Iron Carrot: Why is data governance important for law firms?
Law firms need data governance
Data governance is important for law firms because data is an economic asset that can help firms improve their operations, increase revenue, solidify relationships with clients, produce new revenue streams, improve the quality of current products, establish competitive differentiation, allow innovation, and reduce risks.
Innovative law firms have big goals for improving the client experience through data innovation. The problem is that many law firms struggle with a lack of data maturity and alignment between their strategic objectives and the siloed reality of their data.
Everything happens in silos
No-one trusts the data
In complex organisations, like law firms, technologies, processes, and people depend on each other for success. Most people in the firm will only see data relevant to them, so they need to trust that they are looking at quality data.
A firm’s lack of data maturity means that the quality of the data is low, or the correct information is unavailable outside of the team which maintains it. A lack of access to good data contributes to a lack of trust in all the data that people do get. So they start to create and manage their versions of the same data.
Firm’s manage data for operational not strategic reasons
Operational management means the day-to-day activities required to manage data as part of the firm’s transactional processes. In recent years, the focus for law firms has been on achieving operational efficiency.
Most law firms review each business service in turn (using techniques such as Six-Sigma), and any documented processes start and stop at the function’s borders.
But data doesn’t sit neatly in foundational groupings. Many of the firm’s systems and processes utilise, for example, employee or client names. Strategic management of data focuses on activities necessary to ensure competitive positioning and takes a cross-functional view of data and data management processes.
Lack of communication and transparency of data decisions
The operational focus on managing data in functional silos has the unintended consequence of minimising communication between teams. The lack of transparency means that no one understands the decision-making process behind operational data management decisions, even for data in which they have an interest.
This has a massive impact on culture. Without transparency and communication, there can be no trust.
When leaders create structures that are designed not to communicate, employees mirror this behaviour and withhold what they really feel about the way that data is managed. This leads to a lack of trust in the data and in each other. Without transparency, there is no mechanism for people to contribute to or collaborate on a challenging decision.
Data Governance for law firms
Data Governance by design changes the historical law firm approach of managing data in business services or legal practice silos. Instead, it looks to manage critical data assets cross-functionally for the benefit of all.
Create a unified vision
The siloed approach starts at the top. Bring your leadership together to create a shared vision for what they want the firm’s data to be and do. Encourage them to focus on their data commonalities, not the data outliers, and draw a clear line between the data vision and the firm’s strategic goals.
Build a framework
Develop a framework for supporting and educating people to work collaboratively and improve cross-functional communication and transparency. This framework provides a focus and structure for data decision making and a network for your data governance centre of excellence to leverage.
Work towards common goals
Help the framework groups to collectively and collaboratively deliver the data vision which supports the firm’s strategic goals. When people understand why they’re doing something and the benefit of doing it, they are more likely to participate in the activity and be open to change.
Getting it right
We encountered a difficult example of all these issues when we helped an international law firm develop and implement a data governance roadmap.
Most of the data owners and subject matter experts (data stewards) didn’t know their counterparts in other functions and cross-functional communication on data issues happened via the Technology team.
The largest and most problematic data challenges were historical (5+ years) in nature and actually came from a lack of joined-up data decision making.
The more time the stakeholders spent together workshopping the firm’s data goals and objectives, the more open they were to solving problems together.
Because we took the time to help them understand the vision and gave them the space to share their knowledge and expertise they got to know each other. At the point the new framework was operational, cross-functional communications had already improved – the stakeholders were emailing or calling each other for help.
Expert tip
Build-in plenty of time to help your data stakeholders get to know each other. We focus the first workshop in every workstream on helping the group members get to know each other and start to develop trust in each other. We use the second workshop to explain the task in front of them, the new data vision and the link to the firm’s strategy. Only in the third workshop do we start to work on the activities to get to the desired output.
Summing up and next steps
Final advice
Put the firm’s people first and focus on identifying and formalising the accountabilities and responsibilities that already exist within your Firm. The people in operational data roles have a good understanding of where your firm’s data challenges are. They often have lists of historical problems that never get solved or regular feedback from practice users of systems and reports. Use this knowledge to help guide your vision and set common goals.
How to get help
If you want to learn more about data governance, our road mapping process, or how we can help you, book a call
