I am a big fan of podcasts. I am also a law student. Naturally, this means that I listen to podcasts about practicing law quite a bit. One of my favorite podcasts is The Lawyerist.
For anyone that is not familiar with Lawyerist, it is a platform that provides insight and resources to law firms to become better in practicing law. While all of the episodes I have listened to have struck me in unique ways, their episode with Fastcase CEO Ed Walters was particularly intriguing to me. In this episode, the focus was on leveraging data to make better lawyers and law firms. The discussion is driven by the publication of the book “Data-Driven Law.”
For some, the idea of using data in a law firm may sound foreign. However, as this episode pointed out, all firms rely on data. Lawyers rely on knowing judges and cases to anticipate how likely they are to win a case. Some lawyers rely on experience to determine how much certain litigation might cost. Practicing law is already driven by data. But what if that data was more accurate? What if it allowed you to standardize the likelihood of success? What if it made clients more confident in your services? The possibilities could drastically improve your practice if used correctly in several ways.
There were three uses for data that I found especially powerful while listening to this episode;
Increasing Firm Efficiency
Law firms need to be nurtured and grown. That means that there is more work in running a firm than just practicing law. You have to bill clients, bring in new clients, cover overhead costs, and pay employees. All of this takes time away from handling cases and actually practicing law no matter how you handle them. Most likely, the firm is going to spend money on advertisement campaigns and tools to improve client experiences to increase referrals.
By analyzing data, a firm could be able to identify where they are getting higher or lower returns on investments. Online campaigns could cost more than what the firm is making by intake from those services. Maybe a partner spends time chasing leads or managing payroll that limits the revenue that they could be bringing in with their billable hours. That partner could save time by using a more efficient tool, and, even if it costs money to use, could actually be saving money by freeing up their time to handle cases.
Data could explain how much money and time is being sunk into these tasks that firms may not realize are actually costing them money. This would allow you to readily access the analysis of how well your firm is using its resources.
More Accurate Predictions
Law firms provide unique services in relation to other markets. Lawyers rarely know, down to a statistical level, how likely cases are to play out one way or another. A layer’s experience and personal analysis already serve as data that informs decisions. However, when clients bring potentially life-changing issues to a lawyer, it is easy to see why they are afraid to move forward. Additionally, if a potential client is shopping for a lawyer, they may take the case to more than one firm to make their decision. It would stand to reason that the client would move forward with the firm that is able to calculate an exact higher-percentage of success, rather than the one that thinks it has “a good chance” of being a winner.
This ability shows that you take the time to consider their particular facts and apply your previous success in similar cases. Clients will feel far more confident in a firm that calculates their confidence instead of just making an educated guess. For a lot of clients, they are bringing life-changing problems to lawyers. When you consider that, it is easy to see why they would prefer to see a firm put in the effort to calculate probabilities.
Potential to Unbundle Services
Not all clients need or require a lawyer to handle their entire case. Some clients simply cannot afford a lawyer. So what if you could offer some services at a low flat rate? This has been a trend in law since the introduction of LegalZoom and other platforms that offer assistance with certain documents. However, law firms in many states would be capable of offering these “unbundled” services with a more personal touch as well.
As some states move towards allowing lawyers to assist pro se litigants, unbundled services could become the basis for several firms. With data analytics, firms could calculate flat rate services. These services could satisfy the client’s need for value and the firm’s need for profit. The system would be able to track how much time it takes to draft certain documents. The firm could then determine precisely how much each document would cost to draft.
Law firms need to focus on improving their operations. To do that, they need to understand their current operations. by leveraging their data, firms can increase efficiency and lower costs. They could even offer affordable flat-rate services. In order to reach more clients and improve existing client relationships, data should serve as an important tool for any law firm.