Let’s go on a journey, the journey of business intelligence metrics. Most law firms have them; it would be irresponsible for a 21st century business to not track how they’re doing. But after creation, they travel from the desks of the associate to the partners to maybe an operations person, then … well, that’s often it.
For many law firms, there’s no imperative to create a mechanism to share data elsewhere. There’s one problem though: corporate legal officers (CLOs) are increasingly asking for that data to inform their own decision-making. To keep clients happy, firms are left scrambling for ways to close that data gap.
There are no simple answers, but one option is to build a comprehensive plan that requires real-time analysis and an understanding of legal business analytics. At the upcoming Corporate Legal Operations Consortium (CLOC) conference in Las Vegas, panelists at the “Real-Time Analytics and Business Intelligence for Legal Ops Professionals” session at 11 a.m. on Day 1 will discuss the beginnings of that plan, dissecting how to collect and normalize data, easy ways to build a data warehouse, and impactful ways to present that data outside the organization.
One of those panelists is Catalyst CEO John Tredennick. LTN recently caught up with session panelist John Tredennick, CEO of Catalyst, to discuss just what a “data warehouse” is, and issues that arise in using dashboards and visual analytics.
LTN: Why the disconnect between CLOs and law firms over data?
Tredennick: There are several reasons. First, CLOs are just beginning to make the transition from legal advisor to full-fledged business professionals. As Jeff Franke, director of global legal operations at Yahoo put it last year, “We need to create and support the right business models and behaviors, regulations, technology platforms, etc.”
Second, the data CLOs need to effectively run their businesses is widely dispersed, kept by many different organizations in a wide variety of formats. A recent survey by Altman Weil found that 39 percent of legal departments were trying to collect and analyze the data they need to improve efficiency but only 6 percent felt they were having success in those efforts.
Third, CLOs are finding it difficult to get the data they need to analyze spending from their legal providers. Fully 73 percent of the CLOs surveyed by Altman Weil reported that none of their top ten law firms were providing useful spend analysis. Until CLOs demand and get the data they need to analyze their business units, they will be operating in a vacuum.
CLOs have only recently realized that they need real-time analytics and business intelligence to properly run their departments and only now starting to request it. The disconnect can be fixed with a little effort, but you have to realize you have a problem before you can solve it.
LTN: When looking to close the intelligence and reporting gap, where do most organizations start? Where should they start?
JT: The best place to start is at home. Legal departments need to make sure they have a handle on their own data before looking outward. We see too many CLOs struggling to get real-time information on department spending and to track it against their own budgets. Learning that you are over budget months after the fact leaves you with few options to fix the problem.
The next step is to work with your top law firms to secure data about the services they are providing in as close to real-time as possible. While monthly billing is an obvious place to start, law firms have a lot more useful data to provide, and you should request it. Case data, document ingestion, review status and other specifics should all be part of status reports and, ultimately, part of the legal department dashboard.
LTN: What exactly is a “data warehouse”? Why is it necessary?
JT: Think of the data warehouse as a central database optimized to hold a variety of information. You collect the data on a regular basis, often monthly to correspond with billing cycles, but sometimes more often. When collected, the data is “normalized” so that it can be integrated into a single data structure, which is often called a warehouse. Once the data is normalized, it can be integrated with data from other providers and provide a basis for cross-firm and vendor analysis.
The key to a data warehouse is reporting. Once the data is integrated into a central repository, reporting is a snap. You can pull data from the warehouse quickly and display it in a variety of formats. These reports can easily be combined into a law department dashboard, which is designed to provide information across matters in both numerical and visual formats. They can provide an early warning when matters go beyond budgets or are taking a turn for the worse.
LTN: The session says it aims to “demystify the field of visual analytics.” Where do most people get tripped up with visual analytics/dashboards?
JT: The content and configuration of the legal dashboard can vary by company, department and need, but the goal is the same: to provide an overview of department health at a quick glance.
Visual analytics is just a fancy phrase for charts and graphs. The goal is to present data in a compact format that makes it easier to comprehend its meaning. Presenting budget information in a chart makes it easier to see how the case is going than a series of numbers. Charting comparative figures across law firms makes it easier to understand which firm is providing better service.
LTN: What are some key takeaways that you want people to leave the session with?
JT: This program charts one legal department’s journey in moving from manual tracking processes into the high-tech world of data warehouses and visual analytics. Our hope is to reach out to other CLOs who face similar challenges and to show them that the problem can be overcome with determination and a little effort.
Beyond that basic goal, we hope to arm the audience with a basic understanding of data warehouse concepts, share methods to centralize data and then show how these concepts can be presented through a legal department dashboard drawing from a CLO who has successfully mastered this challenge.
Legaltech News and other ALM magazines will be presenting insights from legal operation’s leaders leading up to and during the CLOC Conference. Stay tuned for more in the coming days.