How data is disrupting the legal industry – find out more with CTS
CTS were joined by five legal tech experts from various technology providers who were brought together in a roundtable discussion, moderated by Andrew Lewis, Head of New Business at CTS. The objective was to delve into the significance of legal analytics in the legal sector and how law firms are utilising it to tackle sector-specific obstacles and gain a competitive edge.
These conversations focussed on the topics of data and legal analytics, client service and satisfaction, technology innovation and emerging technology trends, and much more.
The discussion kicks off by drawing attention to the concerns that many law firms have regarding making the most of their data in 2023, and the panellists are asked: how can law firms enhance their practice and achieve growth with the help of legal analytics?
Unlocking data optimisation
Andrew Lewis begins by sharing insight into his recent discussions with numerous law firm leaders over the past several weeks, who all agreed that one of the biggest challenges they find themselves facing this year, is how they can optimise their existing data to gain market insights, boost efficiency and increase profitability.
Legal analytics can be used for decision makers to gain intelligence on clients, user efficiency, and more. With that in mind, Andrew Lewis asks the attendees for their perceptions of how law firms are leveraging their data and information to address legal sector challenges.
The group agrees that law firms are still quite nascent when it comes to the benefits of having data that other sectors could only dream of having but they still have a long way to go in fully understanding and unlocking the power their data holds.
This sentiment is also held by Andrew Try, who compares data to crude oil. Data must be refined to make sense out of it before it can be transformed into actionable insights – it must be supported by context and intelligence, and only then can law firms use it to their advantage.
Graham Moore, Managing Director at Katchr, points towards what he has seen in the legal industry as of late, as a provider of Business Intelligence (BI) solutions. He has witnessed a gradual progression beyond simply tracking and analysing time and billing data, with many firms now striving to identify invaluable insights in other data categories. One process Graham is seeing more of is a deeper analysis of financial measures, including work type, client type and business source, to gain more insight into where business is being driven from, and to uncover vital information on how to generate further business and make operational improvements.
With cybersecurity still at the forefront of everybody’s minds, leading law firms are now integrating their data into their risk management practices, using their data to identify potential risks, such as financial risks regarding where money is being held and for how long, as well as in anti-money laundering checks. Graham believes that data holds the answers to many questions surrounding business areas that may pose risks, exactly how these areas pose risks, and what processes must be followed to mitigate these risks.
Barriers to becoming data-driven
Andrew Lewis asks the panel what the barriers are for law firms adopting new, data-driven methods, noting the precept of the legal sector being typically averse to change.
Around five years ago, law firms were gradually being exposed to technologies that they realised could be extremely useful to them, but they were still viewing digital transformation as a lower priority than other things, says Agilico’s Ivan Packer. However, even the legal sector was unable to resist the enormous changes to working practices that came in with the pandemic.
The pandemic has changed the mindset of law firms, echoes Rob Lawson, but the traditional barriers associated with the legal sector are still there. COVID-19 has undeniably accelerated the development and use of technology, as well as the importance of technology, forcing law firms to transform their digital practices to keep themselves afloat during a time of great unpredictability. Despite this shift, all attendees agree that there is still a degree of hesitation, particularly amongst senior partners and management, who can be somewhat “stuck in their ways”. This reluctance to change may stem from an unease with technology, a desire to continue with technology and processes that are familiar to them, or the lingering concern about data risk, and how technology may pose more of a risk than sticking with manual processes that have less of a chance of going wrong.
Graham delves deeper and circles back to Andrew Try’s comment regarding the refinement of data, by suggesting that lawyers often do not want to deal with data as they don’t feel as though it is in their remit. Lawyers want to practice law, not trawl through extensive spreadsheets of data, and feel put out, almost, by having to do so. A lot of this discontentment comes down to how data is presented. Law firm leaders needs to be presented with data that has been carefully refined, and then presented in an accessible and consumable format. Unless you get that presentation right, unless you give them the opportunity to actually draw insights and not just present them with a whole bunch of numbers, you’re never really going to get the value out of that data, Graham concludes.
