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As law firms grapple with how to most effectively address the challenge of improving bottom-line growth, administrators are being challenged as never before to provide much more than the routine financial reporting of the past. Firm leaders need tools that allow them to analyze scenarios in ways that inform and support critical business decisions. Existing financial management systems alone do not provide this type of information in any practical format. For managers to realize the tangible value of the information contained in their vast data stores, they need tools that provide for complex analysis and intuitive presentation of the data. How many times have you wanted to create an important report from your financial management system only to stop yourself because it was going to take too long or the information just wasn’t available? This is a common problem for users of time and billing software because traditional systems are built as powerful transactional databases, not as analysis tools; they allow for complex transactions, but getting information in a meaningful report format can be time consuming and challenging, especially if you have millions of transactions in the transaction history. Furthermore, law firms today need analysis capabilities, not just the “flat-sheet” reporting to which they’ve grown accustomed. Simply stated, reports that provide statistics and raw data must be augmented by tools that provide meaningful “business intelligence” if management is to be able to use the information to benefit their firm. THE NEXT GENERATION The newest category of software coming to market, appropriately named business intelligence software, represents a major departure from current products. These second generation products feature built-in analytical reporting and improved presentation tools. Unlike the first generation data warehouses, these tools are designed for the business person, not the programmer. Some vendors who have not invested in new technology will try to pass off their software product as a data warehouse when it is actually just providing a collection of previously generated reports or a backup copy of each month’s time and billing data. Administrators need to cut through the marketing hype to be able to identify the technology that will best benefit their firm. Business intelligence software applications provide the ability to “push” information to the appropriate user via various methods of electronic distribution. This allows the right users to get quality information in a useful format. Business intelligence tools are typically “add ons” to other software applications and do not therefore take the place of larger financial management applications, such as those used for time and billing. Let’s examine the three major components of software in the business intelligence category. 1. A data warehouse is a database that is separate from a transactional production system. It is built specifically to provide lightning-fast analyses of interrelated “cube-type” information. (A “data cube” is a term in data warehousing referring to a three-dimensional stacking of the data types.) In a law firm, the data cube typically contains information about clients, attorneys, billings, and expenses in the lowest form of information detail. Since the warehouse database is designed solely to retrieve information in these categories, reports from the warehouse can be generated in seconds, as opposed to hours from a traditional time and billing system. The data warehouse has the ability to build data components into summary levels on the fly to meet the ad hoc needs of your firm. In most cases, the time and billing system cannot retrieve this type of information without heavy custom programming. The optimum database for this environment, even for the largest firms, is Microsoft SQL Server 2000. 2. The user interface contains screens that allow unsophisticated users to point and click on various data elements to secure additional information. Well-designed products allow the user to rename the data elements according to their specific needs. For example, one firm’s “WIP” is another firm’s “unbilled.” Typically, the user can select information as long as it is interrelated in the cube. For example, a fee collections analysis based on task codes interrelates to both clients and attorneys. Information might include recorded hours and value, along with billing and cash receipt realization. The user interface and analytical layer should also allow each data element to include or exclude filtering of the data. In a fee collections analysis, the user may select only partners’ time and clients assigned to a specific area of law. 3. The presentation layer, or information output, is also more sophisticated. After the user interface has retrieved the detail data and assembled it into the format requested, the user can choose one or more presentation options. Options may include screen query only, saved reports, graphs, export to secondary databases, spreadsheets, or PivotTables. These may be printed, saved to an intranet portal, or sent via e-mail on a prearranged distribution schedule. If the information being distributed just doesn’t lend itself to “flat-sheet” reports, the user may distribute the information in a PivotTable format, which is a Microsoft Excel format that allows the user viewing the report to quickly and harmlessly rearrange it by merely dragging various column headings around on the screen. The data will follow, allowing a much more detailed analysis than the original report. Using again the example of the fees collections analysis, in a PivotTable report an attorney might quickly rearrange the display to show each task code, and then show attorneys, followed by clients and matters. PivotTables might be the best-kept secret in Microsoft Excel. HANDS-ON VALUE As friendly as today’s business intelligence tools have become, they still may not be in a direct-use category, where they offer hands-on value to the average attorney. This is where the advent of recent developments in this space, like Microsoft Digital Dashboard technology, comes into play. Dashboards are user-friendly business intelligence tools that can offer a full array of strictly point-and-click tools that are directly attached to the data warehouse. These Dashboards or “Web parts” can be dropped onto an Outlook screen, browser window, or firm portal. They offer the best of all worlds: instant access to information in the data cube, drill-down from summary to detail information, and complete security. A firm may have a library of individual Dashboard Web parts that can be parceled out to different types of users. Working attorneys may be allowed access to an ongoing analysis of their recorded, billed, and collected hours: They may see their average billing rate for the past 12 months and view a 13-month trend analysis of their time. Other Dashboards might analyze everything from client billing and payment history to write-off adjustments and file opening and closing activity. Firm-level Dashboards can give administrators and managing partners a very top-level view of such information as “firm investment summary,” with the ability to see monthly changes on a rolling 13-month basis. For the most part, Digital Dashboard technology is well-received by IS staff. Once the Microsoft Digital Dashboard resource kit is installed on the local PC, the balance of the software and all the processing takes place on the server, making it as easy as maintaining an intranet site. The firm may also preset schedules when the existing time and billing system will update the data warehouse database. This process is typically quick and unobtrusive — in fact, for a 250-timekeeper law firm, this process shouldn’t take more than a few minutes each evening. Law firms today need to manage their businesses much like their corporate counterparts. Managers need the ability to quickly analyze financial information in more meaningful ways. Business intelligence software allows a firm to quickly, intuitively, and precisely analyze financial performance and trends. To investigate the options for your firm, contacting your time and billing vendor is a good starting point. If they can’t meet your needs, you may find that the higher-end legal technology consultants can design and implement a custom solution. Jim Hammond is president of RainMaker Software Inc. (created by the merger of ASA Legal Systems and CompuTrac), which has developed business intelligence products for law firms. He may be reached at [email protected].

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