There's no need for large data sets to make analytics work for you
Sophisticated technology tools such as machine learning or block chain are no longer the preserve of City firms, says Robert Camp, as he shares the journey on which his own firm has embarked to embrace data analytics
It has been a while since I managed to go to a conference or event without some mention of ‘big data’. Around three years ago I started looking into data analytics in earnest.
I knew we held a lot of data and that there was the prospect of adding value to our business and gaining a competitive advantage by analysing it effectively, but I was struggling to know where to start.
Our board meetings are often spent looking outside the legal sector to get ideas, so when one of our then non-executive directors mentioned how his own firm Ecovis had used data analytics I was immediately interested.
We started speaking to Reuben Barry, data analytics director at Ecovis about what the options could be for us. Speaking to a data scientist like Reuben really opened my eyes.
As lawyers we think about our data in a very superficial way, but a data scientist sees it as dots and dashes. A data scientist is not interested in the headline data, but instead what the numbers below can show.
Where to start
Mid-tier law firms are not short of data: from time recording to client information. However, the major stumbling block we all face – and I include myself in this – is knowing where to start.
Reuben’s advice was to take small steps and not dive in with a massive data analytics project straight away.
His view is that it is possible to analyse your data in a bite-sized way to drive results and, importantly, to deliver value to the firm.
He recommends starting with a question or a problem and only after being clear on that, taking time to consider how your data could help to inform your decision-making process.
We took this approach and the first question we asked ourselves was: where does our most valuable work come from?
To answer this, the first project that Reuben delivered for us was a geographic analysis of our client matters. He prepared a heat map, which we could use to drill down to parish council level.
We were able to slice and dice the data in a number of ways; looking at it from an individual, team, office or county perspective. This was helpful to us in two main ways.
First, it allowed us to have much more informed discussions about our marketing, looking at where our most profitable work was coming from and making investment decisions accordingly.
Another quick win was spotting anomalies that we would not otherwise have had visibility of. The one that sticks in my mind was seeing work coming from all over the country for a particular partner.
When we looked closer we saw that the work was a very niche specialism, and not his main area of work.
We could see that he was charging a low rate for this work, but our use of the data meant that he was able to charge more, safe in the knowledge that his expertise was in demand from across the country.
Collect and analyse
It would be impossible to run a firm of our size without having several data management systems in place. So you will find that you are already collecting a lot of the data you will need.
However, when I first started talking seriously about using data analytics, several colleagues responded with a concern that our data was not good enough. When I spoke to Ecovis about the projects we wanted to use the data to inform – mainly identifying trends – it was clear that the data did not need to be 100 per cent perfect.
“Don’t make concerns about your data a barrier,” Reuben said. “Once you are clear on the question you want to ask, you may find that the data you hold is good enough. Sometimes it may be necessary to tidy up the data first or use external data to supplement it, but not always.”
Then, when it came to analysing the data, it was crucial that the reports extracted from our data were easy to use and understand.
I was particularly impressed with the data heat maps, which we could drill down into and look at in different ways.
There are several ways to analyse and present the data. Once the question or problem is agreed, the analysis approach can be designed around that.
It might mean the production of a heat map, a real-time dash board or a predictive model.
Our analysis was based on our own data sources about our clients, overlaid with an external dataset from the Office for National Statistics for the geographical analysis.
This is what enabled us to drill down to parish council level. Our use of data analytics to date has been fairly straightforward, but machine learning and AI open scope to do more.
Programming languages like Python can be used to train a predictive model. Applications include predicting and categorising new dispute cases, but it doesn’t have to be as advanced as that. For some questions Microsoft Excel may be the right tool for the job.
Formulating a plan
Data analytics has been particularly helpful in assisting me to make management decisions and plan for change.
Our second foray into data analytics was to look into the issue of our partners holding on to work and not delegating it effectively.
I had a hunch that this was the case, but I wanted to have the hard data before I made a plan and took action. The report that came back did indeed confirm my suspicions.
Having the data, which was prepared by a data scientist with no agenda or allegiances, allowed me to have much more effective conversations about the issue with our partners.
A lawyer’s natural instinct is to argue and challenge, but when I was armed with data that could not be refuted, we could get straight on to a discussion about the issue, the reasons it was happening and formulate a plan to improve.
The ability for raw data to help inform decisions in a non-emotional way was also useful in a relocation project. We have two offices in Cornwall: Truro and St Austell.
The offices are just 14 miles apart and historically several of our legal teams have been split across both offices. Our firm is growing and last year we secured additional space in our Truro office.
For the first time, our additional office space gave us the opportunity to bring teams together in one location.
We used our data to provide another heat map to illustrate where the work of our Cornish teams was coming from. It showed that 80 per cent of the St Austell real estate team’s work was coming from more than 15 miles away.
This meant that a move to Truro would be unlikely to affect client service and in some cases would bring the team closer to their key clients.
Being able to show clearly through the data that the relocation would not be detrimental to client service was really helpful during conversations with colleagues affected by the relocation.
Review and improve
Our data reports have helped us to have open and honest conversations internally. It has enabled us to move a conversation on from a debate about whether there is an issue, to acceptance and a positive discussion about how to tackle it.
Reviewing the outcomes is hugely important. You may use your data to ask: does this outcome challenge my assumptions or support them.
A key question however, is how to resource your data analytics projects. You may decide it is enough to tap into the existing skill-sets of your teams – for example the data querying skills of your IT department.
For us the solution was to use external specialists and now we are training up someone to work in house. We have taken on a level 4 data analyst apprentice. He is working on half a dozen major projects, with support from Ecovis.
To us, this has shown that it is possible for medium-sized law firms to harness data and find innovative ways to use it to help inform business decisions.
This is just the start of our use of data analytics. I can see scope for it to help us become more efficient in many other ways, giving us more information about where our revenues are coming from, which will allow us to make investment decisions.
Law firms hold a lot of data and analysing it effectively has the potential to create a commercial advantage in a very competitive market place.
My message for other leadership teams struggling with this is: go for it and do what you can with the data you already have.
You might just find that data analytics opens up the information you need to help you make the key management decisions your firm needs you to make.
Robert Camp is managing partner at Stephens Scown LLP stephens-scown.co.uk