Data’s hidden insights
When it comes to dealing with data, law firm leaders need to have a firm understanding of what data they have, what they are trying to achieve, what insights would be useful to them, and how their data can be organised and used to their advantage. Andrew Lewis poses the question to attendees: are there available data sources you believe are underutilized by firms that could provide hidden insights?
The delegates all believe that there is a lot of hidden value in raw data, but it is rarely uncovered due to this data not being presented appropriately. At first glance, raw data doesn’t offer anybody but data experts many insights due to the sheer volume and complexity of consolidated data. There are many legal technologies and tools available that can enable legal practices to take their data to the next level by bringing key performance indicators, metrics, analytics, and peer-to-peer benchmarking data together in an aggregated and visual format. There is no denying that actionable insights jump off the screen when data is effectively presented visually.
Andrew Try believes that specialist managed service providers can also be a great asset to law firms who wish to get more from their data, as they act as a fresh set of eyes and have unique capabilities that enable them to fish out valuable information in a sea of statistics.
For example, specialist switchboard and business support service providers can highlight extremely valuable information regarding how many calls have been taken per month, how many transactional queries were received and how many were strong qualified leads. This kind of insight would provide law firms they need to set up strong lead generation processes, and ultimately, bring in more business and drive profits.
Over the past few years, the legal sector has placed a lot of focus on client-facing technologies that will enable them to simplify collaboration, offer an enhanced service and improve the client experience.
Client satisfaction metrics
What Andrew Lewis wants to know from the panel is what metrics law firms should focus on when looking to uncover valuable insights about client satisfaction and operational performance.
Referrals are every law firm’s friend. Not only are one of the most effective methods of lead generation, but they can be treated as a key indicator of client satisfaction. If a client refers you to somebody else, you can presume that this is because they are pleased with the service that they received, says Rob, so capturing this referral data within your Customer Relationship Management (CRM) tools is extremely useful to understanding which clients have referred you, the specific service they received, who they have referred you to, and the reasons why.
One way that law firms can uncover insights about their performance is by leveraging the data stored within practice and case management systems, which can provide invaluable information about their operational efficiency. Rob suggests that law firms should regularly review the number of cases that are moving through the firm, how long each case took to complete, and if there has been any feedback provided for these cases. Unearthing this information will not only highlight areas of efficiency but will expose any bottlenecks or issues within the provided services, which can then be worked upon as the firm moves forward.
The panel believes that social media and online tools such as Google Reviews can house very useful insights that many law firms may overlook when it comes to receiving and reviewing client feedback. Feedback is essential in helping you to assess what’s working and what’s not, so that you can take actions to improve end-to-end client service.
Before bringing the panel discussion to a close, Andrew Lewis turns the conversation towards technology by citing the 2022 Briefing Frontiers report, which showed that large law firms are most concerned about competition from firms with more tech[1]driven business models.
Tech-driven advantages
The delegates are asked to share their perceptions around what tech-focussed law firms are doing differently, and how other firms can learn from them?
Smaller, tech-driven start-up firms have a blank slate to build upon, Ivan states. They have no historical systems, no technology debt – they have a huge advantage in getting off the ground, having the ability to choose the right technology that works best for them, to explore newer types of technology without having to worry about existing contracts, vendor lock-in or migration plans.
On the other hand, older firms who already have a stake in technology are slightly more demanding in that they know and like what they are used to and are therefore hesitant about trying new things.
Andrew Try agrees that start-up firms have great advantage in terms of tech, but also people. From the very beginning, they home in on getting the tech right, attracting talent and as a result, they grow. However, he then voices his concerns regarding this growth, as they can easily become too busy and too overwhelmed, and all their focus on tech goes out the window because they are now concentrating on their growth and development. Having a strong, long-term strategy in place can really help and this is when outsourcing to a managed service provider can come in handy, as they can take on the “grunt work” so the firm can concentrate on more value-adding projects, with peace of mind that their tech landscape is still being looked after, nurtured and developed.
