telescope

Is there a correlation between per capita cheese consumption and the number of people who died by becoming tangled in their bedsheets? Yes, and Tyler Vigen, a military intelligence analyst and Harvard Law student, created a website and book tackling odd correlations like this. However, is the association meaningful?

Probably not.

Remember: “Correlation does not imply causation.” Or said another way for the Latin-trained legal mind: “cum hoc ergo propter hoc.”

What do cheese and bedsheets have to do with law firms? You can use data to tell a story or be inspired. But within your law firm, identifying meaningful correlations can spur new ideas, influence policy decisions, and guide investment choices. While we should always strive for an ideal “truth” behind the data we present, the concepts that guide becoming a better, more effective organization are not always rooted in quantitative truth, or able to be backed by detailed regression analysis.

Therefore, let this not be a focus on the well-trod concepts of calculating profitability, realization, and the like. We'll instead explore some of the correlations that your data might hold, with loose regard for proving causation in the short term. These correlations have presented themselves in medium and large law firms and are powerful examples of the relationships that may live in your internal and external data. As this is not an academic paper and confidentiality dictates that the source of this information is not shared, consider the following food for thought rather than provable theorems.

Frequency of Time Entry Correlates to Realized Time: Time entry can be an arduous task for billable resources to keep up with. Entering time significantly after the fact, such as at the end of the week or end of the month, is not a habit that law firms encourage. Data shows that the timekeepers whose time entry habits are closest to real-time enjoy greater realization rates. This would seem to suggest that delays in time entry correlate to a smaller percentage of collected fees. This correlation does not provide for other habits and external factors but contributes to the case for time entry as close to real-time as possible.

Clients Presenting Outside Counsel Guidelines Less Likely to Initiate Claims: Clients who present outside counsel guidelines to their counsel and ultimately agree on those terms may be less likely to bring claims in the future. This correlation enforces the wisdom that documented terms of business are a benefit to all involved, and the careful setting and review of terms can result in an attorney-client relationship less likely to end in dispute.

Profitability Positively Relates to the Size of the Matter Team: Larger matter teams composed of a range of billable resources may prove more profitable than smaller teams. This relationship may point to the fact that larger matters are staffed with larger teams, but another interesting explanation could be that the “diversity” of the team itself contributes to profitability. A single partner working a matter alone may bill at a high hourly rate, but a matter team including paralegals, associates, and other resources can often work more profitably even if the overall billing is not as high as the matter staffed by one or two partners.

Average New Matter Approval Time is Faster for Clients with Engagement Letter on File: File this under the “anyone could have guessed that” category, but data shows a relationship between how quickly a matter can be opened and the existence of an engagement letter on file. The working theory is that when you've taken the time to clearly set out the details of an initial client relationship, starting additional matters is a more fluid process. Many law firms still struggle to get lawyers to formally document the terms of an engagement. The possibility of quicker future onboarding may be another way to convince busy lawyers to take the time for this important step.

An Uptick in News Feed Activity May Correlate to a Need for Legal Services: Sources of data outside of the firm's domain can also provide insight. Firms today are employing business intelligence to monitor case alerts and get a jump on when litigation has been brought against a client. While more prone to false positives, monitoring for the appearance of a client name in public news feeds can also be a mechanism to anticipate client needs before they place a call or email to trusted counsel. The uptick in “mentions” in the media can reasonably be related to the need for legal representation. When the client anticipates this news it is likely that counsel is already involved. It is the unexpected mentions that a savvy law firm will look to identify before a client knows they need support. Lawyers and business development staff have long used this technique in a manual way, but are increasingly mechanizing the process to analyze public data.

Your data holds many of these types of relationships, some of which may prove to be incidental, and others which will show a stronger causal relationship. Using your varied sources of data as a window into past habits and future possibilities can make your organization more nimble, reduce risk, and help anticipate coming changes. Don't be afraid of exploring these novel relationships as you stumble upon them.

