How to assess a data analytics product for your law firm: a comprehensive guide

However, selecting the right analytics product is crucial to unlocking these benefits. The wrong choice can lead to inefficiencies and missed opportunities, while the right solution can provide actionable insights that drive your firm's success. This article explores how law firms can assess data analytics products effectively to ensure they choose a tool that aligns with their unique needs, improves forecasting, and ultimately supports revenue growth.

The challenge of trying and choosing a data analytics product

Choosing a data analytics product for a law firm isn’t as simple as signing up for a free trial. Unlike other software, an analytics platform must connect to a firm’s Practice Management System (PMS) to access data. This requires a certain level of technical implementation, meaning that even a trial period may involve setup time and resources. Because of this complexity, it’s crucial to evaluate the product in detail before making a commitment.

While the stakes for trying out a data analytics product may seem high, the risk is relatively low. If a solution doesn’t meet expectations, it can always be replaced with another tool in due course. However, to save time and resources, a thorough upfront assessment can help ensure that the first choice is the right one. Below, we outline the key areas of focus for assessing a data analytics product for your law firm.

How to assess functionalities

When evaluating the functionalities of a data analytics product, consider what value it brings to your firm. Look into the tool’s approach to identifying key data signals, its use of machine learning, and any foundational rules that govern its operation. Here are some specific questions to ask:

1. What signals does the platform detect?
   • Data analytics platforms can process vast amounts of information, detecting subtle trends or anomalies in performance, billing practices, and workflow efficiency. It’s essential to understand what signals the platform captures, especially those relevant to law firm KPIs like realisation and lockup. Ask the vendor for examples of insights the platform has generated for similar firms or situations.
2. How does the platform use machine learning?
   • Machine learning (ML) is a critical component of predictive analytics. By analysing past data patterns, ML algorithms can forecast future performance, flagging potential issues before they arise. Ask the vendor how their platform’s machine learning capabilities enhance the analysis, such as by predicting matter profitability or identifying factors that lead to delayed bill realisation.
3. What are its ground rules?
   • Every data analytics platform operates on certain principles and assumptions. For instance, some may prioritise revenue generation, while others focus on cost control. Understanding these ground rules will help ensure the tool’s objectives align with your firm’s goals. Additionally, check if the platform allows customisation so that your firm can adapt the analytics to reflect unique requirements.

Assessing feasibility for lawyer users

While data analytics tools are typically evaluated by finance teams, they will ultimately need buy-in from the lawyers who interact with the platform. Law firms can achieve this by involving influential lawyers in the assessment process, ensuring the solution aligns with their day-to-day work needs. To assess feasibility with lawyer users, consider the following:

1. Is the product easy to use?
   • For lawyers to adopt a data analytics product, it must be intuitive and user-friendly. Lawyers are often focused on client work, so the product must present data in a way that requires minimal time and effort to interpret. Evaluate the interface and usability by conducting live demonstrations and soliciting feedback from lawyers who will use it.
2. Does it digitise the ‘hassle’ elements of the lawyer’s job?
   • A strong analytics product should automate or simplify routine yet essential tasks. For example, if it can streamline billing processes, manage client communications, or track matter progress, it will become a valuable tool for lawyers. Look for a solution that digitises these “hassle” elements so that lawyers can focus on high-value work.
3. Does it alert lawyers of important matter developments?
   • The best analytics tools provide timely alerts about crucial matter developments, such as potential realisation issues or prolonged lockup periods. Ask whether the product can notify lawyers of these data-driven insights, helping them respond quickly to potential issues before they affect client satisfaction or revenue.

Evaluating roi potential

A significant part of assessing a data analytics product is determining its potential return on investment (ROI). A good tool should contribute not only to cost savings but also to revenue generation and business growth. Here are questions to guide your ROI assessment:

1. Does it have a believable ROI calculation framework?
   • The vendor should provide an ROI calculation framework that’s both realistic and relevant to law firms. This framework should include not only cost reductions but also metrics like revenue gains from improved realisation rates or decreased lockup times.
2. Does the vendor provide real-world numbers?
   • A trustworthy vendor will share case studies or data points from similar clients who have seen ROI from using their tool. These numbers offer reassurance that the platform can deliver measurable benefits for your firm.
3. Does it go beyond cutting costs?
   • Many analytics products focus on cost reduction. While this is essential, the best solutions also aim to improve revenue generation. For instance, the tool might help lawyers maximise billing opportunities, improve realisation rates, or identify new client opportunities. Ensure the product’s ROI promise goes beyond cutting costs to also drive revenue growth.

Ensuring robust security

Data security is paramount, especially in a legal environment where client information is highly sensitive. To assess the security of a data analytics product, review the following aspects:

1. What controls does the vendor have in place?
   • The vendor should provide transparency regarding their security measures, including data encryption, user access controls, and data handling policies. Ask for documentation on these controls and verify that they meet your firm’s data security standards.
2. Is there external validation of security standards?
   • The most credible vendors have their security practices validated by third parties, such as through ISO 27001 certification. Such external validation provides assurance that the platform meets rigorous security standards, reducing your firm’s risk exposure.
3. Does the platform support SSO and role-based permissions?
   • Single sign-on (SSO) and role-based permissions help manage access to sensitive data within the platform. Ensure the analytics tool supports these features to allow lawyers and finance teams access to data on a need-to-know basis, improving both security and ease of use.

Conclusion

Choosing a data analytics product for your law firm can be transformative, allowing you to improve KPIs, enhance forecasting, and gain a granular understanding of performance across matters. While it may require an initial investment of time and resources, a careful assessment of the platform’s functionalities, lawyer usability, ROI potential, and security measures can help ensure you select the right solution. By following the steps outlined in this guide, your firm can find a data analytics tool that doesn’t just analyse data but actively drives better decision-making and supports long-term success.

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