Cultivating deeper data reporting

Many industry figures have observed that the pandemic’s most significant impact on law firms has been a greater acceptance of new technologies and ways of working.

However, all the firms Iron Carrot has worked with recently have been looking specifically to innovate their data strategies and leverage technology that goes beyond financial reporting. They’re seeking to generate deeper insights into how their firm operates by using business intelligence (BI) to help make decisions based on past data, and using data analytics to develop future predictions and trends.

A common first step on that journey is the implementation of dashboards that show combined data – however, the creation and publication of such dashboards is where the common challenges to useable business intelligence become most pronounced if not addressed.

Analysing the data myths

Key stakeholders often believe two common myths in relation to business intelligence and analytics implementations. The first is that business intelligence is sufficient to provide better quality data and more accurate reporting and analysis. The second is that everyone in the firm understands 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 good quality data. A lack of data maturity can mean the quality of data is low, or the correct information is unavailable outside of the team that maintains it – potentially leading to other teams creating and managing their own versions of the same data.

Data is only as valuable as someone’s ability to understand it correctly. People who work with data, reporting and analytics as a day job often underestimate the knowledge and skills they have and assume everyone has that same level of understanding

What’s more, in recent years, the focus for law firms has been on achieving operational when it comes to managing data around transactional processes. Most law firms review each business service in turn, and any documented processes start and stop at the function’s borders. But data doesn’t sit neatly in functional groupings – many of a firm’s systems and processes utilise, for example, employee or client names. It’s not always clear which one is the authoritative source (i.e., best quality and most current) for business intelligence purposes.

This focus on managing data in functional silos has the unintended consequence of minimising communication between teams. The lack of transparency means no one understands the decision-making process behind operational data management decisions, even for data they think they know. Without transparency, there’s no mechanism for people to contribute to or collaborate on a challenging decision.

A data literate culture makes a difference

In addition, data is only as valuable as someone’s ability to understand it correctly. People who work with data, reporting and analytics as a day job often underestimate the knowledge and skills they have and assume everyone has that same level of understanding. Since many users are hesitant to admit they don’t understand (or know what to do with) the dashboard they’re looking at, the lack of an accompanying training program will see lower levels of engagement.

Though decision-making is increasingly changing to be more data-driven, rather than experiential (gut-feel), it won’t really happen without a culture change led from the top. People who aren’t used to this new way of working will default to doing what they have always done without the proper training, support and leadership.

Data interpretation and understanding is in the eye of the reader. For a firm to have a common understanding of concepts like ‘client’ and ‘headcount’, their shared meanings have to be widely communicated. Everyone needs to be encouraged to ask questions about data interpretation to improve data clarity over time.

Data governance solutions

A primary goal of data governance is to help firms find the right balance between their responsibilities around data management and the opportunities to use data in support of their business strategy. We like to define data governance as the framework that enables conversations between the right people to improve the firm’s strategic data management.

Many firms will struggle with a lack of data maturity and attempts to align their strategic goals with the siloed reality of their data landscape. Data governance can help to end this siloed approach by bringing together the leadership of the data-creating and data-using teams to create a shared vision

By design, that means changing the historical law firm approach of managing data in business services or legal practice silos. Instead, data governance aims to manage critical data assets cross-functionally for the benefit of all. More heavily regulated sectors like health and banking adopted data governance to support them well over a decade ago, and it’s becoming increasingly common to see law firms adopt data governance in parallel to establishing or improving business intelligence and data analytics.

Many firms are developing data governance frameworks to help people work collaboratively and improve cross-functional communication and transparency. This provides a focus and structure for data decision-making, as well as a network of data owners and documentation for the data governance centre of excellence to leverage.

As a result of misconceptions, many firms will struggle with a lack of data maturity and attempts to align their strategic goals with the siloed reality of their data landscape. Data governance can help to end this siloed approach by bringing together the leadership of the data-creating and data-using teams to create a shared vision for the firm’s data that works across functions.

To find out more, visit: ironcarrot.com