DATA: the ever-present concept that increasingly seems to govern businesses across every industry and discipline, including the legal profession. In the last decade, data has become more critical than historically to operations, decisions and the success of legal practices.
Specifically, structured data—quantitative, in the form of spreadsheets—and unstructured data—qualitative in nature—both play a substantial role in the business of many firms and bringing the two together can provide a significant competitive advantage. Front of mind for law practices is the valuable, unstructured data that’s pertinent to your client files—helping you gather information and evidence to build each case—and structured data, such as your law firm budget, advertising expenditures, billing and accounting information. Both types of data contribute to your firm as a whole, and their management plays an integral role in the success of your practice.
It may seem daunting at first, but it’s imperative to track data as you grow your business and capitalize on new opportunities. The good news is that tools for viewing and interpreting data have come a long way and make the process much more accessible to attorneys.
A good place to start with respect to data is evaluating your case management system. Below we’ve outlined why and how to get started.
Taking unstructured data, such as intake forms and client agreements, and organizing it with the aid of a solid case management system can substantially benefit your firm in the following ways:
If you’re just starting down the path of organizing your firm’s case data, even the first step can feel like a daunting challenge. Evaluating and implementing either a new system or case management software is an undertaking in and of itself. There are many avenues through which you can seek out information and recommendations:
Take the time to carefully source a software solution. Not only is it likely to be a large monetary investment, there will also be a substantial investment of time to implement it. You want to be confident that in the end your firm will benefit from the effort.
Many benefits from focusing on your law firm data are obvious (and stated above). Better data equates to more streamlined processes which in turn drive efficiency. Improved processes can also mean more productive and content employees. If your practice operates at its best, your clients are likely to be satisfied with your services. Satisfied customers can translate into referrals and new business opportunities.
But a less obvious positive impact of having an organized case management system may come when you decide to increase your firm’s financial resources.
Let’s say you’re going to seek out working capital so that your firm is better able to act on new opportunities as they arise. Or perhaps you want to deploy an advertising campaign to bolster your case portfolio. Many law firm financing companies tailor their resources specifically to address the challenges of contingent-fee practices. In doing so, they will evaluate your firm’s entire case portfolio in order to determine the amount of funding they can extend to you. The funder is likely to assess your assets—specifically the value of current and expected fees—to determine your financing needs and the level of risk it will absorb by lending to you. Due diligence conducted by a funder will help determine that your firm is suitable for financing and can perform under the agreement.
By having your firm’s data organized and consolidated into an easy-to-use system, you’ll likely be able to expedite the time it takes to secure financing, as well as build trust with the funder.
If you are seeking financing, try to make sure you include in your system the case caption, docket number and jurisdiction (if filed), as well as the projected settlement value for each case and the fees you believe your firm will receive, prior to supplying your funder with your case list for evaluation. The financing company will make its own assessment of the value of your cases and verify docket information through state and federal websites, but you can accelerate the process and increase your credibility by providing accurate information at the outset.
Additionally, most financers require some level of monthly, quarterly or bi-annual reporting while you are a borrower. Having processes in place from day one to precisely track the use of funds and case status will lessen the stress on your firm in having to provide this information to your lender periodically.
Your law firm client data is integral to your firm. There may come a time when you and your partners evaluate the possibility of a merger with a synergistic firm, or you may consider acquiring another firm in order to expand your areas of expertise or geographic reach. At some point later in your career you may want to take a step back from practicing and weigh the decision of selling the firm or engaging in a partner buy-out. In all of these scenarios, having a firm grasp on exactly where the firm stands in terms of its case portfolio is key. You don’t want to be pressured to get your data organized while also evaluating a major move—instead make data management a standard now and reap the benefits of doing so in the future.