Developing your data strategy might not be on your priority list right now, but converting your organization to be a data-driven business could be just the transformation you need to bounce back.
Hindsight, as they say, is 2020; and we are already finding that this year has proved illuminating for many organizations who, under mounting contractual questions from clients and pressure on their bottom line, have realized how valuable an asset a data strategy could be for their business.
But data isn’t just about answering your contractual questions quickly and accurately, although this too is an important outcome. It’s about answering business questions, managing risk better, and finding the hidden opportunities inside your contracts that drive value, cost savings, and revenue to the bottom line.
According to The McKinsey Global Institute, data-driven organizations are 23 times more likely to acquire customers, six times as likely to retain those customers, and 19 times as likely to be profitable as a result. These findings are reinforced by The BARC Leadership Survey from 201, which states that a good data strategy delivers an average of 8% increase in profit and 10% reduction in cost on a baseline.
But, according to Harvard Business Review, data strategies across the world are chaotic at best, and non-existent at worst. It states that less than half of an organization’s structured data is actively used in making decisions and less than 1% of its unstructured data is analyzed or used at all.
While there are myriad reasons for this in the legal sector; one of the biggest is the paralysis around getting the data strategy right in the first place. There is a raft of methodologies available that can help. Most discuss a data strategy in terms of five stages with identification of the data as the start; storage is the second phase; provisioning of the information is third; then the processing, and then the ability to govern and manage that information.
But this method doesn’t necessarily fit into the mold of the legal data world. The reason that we believe financial, medical, and personal information is so much more advanced in data strategy is because of the challenging five Cs, with which the legal team must contend:
Culture: The belief that lawyers deliver exceptionally little, therefore the information is unique to the legal industry and cannot be understood or shared with those outside the fraternity.
Colleagues: There’s a growing gap between the data-intensive divisions such as finance, IT, and procurement and the legal team who are inundated with information but don’t convert that into a data strategy.
Coin: There’s fundamentally a lower investment in data compared to that of financial services providers, so the legal industry and in-house legal always seem to be a step behind.
Conflict: The challenge between protecting information and exploiting information, is a conflict the legal industry understands and something unique to us and our challenges. This can have a drag effect on the implementation of a more expansive or sophisticated data management strategy.
Competition: Data allows clients to differentiate between law firms, and even in-house legal teams based on quality, speed, and ease of legal services, which makes many in the legal profession uncomfortable.
But if the existing data strategy methodologies are not molded to the legal sector, how can law firms and in-house legal teams develop their own, more applicable data strategies?
We believe there is an alternative method that has already proved highly effective with our clients.
Our process is underpinned by the understanding that nobody owns the data. To succeed, every data strategy must have cross-departmental collaboration at its heart; turning data into information cannot be achieved in silos.
Our six-stage process for your data strategy is:
- Start with the business question that needs an answer and contextualize that question. Starting with the commercial question can be more challenging than the following steps. You need to consider not just what is the problem you are trying to solve, but put that question into context within your business. How does the problem or the business question we need answering fit into our corporate strategy or our roadmap?
- Identify which data sources can answer that business question. This is why sharing data must underpin every data strategy – your data sources will be across procurement, finance, sales, and legal combined.
- Hire or train the data experts: Having the right people on board is vital, but not easy. According to McKinsey: “Another challenge is attracting and retaining the right talent — not only data scientists but business translators who combine data savvy with industry and functional expertise.” These teams or individuals must deliver on managing the data sources to respond to that business challenge or question, so having a third party here can be more appropriate.
- Deploy legal analytical overlay: This analytical overlay must be applied across all the different business verticals. This is not a bolt-on; this is a crucial element in creating your analytics to give you the business outcomes and commercial answers you need.
- Finally, begin your data gathering: Any solution you choose must gather and understand contextually both structured and unstructured data. This is the only way you can ensure that you are getting the complete picture from your data.
This methodology is a roadmap for how to start accessing the data you need to answer your commercial questions. Alongside this six-stage strategy there are several other considerations that we believe must be factored in throughout to ensure the success of your data journey:
Define success: Many legal teams struggle with understanding the success factors of a data strategy and therefore find it difficult to present a business plan to the wider organization. But carefully and critically defining success in terms of the ROI and the commercial impact on your business is crucial. Without defining success and the financial metrics, it’s extremely difficult to find the buy-in that you require from stakeholders, financial backers, and internal champions.
Work with an expert to design and implement a solution: This seems obvious, but there are no out-of-the-box solutions when it comes to a data strategy. Every case study or webinar has nuances as to why it worked for some clients in certain situations and not in others.
Launch a pilot project: This allows you to find those quick early wins and maintain momentum on the strategy. It also demonstrates to stakeholders and the C-suite that there is real impact to be gained from your strategy.
Measure impact and continuously improve your strategy: One of the risks with any data strategy is being so caught up in the process that you forget to continuously measure impact and to improve on your strategy. A failing that is often ascribed to legal data is that it doesn’t take into consideration shifting conditions. We live in a time of immensely shifting conditions and your data project will be at risk if you can’t measure the impact of these changing conditions on your strategy, cost, and timelines.
Senior support: We’ve discussed previously how your culture is crucial to the success of your data strategy. Having C-suite engagement and understanding at the right level is vital, as well as having champions throughout the organization, particularly in IT and procurement, is essential.
Data has become a critical corporate asset. And, given the current climate, inquisitive clients, and pressures on the bottom line, the C-suite is now hungrier than ever to know what their biggest asset is worth.
Data isn’t going away, it’s multiplying year-on-year and the importance of managing your data strategically is central to the success of your organization. Having a robust data strategy in place, infused with analytics, will be the driver of your business growth and ensure that your business evolves, not just survives, in the all-new post-COVID world.
Don’t leave your data strategy to chance; contact us now to find out how you can benefit from our expertise and technology.