From business Intelligence to business wisdom
Using business intelligence to grow your firm is a process that shouldn’t exclude the value of human knowledge and behaviours, says Sean Stuttaford, chief operations officer at Thompson Smith and Puxon.
Recently, the LPM Tiger Team panel discussed views on effectively utilising the abundance of business intelligence data that a modern law firm generates every day.
For some time Thompson Smith and Puxon has practiced ‘data-driven law’ (DDL). We use data to measure performance, identify emerging trends, rectify problems early and produce real-time, future-looking strategies. It helps with the pre-emptive distribution of resources and provides insights into how our lawyers are utilising their day.
It is all well and good logging this data, but its true value is reliant upon it being available to the lawyers and team leaders in an understandable way. Additionally, self-service is critical if a firm wishes to empower all team members to make good decisions and drive behavioural change.
What you report on will depend on the practice. If it is in a growth phase, realised and utilised rates, and tracking the lag on the lockup and billing cycles will be critical. If it is in a capital-building phase, profitability, performance to target and resource availability may be more important.
How the firm initially delivers this data will probably depend on the current technology. A decade ago, our journey started with nothing more elaborate than an Excel spreadsheet linked to our CMS/ PMS database. For us, using Excel to display billing and cost paid performances, realised and utilised rates, attended time, team profitability data and year-on-year comparisons, all in graphical form only, transformed firm-wide understanding of the workings of a legal practice.
For not much more effort (but more money), development of more interactive solutions with Microsoft PowerBI or one of the other third-party providers of data analytics is within reach of most firms. Whatever your DDL journey, it is critical to measure the impact, positive or negative, of your solution on performances.
I have mentioned half a dozen metrics, and there are so many more to choose from, so it is tempting to provide everything to everyone, but there is a risk they simply cannot see the wood for the trees. Selecting five measures for individuals to aid delivery of strategic objectives is advisable – but they do not have to be the same five for everyone. Everyone must be trained to understand what they are looking at, what behaviours affect those measures and why they are important. In short – keep measures focused.
With the excitement of graphs and performance analytics, there is a risk of losing sight of the decisions needed to drive improvements. Combining tacit knowledge of the firm with data analytics is where business intelligence becomes powerful business wisdom.
Being able to predict future outcomes from decisions made today is hugely beneficial. Applying personal experience, while keeping communication channels open with all levels of an informed and educated workforce, can equip a leader with what, from the outside, can appear to be near fortune-telling abilities.
Key decision makers should not only know what the data says, but also what is happening. Do teams genuinely feel they have enough resources and how might they respond to a given change initiative? This level of understanding will help provide the right indicators to empower teams and to ensure they can see the positive results of their efforts.
If a leader knows the culture of the firm, what teams or individuals are motivated by, who holds influence and how they will respond to change, while combining this knowledge effectively with business intelligence data, they will be viewed as very wise indeed.
