How to use Business Intelligence to grow your legal service business
As they move through their career ark, law firm partners tend to devote more and more of their time to leading and managing a business rather than practicing law. And that is only natural, given how they are, more often than not, solely responsible for their business growth and client success.
I always wondered, however, do law firm partners ever get struck by the “dry spell” period? Do they ever feel like they’ve hit the wall and are all out of ideas on how to further their legal service business to the next level? And, if yes, what would they do to escape the draught?
To me, it was always beneficial to step back and take a good look around before I could continue, whether I was writing, recruiting, trying to crunch through a challenge, or facing a tough decision.
Luckily, law firms provide many opportunities for reflection and introspection to their leaders; some come wrapped as “business intelligence.”
Before diving deeper, let’s ensure we are on the same page (if this is already familiar to you, feel free to skip to the next point).
What is Business Intelligence
In its narrowest sense, business intelligence is the collection and use of business data to derive essential insights to reach critical business decisions. Colloquially, the BI (the abbreviation for convenience) is also used to label contemporary software solutions and platforms that help with data collection, presentation, and visualization.
(Adhering to this convention, STP customers also refer to our solutions that enable them to collect, visualize, and interpret organizational data as “the BI solutions”.)
Regardless of your definition, business intelligence is always focused inwards. It is looking into your organization, inputs, and outputs and attempting to paint the present state’s picture. The BI initiative is only as good as the data collected (hence the “attempts” qualification); therefore, it is paramount to be diligent, disciplined, and honest about all inputs.
Why use business intelligence in the first place
Once you have your goals defined (more about that later), you will need the help of data for at least the following two reasons:
- To understand your present state and to define what you need to do to reach your goals;
- Once you implement your new action set, follow if you are on the right track.
Likewise, while you are busy executing your newly formed strategy, the data you collect could give you fresh insights you might not have considered before. Being abreast of all business aspects is crucial throughout the whole lifecycle of your legal service business.
Using business intelligence – the essentials (and must-dos)
Define your priorities.
There are so many aspects that you could be measuring. Hence, the top priority in this early implementation stage will be to decide what you will focus upon. You’ve heard the adage – “if all you have is a hammer, everything looks like a nail.”
For instance, if your organization runs on the billable hour, you are likely interested in utilization rates and similar KPIs. If this is your cup of tea, you would probably look into all aspects that will equip you to collect data that revolve around the clock (pun intended). Namely, the time tracking system supporting comprehensive hourly rate setup (e.g., by roles, seniority, practice areas, etc.) will be the bread-and-butter level of tech. Ideally, it will need to include or connect to BI modules that will use historical data to draw upon insights and visualization that will help you retain the firm grasp over your law firm operations.
If, on the other hand, you are looking to understand how your clients perceive your firm, service, and what is their overall experience, you are far more likely to gain valuable insights from your firm’s Net Promoter Score. In that case, you are also looking into different toolkits, namely those that will help you send timely customer surveys.
Analyze the status quo.
After you have set your priorities, you will need some time to gather preliminary data set (assuming you haven’t had any before). This initial sample will serve as a basis for your initial health check; after all, it is hard to set a course if you don’t realize what you would need to address.
Adapt internal processes.
By this stage, you will likely have had your assumptions (in)validated, and you probably have a grasp on issues your organization needs to address. Solutions could include changing current processes or introducing new ones; likewise, your people might need to use tools they haven’t so far to drive the execution towards set goals. This stage is critical, given how your people may need to form some new habits (including yourself). You will need to be pretty hands-on until you can confidently say the change has fully set in.
Collect new data and close the loop.
As soon as you’ve started to execute your new approach, your organization will begin to produce new datasets. Make sure you and your team are mindful about capturing every single bit. Moreover, newly collected data will show if you are tracking along with your goals or lagging behind. New learning will drive your future decisions, so you are building a foundation that will help you face tomorrow’s challenges.
Zoom out at times.
Let’s say you have been quite diligent – dogmatic even – about tracking and listening to your KPIs. However, if you feel you may need a fresh perspective, it might be the right time to question your practices. Perhaps the business circumstances have changed? Are you questioning your business model? Has the market evolved past your current modus operandi? If any of these are true, it might just be that you are being very good at monitoring the wrong things. It might be the right time to stop and adjust your business perspective.
Benchmark against the market.
Your BI can tell you in great detail about your internal health. Can it tell you, though, how do you compare with your peers? It could only if you were able to acquire market intelligence. Unless you could sponsor independent research, you would likely rely on reports about your industry segment, its main driving forces, and competitors’ behavior.
TL, DR key takeaways
Any BI software system has the potential to shape your practices and enable your people to form new habits. Hence you must take reasonable care when selecting the backbone of your business operations (i.e., no two BI systems are built equally).
Your BI will be as good as the data you feed it to, and discipline plays a crucial part (garbage in – garbage out, put in other words).
Like any practice, BI takes time before it starts to pay dividends. Don’t lose patience, and reassess from time to time.
Happy hunting, and a wonderful summer to all.
Intrapreneur & Managing Director,
STP Information Technology Bulgaria EOOD