The legal industry's new reality
In his second article in the series, Sandeep Sacheti of Wolters Kluwer looks at why Big Data Is a Big opportunity.
Big Data is one of the biggest buzz words in modern business, including the legal industry. However, its benefits have so far mainly been felt in legal practice, in areas such as e-discovery. In the business of law, Big Data has yet to make a big impact. As discussed in this series, the legal business faces huge challenges and data carries huge potential for creating value and gaining competitive advantage. The question is, how? Access to the data itself is becoming less of a challenge. Most firms have rich data resources, such as e-billing and payment records, that hold the potential to transform their fortunes. This can be driving revenue, maximising profit for the partners, or effectively managing costs for a corporate law department. But data by itself is useless. To extract value from it, you need the ‘three Ts’: talent, technique and transformation.
As Big Data becomes more business-critical, ‘data scientists’ are in demand - and hard to find. But it’s not always necessary to seek such top-drawer expertise. When you start out, you don’t need the top experts to start making sense of your data. You may just need people with curiosity, good statistical skills and a desire to learn. These are the kind of people who will quickly see how data can be managed and packaged to solve problems. And once they do, they will want to get better at it. Once these talented self-starters have helped you off the mark, it may be the time to look for external support from industry experts and consider building a formal analytics department.
Big Data needn’t mean Big Complexity. Of course, analytical techniques can be sophisticated, but it’s also possible to keep it simple – especially at the start of the journey. Get the basics right first, and then you can become more advanced as you get better at it.
The best advice is to stay focused on what you are looking for. Identify the questions that most urgently need answers. You can use a rich set of data sources to help you, but don’t try and answer too many questions at once. Having a broad view using too few data points is dangerous: you will quickly fall victim to the ‘tyranny of averages’. Remember the old joke: if you have your head in the oven and your feet in the refrigerator, then ‘on average’ you are doing just fine.
Another important tip is to make sure you are separating oranges from apples by properly segmenting your data. Don’t pile all your case data together and assume it will result in consistent conclusions. Employment law cases are nothing like property law, for instance – so don’t try and compare them.
Do compare what others outside your organisation are doing, however. Try to bring in data from comparable cases and situations from the wider industry. There are only so many law suits of a particular type, and only so many experiences internally. Benchmarking data can help you find the comparables and draw valuable insights. But you can only do this by looking outside and plugging relevant data sets together. In other words, look outside in rather than inside out.
Becoming a data-driven legal team – law firm or corporate – is a journey. Change is slow, so don’t expect an overnight transformation. The best approach is to bring the whole organisation with you - if everyone from the partners and CEOs to the interns buy into your data strategy, it will start delivering returns faster.
So you need to look for ways to sell it internally. Make sure you use the data to tell a persuasive story to the people you most want to convince – most often the partners or CEOs. Make sure you can bring the data alive, helping them make the link with business outcomes they care about. This is often as simple as using compelling, easy-to-understand visuals that tell a clear story. Don’t show them spreadsheets; Excel documents rarely win hearts and minds.
Furthermore, find senior partners who ‘get’ the power of big data and can champion the benefits throughout the organisation. These champions drive the cultural acceptance and the change needed to embed data driven decision-making in the law firm.
So much to gain
Ultimately, this is a journey well worth embarking upon. There are both immediate and long-term benefits. In the short term, you can begin understanding business essentials, such as how your fees compare with the market and where you are making the most profit. In-house professionals can quickly evaluate trends in legal spend and its ROI. However, the really big gains are in the longer term - that’s when Big Data can truly transform your business.
Sandeep Sacheti is VP, Customer Insights & Operational Excellence, at Wolters Kluwer Corporate Legal Services