Law Firm Data
If I asked one hundred people about law firm data, I expect I would receive many answers. Those answers may include numbers in a spreadsheet, texts on a smart phone, numbers on a chart or graph, all client information, or even the ‘bytes’ spinning around inside a computer hard drive.
All right answers, but there are many more. I think the simplest description of law firm data is that it is information.
Merriam Webster defines Data as
- Factual information (like measurements or statistics) used as a basis for reasoning, discussion, or calculation
- Information in digital form that can be transmitted or processed
- Information output by a sensing device or organ that includes both useful and irrelevant or redundant information, and must be processed to be meaningful
The phrase “useless information” is one you have all likely heard. Until it is managed, I believe much of the information you have can be considered “useless”. In this blog, I will discuss what needs to be done to make the data you have more valuable. Including, the importance of capturing, categorizing, and how to ensure your data is quality data.
So, how do you capture law firm data?
Over the years, improvements in technology have made it easier to capture vast amounts of data.
Today, the size and affordability of disk space allows you to manage more data than you could ever have imagined. According to a blog entitled ‘Amazing Facts and Figures About the Evolution of Hard Disk Drives’, the average gigabyte cost has gone from way over $100,000 per gig to only a few cents.
Think of how many songs, videos, photos, and text messages you have on your smart phone. Additionally, I am sure you know of at least one person who will tell you they cannot be efficient without the 30,000 emails actively sitting in their inbox.
Simply finding somewhere to store the data is only the first step. To make that information valuable, you need to ensure it is stored in a meaningful way. Using software and apps can help. An exchange server to house email, a legal practice management software to manage much of your operational and client data, a customer relationship management (CRM) software to manage customer and contact data, payroll or human resource software to manage all employee data can help correctly categorize the data you have.
So, when talking about capturing law firm data, the answer should be “capture all the data you can.”
Let us now look at the data categories that your law firm should use.
Law Firm Data categories
To make it simple, I will break it down into two main categories: Internal and External.
- Internal Data
- Employee data: including information relating to payroll, medical and health care, social security, tax information, and other private personal information.
- Other Human Resource data: including job postings and resume submissions, recruit application forms, information received during the interview and hiring process, performance evaluations, information relating to any employee disciplinary issues, information relating to terminations.
- Financial and accounting data: including revenue, bank account, expense, costing, rate, and compensation information.
- Marketing data: including client lists, marketing and possible growth strategies, business development information, website and social media analytics, and business models.
- External Data
- Client data: including tax and other financial information, client trade secrets and other intellectual property, litigation strategies, information relating to specific client business strategies, settlement strategies, and many other forms of attorney client privileged information.
- Accounting and Billing data: including client rating information, client billing information, client credit card and banking information, vendor pricing details, vendor contact and tax information, and referral sources and types.
None of these categories
So, I have talked about the importance of capturing and correctly categorizing data. The next step to creating useful data is to ensure that you have quality data.
What is quality data? According to Jack Vaughan, a senior news writer at TechTarget, in an article titled data quality, “Data quality is a measure of the condition of data based on factors such as accuracy, completeness, consistency, reliability, and whether it’s up to date.”
Let us look at the conditions that Jack Vaughan mentions.
- Accuracy – the accuracy of the data you capture is probably the most important of the conditions Vaughan mentions. For the data to be reliable, it needs to be error-free. As an example, using date formats needs to be accurate. 09/10/2021 can be September 10th in the US, but in Europe it is October 9th. A simple error, but one that can be avoided if the correct standards are implemented.
- Completeness – the data you have needs to be complete. The software or applications you use can safeguard this by simply making it mandatory to enter specific information.
- Consistency – the data you store must be consistent. For example, information like a person’s name is often stored in different places. Saving John and Johnathan could create different results.
- Reliability – the reliability of the data will depend largely on how well you tackle the above three conditions. In essence, reliable data needs to be accurate, complete, and consistent.
- Timely – data needs to be available and accessible. Strategic decision-making, is far easier with timely data.
This blog has covered some important first steps that need to be considered when managing data. All the topics that I touched on, capturing, categories, and quality, can and should be implemented by your legal software vendors. If you have gone through the process of changing software vendors, you will know that there are (or should be) many discussions and questions asked about data and the relationship of that data.
There are many reasons why you want quality data, and I will delve into that in more detail in a future blog. I will discuss what you will need to meaningfully use data, and how to use data to aid strategic decision-making. There are tools available now that make analyzing data something small to medium size law firms can do. It is not only large firms with data engineers that can take advantage of data analytics and business intelligence.
If you have any questions regarding anything in this blog, please do not hesitate to contact me.
About Rob McKay
Rob McKay, CLM serves as Product Manager at Coyote Analytics, where he focuses on helping the company’s developers design new and innovative additions to our software applications. Rob previously spent more than 25 years managing law firms in Florida and Texas. He can be reached at email@example.com.
About Coyote Analytics
Coyote Analytics offers a complete financial software system (time, billing, accounting) and a full practice management solution (calendar, docketing, document management, forms, contacts) to assist firms in managing the business of law. Coyote Analytics’ program was built through a collaborative effort with clients. It offers a simple, easy-to-navigate interface, a robust feature set, and great customer service, all at a reasonable price point.