Master Data Management

Craig Raeburn (Global) - Understanding the Business of Law: Data-Driven Decision Making for Corporate Legal Departments

Corporate legal departments are increasingly pressured to better understand and illustrate the business side of law. Legal departments are quickly learning that data can be among their chief assets, providing the intelligence to improve performance across the organization. As general counsel are called upon by executives and boards of directors to illustrate better insights into spending and ROI, many are developing data performance management programs.

As they develop these programs they follow the evolutionary process of the Legal Performance Management Continuum. The Continuum offers those managing the business of law a roadmap and maturity model for putting data to work. It reflects the evolutionary steps an organization experiences as they utilize data, gaining valuable insights and driving improved performance at each step. All information gathered and analyzed should track and support activities related to current strategies and tactics or influence future ones.

Step 1 - Report: Organizations query internal systems and generate reports that provide a historical view of their data. Reports may be presented as simple spreadsheets or similar off-line formats. They begin to use the reporting tools embedded in existing applications or to push data into systems designed specifically for report generation or integrate multiple data sources into their applications.

Step 2 - Analyze: Users drill data to gain insights into key drivers of cost and performance to identify the top matters or projects that drive legal expense. They then focus on strategies that minimize legal expense and overall case costs while boosting performance.

Step 3 - Visualize: Users want to see regular reports that provide a quick view of overall performance. These may start as a simple chart and evolve to a dashboard that summarizes multiple reports or more sophisticated graphic formats, such as heat maps to understand which regions are driving the heaviest workload of cases, or mining tools that isolate key categories of projects.

Step 4 - Operationalize: The organization considers how to deliver content that enriches decision making and streamlines operations. The resulting performance improvements further reinforce "data pushing" as integral to day-to-day activities and fundamental to decision making. For example, having the system provide details about case loads for better and more informed decisions when making internal case assignments.

Step 5 - Compare: Organizations then recognize a need to track and benchmark performance results, including:

• Key performance indicators can be developed based on the organization's goals and strategies and incorporated into reports or dashboards that enable management and staff to gauge performance.
• Benchmarks to compare performance against competitors or industry standards can be helpful in communicating with parties who may not understand the challenges of managing a law department.
• Organizations may compare a number of different attributes (rates, staffing profiles, etc.) to get a better sense of how each law firm is doing. Legal departments may conduct in-depth analyses to understand which firms generate the best results and how they do it.

Step 6 - Mine: At this step, organizations begin to understand more about drivers within the data and correlations by mining their vast data, often bringing multiple systems together, to understand what drives cost up or down and the influence each variable has on performance. Organizations begin to look outside of their own data to understand how external variables can impact their performance.

Fully understanding these drivers and their impact on costs and outcomes allows organizations to better predict, prepare and plan. As organizations progress, they often introduce additional data elements, including external data. For example, is there a link between the percentage of growth in the Consumer Price Index and the number of labor and employment cases? Is there a predictable impact?

Step 7 - Predict: It is here that organizations are positioned to minimize unnecessary legal spending, maximize outcomes and prepare for the future by building predictive models based on what they learned from data mining. The models are adjusted for specific case types, capturing key data points that can predict future results.

Step 8 - Monitor: The organization may start to implement more sophisticated tools to evaluate options, provide insight into risks, predict cost and more. They are proactive in seeking recommendations or "what if" analyses from their system or for commodity and routine cases perhaps even make decisions without staff involvement, such as determining the appropriate workflow model for a case.

The Continuum is a never-ending cycle, with organizations constantly maturing at each step and cycling back down to continue their evolution and reach new heights in performance improvement.

By Craig Raeburn, Managing Director, TyMetrix Data Solutions



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