Too often critical information produced by modern law departments lives in disparate systems and varying formats. The decentralization of data makes responding to questions from general counsels (GCs) frustrating for attorneys and legal operations professionals alike. This leads to instances where different individuals or teams may end up with completely different data – a side effect of data being siloed and stored in spreadsheets with no shared ownership. Answers to basic questions – like the number of hours spent on a matter or how a much is being spent on outside counsel – can end up requiring a significant amount of valuable time. Furthermore, when data is not stored appropriately (i.e., in a way that is easy to access), organizations risk falling out of regulatory compliance and are more susceptible to data breaches.
Investing in software to centralize information can help law departments not only reduce costs, but also quickly and accurately respond to questions about the strategy and operations of the department. These benefits support a trend towards more law departments strategically investing in legal analytics technology. According to HBR Consulting’s 2017 Law Department Survey of 300 U.S. and global law departments, 46 percent of participating organizations already have a legal spend analytics solution in place, with another 24 percent planning to adopt the technology in the next two years.
The top three benefits to data centralization that we have identified include:
1. Greater predictability
Centralized data is more quickly viewed and managed, which vastly improves law departments’ ability to forecast resource needs. By harnessing historical data, they can also more accurately predict and make smarter decisions about when a matter should be settled, internal staffing should be adjusted or what budgets should look like in following quarters.
2. Time savings and improved efficiency
On the other end of the spectrum, corporate executives frequently come to law department leaders with pressing needs. These inquiries are often predictable as most companies request the same information each quarter when it comes time for reporting. However, unexpected requests always come up, like questions around why a particular matter has exceeded the budget. Having the right data in a centralized location will improve responsiveness while freeing up time to focus on strategic tasks.
3. Reduced risk
Much focus and attention has recently been paid to “preferred provider” programs. These programs are ideal for law departments that work with many law firms, since managing and tracking these relationships can create risk. When correctly configured and deployed, analytics dashboards can allow law departments to monitor all ongoing relationships and push the organization toward trusted providers. Without proper controls, law departments are as susceptible to risk as their weakest provider. By consolidating and standardizing data, organizations will also have a far easier time staying compliant, especially with new regulations on the horizon.
Data changes by the minute. Law departments need to keep pace. With the right data and operational insights, organizations can become more proactive, productive and primed against minor hiccups and major risks. Bottom line: Making the investment in data centralization today is sure to pay dividends in the future.
Scott Springer serves as a senior director and leads the Software Solutions practice for HBR Consulting.