Legal departments are expected to do more with less and are now charged with better controlling and reducing costs, continuously evaluating and improving processes, and wherever possible, retaining and re-using historical data and knowledge. Cue business intelligence (BI). Sales and marketing organizations have used BI technology and processes for many years to make smart data-driven decisions.

With pressure to run law departments more like other units, legal is starting to adopt BI.

Legal operations is a growing function across enterprise legal departments. According to the Corporate Legal Operations Consortium, “legal operations is a multi-disciplinary function that optimizes legal services delivery to a business or government entity.” By focusing on core principles, including strategic planning, financial management, data analytics and knowledge management, legal departments are adding a layer of business logic to the practice of law to drive peak performance.

In this article, I will address the evolving role of general counsel and the legal operations function, why legal departments have lagged in adopting BI, and what departments can do today to gain real-time insight across their legal operation.

• As expectations evolve, so does the role of general counsel and the legal team.

No longer is it sufficient for law departments to simply oversee litigation and regulatory compliance. General counsel and their teams are increasingly being called upon to provide fact-supported business insight regarding matter management, financial spend and data lifecycle across the department to executives or for board decisions. Today's general counsel often lead corporate and information governance initiatives, and help manage enterprise risk—including IT and cybersecurity.

As in-house legal teams assume greater responsibility and become more accountable, they are seeking efficient and cost-effective ways to improve transparency—including aggregating and analyzing key metrics—to help run their department more like a business. Such insight not only supports core legal department functions, like resource planning and spend analysis for e-discovery, but it also provides macro analytics to support data-driven decisions on how the department should evolve based on past performance.

• Silos are great for storing grain, but not for running your legal department.

Legal departments have historically managed their portfolios in silos. Not only are teams not sharing information across function (for example, litigation versus regulatory), they typically do not even share information within each function. They essentially recreate the wheel for each new matter. Such inefficiencies make day-to-day management unnecessarily challenging, and make analyzing the aggregate almost impossible. Only able to see the trees, legal teams have struggled to make sense of the forest.

E-Discovery provides a great example. Many legal departments still use manual processes for legal holds. Manual hold tracking—often in a spreadsheet—is inefficient and costly, fraught with risk, and it doesn't support macro analytics. Legal teams regularly burden high-value custodians to collect for each new matter, using a variety collections resources. Collected data is then “thrown over the fence” to outside counsel, who have preferred e-discovery tools and vendors, none of whom have any insight into institutional knowledge or prior coding decisions. Multiply this process ten-fold for large organizations, and it's easy to see why legal departments struggle to learn from prior engagements and re-use existing work-product.

• Perform like a well-oiled machine with proper BI tools and strategy.  

Good BI technology and process underlie good BI strategy. Good BI strategy can dramatically improve a law department's day-to-day efficiency, and provides historical knowledge to support continuous evolution.

When evaluating a BI strategy, ask whether it achieves:

1. Optimized Daily Operations: Does it provide visibility into status and progress, allowing us to deliver legal operations on time and within budget? Does it quantify and help efficiently allocate potential resources?
2. Informed Strategic Decisions: Does it integrate prior review metrics, allowing fact-based decisions about collections and providing budgeting insight? Can I assess outside counsel and other vendor value-add and spend—and is such analysis only quantitative (how much did this cost) or is it also qualitative (did we have a good result)?
3. Broad Adoption and Longevity: Does it have the flexibility to accommodate evolving department inputs and requirements? Is It user-friendly, and does it support external reporting, to get information into the hands of critical players who might not proactively engage the system?

A good BI solution should provide insight across an enterprise's custodians, collections, matters, deadlines, resources and resource allocation, historical review metrics, and robust financial reporting across all costs. It should provide key performance indicators, so that at all times legal operations professionals can easily understand their data universe, track the progress of cases, ensure proper resource allocations based on deadlines and other factors, evaluate pricing models, assess legal spend across vendors and firms, and generally use data to inform any number of other strategic decisions.

• Conclusion

General counsel and legal operations professionals increasingly understand that access to meaningful metrics and other business intelligence is a key component to managing spend and risk—and ultimately running the law department more like a business unit. Getting there shouldn't be so difficult. With proper BI strategy, supported by experienced professionals, legal departments can improve daily operations, better align across functions, and continually evolve their organization through data-driven insight.

Eric Willis is vice president, enterprise solutions at Catalyst, where he advises and collaborates with corporate legal departments to design strategies for the data management lifecycle. He may be reached at [email protected].