Considering talent recruitment, Rob believes that techdriven firms are using their focus on technology as a unique selling point, aiding in their recruitment processes as this enables them to attract likeminded, tech-savvy individuals into the company. Being made up of a workforce that understands the value of tech and has a desire to innovate to become more productive and time efficient, means that these end-users have more of a say in the work they want to do, how they do it, and the technologies that are adopted to support their way of working.
Ivan refers to the fact that the pandemic has accelerated the adoption of technology, but notes that now law firms face the challenge of finding the right tools to suit both their business operations and their users. He says that technology deployment alone does not guarantee a return on investment or user adoption, and to remedy this, law firms must take a user-centric approach, echoing Rob’s point.
Begin by speaking to your end-users: identify their particular needs, identifiy tech champions who are familiar with the tech who will support other users, and gain regular feedback from users about the technology they are using and how it is working for them.
The ChatGPT phenomenon
Of course, the panel could not end without the mention of the topic that is on everybody’s lips – ChatGPT. Artificial intelligence (AI) is not a new thing and has been a hot topic for some time now but its recognition and popularity has surged in 2023 with the introduction of ChatGPT.
For those who don’t yet know, ChatGPT is a natural language processing tool driven by AI technology that allows you to have human-like conversations and much more with a chatbot. The language model can answer questions, as well as assist you with tasks such as writing emails, essays, and even code. Chairperson, Andrew Lewis, wondered if law firms are now realising the benefits of AI, and if there’s any room for ChatGPT in their technology toolset.
All delegates expressed how extraordinary it is to see how ChatGPT has opened the public’s eyes to the power of AI. Many law firms are already using Artificial Intelligence as a quick, inexpensive option for collating information, creating visual graphics or fact-finding purposes – things that you otherwise would have had to spend copious amounts of time doing for yourself, or would have paid somebody else to do for you, comments Andrew Try. However, he thinks that it is still going to take some time to see how this new sort of AI – such as ChatGPT – develops for law firms to really understand how they can leverage it and make it work for them.
Eager to test out ChatGPT’s capabilities first-hand, Graham asked it to create a software license agreement for a SaaS software company under UK law, simply to see what it could do regarding such a niche topic, and what it came back with, he says, was incredible but would still need to be run past lawyers before use! Due to ChatGPT’s strong capabilities, Graham can envision it having some sort of drafting or knowledge sourcing tool potential in the future, which could cause some serious disruption in the existing precedents model, if not even fully replacing it.
Additionally, there could also be a big disruption to law firms’ invoicing models because language processing AI could whittle an hour’s worth of work down to 30 seconds, which isn’t going to enthuse fee earners who bill by the hour.
Utilising data and new technologies to drive growth
To close the session, Andrew Lewis turned the conversation towards where firms should focus their attention when it comes to utilising data and new technologies to drive growth and innovation.
Continuing on from the ChatGPT topic, Ivan recalls the discussions he has had with numerous law firms who have seen the power and the potential that Artificial Intelligence holds and have been keen to explore exactly how this tech works so that they can leverage it and make it work for them. There is a real challenge with the efficiency of billing processes, for example. Before a bill gets to a client, it must go through three or four people before it can finally be sent. Law firms are considering how they can use artificial intelligence to solve this problem, among others.
However, there is still a trust issue between people and artificial intelligence tools, Andrew Try believes. As a prime target for cyberattacks, the legal sector is very wary of where they input their information, and who has access to it, so while AI offers endless possibilities, there is still a hesitation around whether or not it is fully safe for use. This concern holds true for other technologies of which law firm leaders are unsure of the cybersecurity factor and are therefore, holding at arm’s length.
Briefing Frontiers 2023 showed that out of all surveyed technologies that aren’t being used to their full functional potential, Client Relationship Management (CRM) came out on top as the highest-scoring area for opportunity, a sentiment that is also kept by Rob Lawson. All the information and data that law firms hold on clients and potential opportunities must be collated and leveraged. Tracking and analysing interactions with your client and target base will undoubtedly help law firms to streamline processes, nurture strong relationships with clients and build new relationships with targets, meaning more sales, increased profits and improved customer service.
