Among the training, panel discussions, great meals, and yacht parties, the ELM19 User Conference also presented an opportunity for attendees to gather in focus groups and share their experiences, as well as speak to ELM Solutions experts about their specific challenges. The focus group on Legal Analytics, led by Nate Cemenska, featured an informative conversation about the ways legal and claims organizations can use comparative rate data to support decision-making.
Focusing Attention Where It’s Needed
Nate shared a Tableau visualization with the audience as an example of how data can be leveraged to uncover opportunities for improved performance. The chart he presented showed average staffing ratios of a number of industries, as well as a specific company example. It makes sense to check this statistic because timekeepers in more senior roles have higher rates. If you see that your staffing mix is more weighted to partners than the industry average, you may want to investigate.
In Nate’s example, the company had a much higher partner utilization rate than the average for their industry. When you see something unusual like this, there may be a very good explanation for why the matters in question are staffed as they are, but it bears investigation. You can read this blog post by Nate for an in-depth description of how to use this data.
The investigation will often take you beyond the data itself. Sometimes, the root cause may not be evident in the data. For example, the outside counsel firms may simply not be paying attention to the issue and have partners that aren’t good at delegating. Or the work could be assigned to small firms, which tend to be dominated by partners because there are fewer employees. Even if you find a root cause that can’t be avoided without jeopardizing outcomes, you can explain to senior management why the costs represent money well spent. And of course, if the driver of increased costs is something non-essential, you can make some changes and reduce the organization’s spend.
Supporting Important Decisions
During the focus group session, Nate also talked about how rate benchmark data can be helpful in a more targeted way within a key legal operations workflow. When a law firm requests new rates for their timekeepers, the current and proposed rates aren’t necessarily enough information for you to make an informed decision about the request. It is far more helpful if you also have access to information about how the proposed rates compare to other timekeepers with similar experience in the same geographical area.
For clients in the data contributor program, the Passport Timekeeper Collaboration module displays benchmark information alongside proposed timekeeper rates from law firms. This works similarly to many online rankings of restaurants and service providers for consumers, with dollar signs indicating how each firm compares to similar firms. Those whose rates are in the bottom 10% show one dollar sign, those in the 10-25% range are shown with two dollar signs, etc.
If, for example, a firm requests a rate increase for a particular associate and the system returns four out of five dollar signs ($$$$$), that means the proposed rate is higher than 75-90% of associates with similar years of experience, geographic location, firm size, area of expertise, etc. Under these circumstances, it may not make sense to approve the rate – at least not without serious discussion internally and with the law firm. On the other hand, if a firm that reliably provides great service and outcomes requests a rate in the bottom 10%, you can choose to approve it quickly and with high confidence that the new rate is fair.
Benchmark data can often provide the perspective you need for answering very specific questions, and even for identifying the right questions to ask to make operational improvements. Learn more about ELM Solutions’ LegalVIEW® Dashboards and about becoming a LegalVIEW data contributor.