Data – The Silent Partner
Whether provincial or multi-national, the law firms of today have established themselves based on the expertise within the organisation, and the ability to deliver the desired results.
The reputation of the firm is vested mainly in its partners and associates, and this is what attracts new business. The people are the assets of the firm.
However, today’s business is data-driven. Data provides not only provided critical information to support operational processes such as billing and time recording, but also data on which the business can make strategic decisions.
Data is also an asset in every law firm. Data is a key player and influencer in every practice group and business service.
Data is a silent partner and part of the firm’s DNA
Operational data
Data is essential to the normal operations of any successful organisation.
Traditionally, in the legal sector, this would include Client and Matter data, Time recording transactions, Human Resources, Purchasing, and Billing. The data would be system-centric and not re-used across systems or functions.
As organisations have evolved, systems are more tightly integrated, dependent on each other for critical data items such as Client ID, Matter ID, Disbursement codes.
For billing, in the old days producing a bill would involve the lawyer, secretary, and revenue departments, and perhaps the client’s accounts payable department. Between them, they would agree on the bill content.
Data would be provided in several inconsistent forms, including email, and manually prepared drafts. Because humans were involved in the process, small inconsistencies, typos, and incorrect calculations could be resolved with a quick phone call or email between the relevant parties.
For example, without any real effort, a human can make sense of the following:
It deson’t mttaer in waht oredr the ltteers in a wrod aepapr, the olny iprmoatnt tihng is taht the frist and lsat ltteer are in the rghit pcale. The rset can be a toatl mses and you can sitll raed it wouthit pobelrm.
S1M1L4RLY, Y0UR M1ND 15 R34D1NG 7H15 4U70M471C4LLY W17H0U7 3V3N 7H1NK1NG 4B0U7 17
A computer cannot!
In today’s world, processes are increasingly optimised to reduce human intervention and increase processing speed, but this relies on “good” data.
Transparency
A prime example of where data is becoming more important is client demand for more transparency driven by consistent format and standardised data when submitting bills. eBilling platforms profess to deliver this, allowing a client to receive details of work carried out on their behalf in a format that is consistent irrespective of the submitting law firm. The client can then compare firms on a like-for-like basis.
eBilling intermediaries act as portals between the client and firm and provide several checks to ensure data is complete and conforms to the client’s rules before acceptance.
Ironically, because data is not considered sufficiently important, the result can be, and often is, significant delays in recovering the debt. The features built into the e-billing sites to provide transparency and straight-through processing for the clients are often the barriers to the submission of bills.
The result is frustration and degradation of the relationship between partner and client, with clients often demanding write-offs and discounts to process the bills outside of the eBilling process. Client collections are severely delayed, and practice group targets are not achieved.
Often the approach has been to throw more resources into Revenue to fix and firefight the issues, or outsource the problem to a 3rd party eBilling specialist company at additional expense.
The discounts, write-offs, revenue resourcing, external specialist services all detract from the bottom line profit figure.
But, the problem is data-related and starts with the fee-earners, not Revenue. Fee-earners need to follow client guidelines on how bills should be presented, providing correct codes and narratives for transactions, avoid submitting short form (block) narratives, and expense codes expressly excluded by the client. In the haste to issue a bill, these are often ignored, leaving Revenue to resolve the issues.
The data needs to be accurate before its given to Revenue to raise the bill.
Big Data
The term Big Data has been around for some time and identifies the capability of organisations to treat data as more than just an operational necessity. Essentially it is the same data that the firm holds for its operational systems, sometimes augmented by outside data sources, but it’s used in an entirely different way.
For data to be used in this way, it has to be good quality.
Good quality data has to be a core philosophy and supported at the very highest level of the organisation, and this is established by implementing a clearly defined Master Data Management strategy. Data management becomes an essential function within the organisation, identifying the source, ownership, and setting minimum quality standards, issue resolution, and governance.
Jim Barksdale, the former Netscape CEO, once said:
“If we have data, let’s look at data. If all we have are opinions, let’s go with mine.”
When properly managed and aggregated, data becomes a full-blown asset to the firm, containing years of experience and content that can be tapped into to provide strategic, actionable insights for the firm. The firm can be confident that the data is accurate, and the decisions can be made on a solid foundation.
The importance and value of data to an organisation have gone through a dramatic transformation in recent times. This transformation has been accelerated by the advent of powerful analytical engines that can slice and dice the data to suit the business requirement.
Tim Berners-Lee, the inventor of the World Wide Web, said:
“Data is a precious thing and will last longer than the systems themselves.”
But data needs constant and pro-active management to maximise its value.
An organisation cannot take advantage of new technologies overnight.
• Historical data needs to be standardised and harmonised before it can be analysed in a standard way with any confidence.
• Bad quality/missing data needs to be remediated.
• A clear Master Data Management Strategy must exist, along with a function and resources to support the monitoring and quality of data.
Just like people, assets of the firm improve with investment. Data should be regarded as a critical asset that also needs investment to become the strategic partner in the firm.
The return on the investment will deliver improved client relationships, reduced operational costs, improved cash flow and client collections, and the ability to make informed business decisions.
This article was written and edited by Brian Jones, Chris Wotton and Paul Caden at Databilities
For more information please contact Databilities:
Email: info@databilities.co.uk
Web: https://databilities.co.uk
For more articles in the Databilities ‘It’s all in the data…” series follow us on LinkedIn
