Editor’s Note: The authors of this column work at DLA Piper and a consulting company.
By Barbara Taylor, Chief Marketing Officer for DLA Piper LLP (US), and Dave Kuhlman, Partner at Axiom Consulting Partners
As big data continues to revolutionize the way businesses operate, large law firms are increasingly realizing that they, too, possess massive amounts of data that they could use proactively — if they knew what to do with it. The question confronting many law firm leaders is how to extract meaningful professional and economic insights that will have a positive impact on firms and their clients.
Law firms have a great deal of potential to mine their own data and answer critical business questions by applying new analytic techniques that reveal relationships and patterns they never could have seen before.
In the legal world, we have traditionally relied on attorney instincts and experience, conventional wisdom, what clients tell us they want and some limited quantitative information on best practices and past successes. But however widely accepted these methods may be, they are subjective, with inherent flaws. Client satisfaction is driven by many factors, not all of which are clear and many of which are not even visible. Simply asking clients whether they are satisfied usually yields an overly simplistic answer. In addition, relying on the intuition of even the most successful attorneys pulls a firm’s marketing and client development efforts in multiple directions.
Some firms are trying to address this problem using data, but often in a scattershot way. That can lead to a host of perfectly reasonable but disjointed actions, resulting in doing too many things, in too many places, for too many people, using too many assumptions.
Applying predictive analytics to a firm’s data and combining it with the experience and knowledge of lawyers, is one way that firms can overcome this challenge. Using this approach, firms can identify the patterns and actions that will have the greatest impact, and focus their efforts in those areas.
A predictive analytics approach applies sophisticated technology to the rich data that every firm already possesses. This process reveals powerful insights into client behavior that can enable firms to quickly identify, and implement, significant improvements in their client-engagement tactics. This allows firms to focus their marketing and business-development resources on a few specific, critical actions that are most likely to make a difference.
As an example, Axiom Consulting Partners and DLA Piper did this by working together to build a predictive model designed to objectively identify precisely what DLA Piper’s clients need and value. It enabled us to detect patterns in big data sets and accurately predict what actions we can take that will have the greatest impact in the future.
To begin the project, we assembled all the data we could: client information, matter-level time and billings by attorney, backgrounds and experience of attorneys, interactions with the client and the like. We built models designed to answer two basic questions: How were satisfied clients different from those who were not? And what did we do differently that seemed to increase their satisfaction?
The resulting predictive model helped us uncover opportunities to take a few specific actions that have maximum impact – based on clients’ actual behavior, not what they or our attorneys said. For example, we discovered that, as clients grow bigger, they increasingly value the presence of industry experts on their outside legal teams. We also learned that receiving relevant interactions outside of the matters we are working on – such as tailored insights or business intelligence rather than client alerts – correlates to more satisfaction in the relationship.
The project also provided valuable lessons in how to build consensus at a law firm. Few firms can expect every partner to support a predictive analytics undertaking. But success can be achieved by assembling a coalition of the willing – the partners and practices most open to change and most likely to see the value in data analytics. It is also critical to articulate a very clear strategy about how projects will be executed and implemented, and to focus on identifying a clear problem to solve and a limited number of actions.
As technology continues to evolve and improve, there are more opportunities for law firms to leverage data analytics to obtain objective, actionable insights that guide business strategy. In our experience, predictive analytics provides an effective means of uncovering a small set of actions that will have the greatest impact.