Monday, June 05, 2017

Small Decisions Adding Up

As the publisher of Slaw, I get to see a lot of great commentary. I also get to see the statistics behind the website, and I don't mind sharing with you that local colleague Sarah Sutherland of CanLII has a fantastically successful post on her hands!

Her recent piece on Quantifying the Value of Legal Information had as much traffic in its first day as some Slaw posts see over the course of a month. Those are big numbers coming from a website that had 2M+ visits last year.

Sarah's calculation of revenue improvements aside, the premise behind her post is an argument I've been making for years: that small, incremental improvements inside of law firms should be the backbone of law firm administrators.

If you can steer-the-ship to a 1% improvement of efficiency, mid-to-large sized firms can see a serious impact on the firm's profits.  Simply put: Firms make better decisions by having better information in front of them. Some of that information can be external, which is why I liked the case strategy aspect of Loom Analytics; but firms that really know their business model are be able to carve up their internal data collections too.

Good internal information has always been key. Knowing about the firm's settlements in certain areas of practice; or about historical pricing of the firm's services (and its competitors); or as Sarah suggests,
 "things like getting an expert opinion, which is of course what the firm’s clients are already doing, looking at prior history and extrapolating, or conducting research in secondary sources of information and the primary law. This can increase confidence in predicting the outcomes of matters, thereby allowing the firm to make better recommendations. "
Law firms with substantial practice expertise are also in a position to align their accounting data with any of the above factors. This all, of course, is Knowledge Management or "KM".

There will always be individuals inside firms that will question the value of these efforts, but when your job is (as is most firm administrators) to create internal value beyond the artwork on the walls, it's these processes of quantifying the firm's experience that trumps other administrative priorities.

And not just for bigger firms. Small firms (think contingency fees) can profit at an even higher rate when "winning" a decision increases the engagement value.

So is having better legal information valuable? Of course it is.  Sarah Sutherland just happened to put some numbers behind this kind of thinking.

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