Business intelligence (BI) has become an essential tool for corporate legal departments that aim to meet organizational business goals. The data provided by robust metrics can help you accelerate legal department performance, driving results with data-aided decision-making and helping you deliver value against corporate goals and benchmarks. This approach to legal operations helps you control external costs, increase internal efficiency, improve matter outcomes and inventory, and enhance predictability to avoid surprises.
The five key disciplines that can help you achieve excellent metrics are:
Access to Business Intelligence
Business intelligence is the use of processes and technology to analyze large amounts of data and derive valuable information for making decisions and predictions. BI can measure the effectiveness of an organization’s strategies and identify individuals who are most or least successful in driving results. It also provides transparency into invoicing by outside resources, enabling improved management. Legal operations professionals have the skill and experience to make strategic decisions -- BI gives them the necessary tools to help ensure that those decisions have the desired outcomes.
To achieve good data integrity, data fields must be well defined so that everyone entering data does so correctly. The more straightforward your data field definitions, the more accurate your organization’s data capture will be. Developing and maintaining field definitions, as well as user input screens, should be an ongoing process that supports continuous improvement. In addition, encouraging accurate and consistent data entry by all users is absolutely critical.
Effective Use of Segmented Data
Segmentation takes the rich information that the previous two disciplines helped you generate and breaks it out into manageable categories. For example, matters in different practice areas are handled differently, therefore their costs and results are often evaluated differently. Segmentation supports strategies and metrics tailored to these particular groups of matters. E-billing can help you segment invoice data as well to answer questions such as how value is tied to tasks billed by law firms. Finally, time segmentation allows you to view trends and evaluate performance over time.
Aggressive Use of Five Types of Reports
Leveraging a combination of report types helps you generate the right mix of information. Your legal operations strategy should include the following types of reports:
- Outcome reports provide the high-level information managers can use to determine overall performance and results of the legal operations program. Examples include average matter cost and budget performance reports.
- Performance reports provide granular level detail that measures the results of matter activities. They are most useful when performance is evaluated against stated goals or objectives. Typical examples include average open matter age and role rate trends over time.
- Exception reports should promptly identify areas of concern (e.g., individuals who are failing to comply with crucial disciplines or events that impact management plans).
- Combined reports provide information addressing several different aspects of one or more matters, groups of matters or law firms. For example:
- Matter summaries, which show items such as spend over time
- Law firm evaluation report cards, which measure quality, cost, rate, etc.
- Analytic reports identify opportunities to reduce cost, loss and inventory. They are normally shared with senior managers and not widely published. Some examples are matters generating 80% of costs and law firms driving 50% of costs.
Senior Management Buy-In and Support
In order for a BI program to be successful, you need support from senior management so that you get the required resources in terms of people, time, and technology. The effort must integrate analytical skills, management experience and report development skills and should be reflected in the performance goals and reviews of internal employees.
The use of business intelligence should be routine within every corporate law department. With the right tools and expertise in place, the formalized measurements you introduce will lead to better performance results. For more on using BI to improve performance, download our whitepaper Metrics Maturity for Corporate Legal Departments: Five Key Disciplines for Creating Excellent Metrics.