By Legal Futures’ Associate Advanced [1]
A law firm is a business, and successful businesses know what their primary objective is, their strategy for achieving that objective, and the tactics to be used along the way to deliver that strategy. So, how does a firm identify that strategy in the first place?
Strategise for growth
Firms can identify their strategy for success through a deep understanding of the business – its strengths and weaknesses, the opportunities and threats it faces. And how does it ensure delivery of the strategy? By setting targets for all elements of the strategy, deploying appropriate tactics to meet those targets, and crucially monitoring performance against those targets. All business 101 you might say, so why and where do most law firms struggle? Assuming they have the right management team in place; very often it is the lack of fast and easy access to the data and information necessary to both inform strategy and monitor performance.
How exactly can Business Intelligence help your firm?
Making good business decisions needs timely access to accurate information. Good quality information is usually based on data, and your practice management system holds that data. Business Intelligence transforms that raw data into actionable information, leading to better decision making.
Financial Performance
Most law firms will have manually-produced monthly reports detailing the state of time recording and billing against targets. However, these reports are nearly always backward looking – what happened last month, rather than what do we need to do this month? Realtime reporting of the firm’s KPIs encourages action rather than reflection.
Client Information
Two key elements of determining and delivering strategy are: who are our clients and how do we measure their value? Billing, profitability and capital requirement are just three examples of how you might define value. Possible ways of categorising clients include industry sector, size, geography, instruction frequency, service, and once defined, different types of client can be compared for the different value they deliver. Business Intelligence can provide this information to law firm management from the raw data typically available in most firms’ finance systems.
Service Information
Products and services can be measured in terms of pricing, competitor pricing, customer feedback and the cost of delivery. While some services may appear to be most profitable based on revenue alone, a comprehensive Business Intelligence approach to analysis may illustrate slim margins and lower profitability after servicing and delivery costs are taken into account. Leveraging the data around this area gives you a better understanding of what is really working in your firm and what you need to improve upon to ensure success. A key element of service delivery is also minimising risk, and an exception-driven Business Intelligence approach to risk can reduce a firm’s exposure, and ultimately reduce insurance premiums.
Increase Accountability, Devolve Responsibility
The continuing changes to the legal services market have exposed the fact that has long been ignored, that law firms are commercial organisations and therefore need to operate on sound commercial principles. Alongside this realisation there is now a growing understanding that law firm management can learn a great deal from management of businesses in other sectors when finding ways to drive revenue growth and profitability. Looking to innovation has increased capabilities for many law firm’s profitable growth.
An example of this one of our law firm partners, Cullimore Dutton. Cullimore Dutton’s implementation of a dashboard reporting solution has proved integral in the firm’s continued success:
“Previously the production of reports was extremely labour intensive, requiring dedicated time and resource. By implementing OverVu, our firm has instant access to key data tailored to our needs exactly.” – Stephen Roberts, Cullimore Dutton
How can we help?
At Advanced [2] we have over 30 years’ experience providing software to 5,000 law firms, barristers’ chambers and coroners’ offices in the UK and Ireland with more than 50,000 legal services staff using our technology. Advanced ALB is a complete, focused practice solution delivering legal accounting, document management, client and matter management and time recording together in a fully integrated system. Through integration with the OverVu Business Intelligence and dashboard reporting system, ALB makes use of the data within your law firm to enable better decision-making and help drive your strategy. OverVu is a simple and intuitive dashboard reporting solution that enables law firms to gain real insight into current performance and plan for the future by monitoring historical trends and current progress. The platform provides a comprehensive reporting suite that not only combines the most commonly reported metrics but allows users to define their own and import from external sources – delivering a comprehensive view of the firm at any moment in time.
Our solution delivers:
- Faster access to data, leading to better decisions
- The ability to view all your KPIs in one click
- Fully configurable dashboards – design and build your own
Advanced Legal MD, Doug Hargrove advocates decision making backed by quality information:
“Any strategically important decision has to be backed by quantitative intelligence. The good news is that firms have access to that intelligence in spades – it’s captured every day and stored in the practice management system at the heart of the business and will tell you the financial performance of the business right down to individual departments and fee earners.
Business intelligence is the one thing above all else that firms must adopt when they’re looking to become more commercially minded. It allows them to become more reactive to those micro- and macro-economic changes, predict performance, outmanoeuvre the competition – and, circling back to the original definition of being commercial, become more profitable.”
Through Business Intelligence law firms can gain greater insight, helping to initiate action and monitor performance. Better understanding of individuals, teams, clients, markets, risk and finance will help firms deliver on strategy and ultimately achieve their objectives.
This white paper was shared with us by Advanced [2].