data-drive law firm!
- Walk before you run — Where is most of your data stored? Probably in your time and billing system. It usually holds an abundance of data about productivity, value, talent, results, and outcomes at the firm. This is the first place to start to pull from to help support important decisions at the firm in regards to staffing, pricing, and management.
- Identify and organize your data — The first and possibly most important step, is simply understanding what data you have. This may involve getting your data structured accurately. Essentially move your data into an organized and structured format that is both shareable and secure.
- Clean up your data — As previously mentioned, there is endless data. But keeping the data clean is most important. Garbage in results in garbage out. Knowing experts with good data skills who will work side-by-side with your legal professionals will help tremendously to ensure the data is clean and accurate.
- Collaborate with those who know data well — Leveraging analytics in a law firm requires collaboration with people who understand data. Making that connection with a vendor and building trust helps to create a smooth transition for the firm. Let the vendor deal with the data and analytics while your firm focuses on law. Ultimately at the end of the day the data should be in a format that is easy to use and understand for the end user.
- Build a data-driven culture — Building that culture of a data-driven firm is not something one person or even department can do, it's the change in mindset. Essentially buy-in from everyone at the firm from leadership to the professionals, all members learn to trust the data and applications and start to transition to data-driven decision making.
The Future Is Bright
Tomorrow’s data-driven law firm will have the opportunity to benefit from all of these technologies. Contrarily, the law firm without access to these technologies will be at a significant competitive disadvantage.
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