Data analytics is a hot topic in the business world. Even so, it rarely comes up in the legal sector. Many law firms still haven’t taken data analytics seriously—or even know how to. Data usually only comes up in law firms when there are client privacy concerns or data breaches. Attorneys of all stripes need to leverage data analytics for business purposes, and this begins with the understanding of data quality.
To run a successful law practice, firms need to improve data quality and ensure the data captured is relevant to the business objectives. For law firms to leverage data analytics, the data first needs to exist. Attorneys and the law firm staff responsible for capturing data should validate its value to ensure it will contribute to the success of the practice. Data validation needs to be something law firms do with every piece of information they get, so they don’t capture irrelevant data.
Beyond capturing, the firm should make sure they store accurate data. The data should be consistent throughout the different databases in which a copy exists. Besides, upholding data integrity ensures law firms escape malpractice claims.
STEPS IN DATA ANALYTICS
To leverage data analytics, law firms first need to understand the steps in data analytics.
First, every law firm should figure out the questions that need answers. This directs the practice on the relevant data to collect. Ultimately, all information stored in a firm’s database should align with the business’s overall objective.
The next step is proper data structuring because the staff needs to have an easy time accessing the data they need. Once data is correctly structured, it’s critical that the firm runs test hypotheses and use the feedback to make decisions.
Following this systematic model guarantees effective business analytics. Any law firm that rushes through data analytics is most likely going to be a victim of the garbage-in, garbage-out model.
WHY LAW FIRMS SHOULD IMPROVE DATA QUALITY
Law firms that are ahead of the curve understand the importance of data analytics. That is why they’ve invested in cloud-based case management systems. Cloud-based databases help create more structure around captured data and if regularly updated, are invaluable to law firms.
Competition is getting increasingly stiff in the legal sector and investing in modern case management systems gives law firms a competitive edge. Here are three compelling reasons why your law firm should leverage data analytics.
1. IMPROVE LAW FIRM OPERATION
Databases make a world of difference when it comes to finding crucial pieces of information. The law firm staff will take a shorter time searching for information through a database as compared to flipping through paper files. Improving the accessibility of information boosts the productivity of a law firm.
2. ELIMINATE MALPRACTICE CONCERNS
Most law firms that face malpractices claims will attest that is due to inconsistent and inaccurate data. When a law firm captures inaccurate data, the attorneys end up making costly mistakes.
3. GENERATE KEY PERFORMANCE INDICATORS
Having the correct data gives law firms perspective on the health of their business. Some of the key performance indicators law firms need to assess ongoing performance include:
• Revenue per client
• Client acquisition cost
• The lifetime value of a client
HOW TO LEVERAGE DATA ANALYTICS
Data analytics allows law firms to make informed predictions to drive business’ success. Predictive analysis allows attorneys to take data-driven actions for the benefit of their clients and the law firms as well.
Both small and large law firms can use data analytics to:
• Optimize service rates and discounts for clients
• Value and assess claims
• Determine the probability of losing in a trial setting
• Find out lawsuit risks
HELIOS CAN HELP WITH YOUR DATA STRATEGY!
Law firms can only leverage data analytics if they have high-quality data. Every law firm should strive to capture data that is relevant to their business objectives.
If you need help with your data analytics, strategy, or building dashboards and visualizations that allow you to gain crucial insights into the most important parts of your business, contact us today for your free consultation.