An Intro to Law Firm Analytics
Data Analysis for the Everyday Attorney
You don’t need to be a data analytics geek to harness the power of Key Performance Indicators: you just need a few tools.
A techie friend once argued that the difference between lawyers and computer programmers could be explained by the difference between ‘nerds’ and ‘geeks.’ Both types may be brainy, fixated on detail, and prone to pedanticism on our favorite subjects. But while nerdy lawyers are tracing precedent in their old dusty legal tomes, the geeks are remaking their lives into electronic gadget. While tech geeks are catching the midnight viewing of every new Star Wars sequel(/prequel/midquel), lawyerly nerds can still quote the Atticus Finch scenes from To Kill a Mockingbird.
My friend’s main point was this: there’s something essentially conservative and backward-looking in legal culture, while geeks are all about the future.
I’ve seen my share of geeky attorneys (there’s even an entire blawg devoted to geek subjects such as the nuances of contract law in Doctor Strange and whether Darth Vader could plead an insanity defense), but I think there’s a shred of truth in my friend’s claim. Holding on to the past serves us well when we have to tie every sentence of a brief back to time-honored precedent — but when we’re managing a modern law office we might need to put away the nerdery and begin thinking like a geek.
The best place to begin?
My vote’s for metrics. Specifically: the family of measurements grouped under the term Key Performance Indicators, or KPIs.
We’re living in the age where you can rate each pretzel joint and cafe you pass on the street, and rogue data firms mine Facebook likes to shape international politics. But so far it’s largely only been the big firms that use hefty data analysis to make decisions. Now, thanks to more accessible and intuitive technology, solo and small-firm attorneys can benefit too, at very little cost.
Our upcoming series on the whys and hows of KPIs for everyday lawyers will walk you through the basic metrics every attorney should be gathering and analyzing. Look for advice on these areas you can’t afford to ignore:
Do your clients like you?
A massive amount of our cases still come from client referrals — we need to know how current and former clients feel about us.
The big word in business is the Net Promoter Score, or NPS, a universal number to gauge client satisfaction. Within legal practice, our intuition suggests client satisfaction is an issue of winning or losing cases (if I win, I’m liked; if I lose, I’m loathed), but it’s not as simple as that. Analyzing your NPS may reveal ways to win clients’ respect even when you can’t win their cases — and alternatively, ways you may have repelled them even while getting them a hefty settlement.
An added bonus: asking for feedback in a way that’s both streamlined and personable is a way to show your clients respect and deference.
How smart is your advertising?
Was it a good idea to hire a hip-hop artist to sing your phone number with lines like “doesn’t really matter if it’s your fault,” over images of brutal car accidents? Or should you have stuck to the Yellow Pages?
KPIs help you track the success of your advertising dollars by figuring out what kind of outlets generate good clients.
Does each member of your team have the right priorities?
Does it make good financial sense for your firm to take on those drawn-out class action product liability cases? Where should you top lawyers be spending their time? What happens when you outsource more activity to paralegals and staff?
Running reports through your case management system can help you track average settlement successes for each attorney or for each kind of case — or even for each judge you work with. With a little more finessing, you can average this out for the amount of time and labor required by each case.
And speaking of time:
How are you using your time?
What are the cycle times for your cases? Do some attorneys in your firm manage to wrap things up more quickly, with better settlement amounts, while others let matters drag on? Where are your big bottlenecks, and what can you do to fix them?
Thinking through why KPIs are all the rage in tech and business worlds but have such a slow adoption rate in legal circles, I remembered a piece Ryan wrote last year about how ‘lawyer-thinking’ differs from ‘scientist-thinking’ — and why we should all try to pick up a bit of the latter skill. To summarize the article, thinking like a scientist:
- Allows us to change our minds with new evidence, instead of sticking to precedent (allowing us to incorporate new technology and ideas into our practice).
- Avoids either-or-thinking (opening up all the complex nuance of a situation)
- Allows us to withhold a conclusion and admit when we don’t know something.
- Encourages us to constantly seek out new information (not just during ‘discovery’).
- Prioritizes probabilities and statistics.
- Recognizes how larger systems affect our behavior, rather than explaining behavior through individual willpower.
If we’re going to use metrics to guide our management decisions, we’ll have to hone our science-mind, and know when to use it. Or, in other words: we’ll have to sometimes speak geek. Otherwise, we’ll stick to the way we’ve always done things, using our high-powered brains to determine before-hand what will work best, and keep assuming success will come simply through our stellar work.
Plaintiff-side firms right now have big decisions to be making, and need real data to back them up. The good news is that a few easy techniques and an intuitive and streamlined case management platform mean you don’t have to transform to full-geek to take advantage of metrics like Key Performance Indicators.
Check back with us often in the upcoming weeks to read up on the most reliable and simple ways to crunch your own numbers, and get your geek on (without necessarily needing to know the legal defense of those assimilated by the Borg).