Eric Mosca, CRM, director of operations for InOutsource, has more than 13 years of experience in new business intake and information management consultation. He conducts comprehensive analyses of new business intake, conflicts, and records operations; develops policies and procedures; documents business and technology requirements and system selection; provides software development, implementation and testing; and oversees staffing solutions and vendor relationships.

telescope

Is there a correlation between per capita cheese consumption and the number of people who died by becoming tangled in their bedsheets? Yes, and Tyler Vigen, a military intelligence analyst and Harvard Law student, created a website and book tackling odd correlations like this. However, is the association meaningful?

Probably not.

Remember: “Correlation does not imply causation.” Or said another way for the Latin-trained legal mind: “cum hoc ergo propter hoc.”

What do cheese and bedsheets have to do with law firms? You can use data to tell a story or be inspired. But within your law firm, identifying meaningful correlations can spur new ideas, influence policy decisions, and guide investment choices. While we should always strive for an ideal “truth” behind the data we present, the concepts that guide becoming a better, more effective organization are not always rooted in quantitative truth, or able to be backed by detailed regression analysis.

Therefore, let this not be a focus on the well-trod concepts of calculating profitability, realization, and the like. We'll instead explore some of the correlations that your data might hold, with loose regard for proving causation in the short term. These correlations have presented themselves in medium and large law firms and are powerful examples of the relationships that may live in your internal and external data. As this is not an academic paper and confidentiality dictates that the source of this information is not shared, consider the following food for thought rather than provable theorems.

Frequency of Time Entry Correlates to Realized Time: Time entry can be an arduous task for billable resources to keep up with. Entering time significantly after the fact, such as at the end of the week or end of the month, is not a habit that law firms encourage. Data shows that the timekeepers whose time entry habits are closest to real-time enjoy greater realization rates. This would seem to suggest that delays in time entry correlate to a smaller percentage of collected fees. This correlation does not provide for other habits and external factors but contributes to the case for time entry as close to real-time as possible.

Clients Presenting Outside Counsel Guidelines Less Likely to Initiate Claims: Clients who present outside counsel guidelines to their counsel and ultimately agree on those terms may be less likely to bring claims in the future. This correlation enforces the wisdom that documented terms of business are a benefit to all involved, and the careful setting and review of terms can result in an attorney-client relationship less likely to end in dispute.

Profitability Positively Relates to the Size of the Matter Team: Larger matter teams composed of a range of billable resources may prove more profitable than smaller teams. This relationship may point to the fact that larger matters are staffed with larger teams, but another interesting explanation could be that the “diversity” of the team itself contributes to profitability. A single partner working a matter alone may bill at a high hourly rate, but a matter team including paralegals, associates, and other resources can often work more profitably even if the overall billing is not as high as the matter staffed by one or two partners.

Average New Matter Approval Time is Faster for Clients with Engagement Letter on File: File this under the “anyone could have guessed that” category, but data shows a relationship between how quickly a matter can be opened and the existence of an engagement letter on file. The working theory is that when you've taken the time to clearly set out the details of an initial client relationship, starting additional matters is a more fluid process. Many law firms still struggle to get lawyers to formally document the terms of an engagement. The possibility of quicker future onboarding may be another way to convince busy lawyers to take the time for this important step.

An Uptick in News Feed Activity May Correlate to a Need for Legal Services: Sources of data outside of the firm's domain can also provide insight. Firms today are employing business intelligence to monitor case alerts and get a jump on when litigation has been brought against a client. While more prone to false positives, monitoring for the appearance of a client name in public news feeds can also be a mechanism to anticipate client needs before they place a call or email to trusted counsel. The uptick in “mentions” in the media can reasonably be related to the need for legal representation. When the client anticipates this news it is likely that counsel is already involved. It is the unexpected mentions that a savvy law firm will look to identify before a client knows they need support. Lawyers and business development staff have long used this technique in a manual way, but are increasingly mechanizing the process to analyze public data.

Your data holds many of these types of relationships, some of which may prove to be incidental, and others which will show a stronger causal relationship. Using your varied sources of data as a window into past habits and future possibilities can make your organization more nimble, reduce risk, and help anticipate coming changes. Don't be afraid of exploring these novel relationships as you stumble upon them.

Eric Mosca, CRM, director of operations for InOutsource, has more than 13 years of experience in new business intake and information management consultation. He conducts comprehensive analyses of new business intake, conflicts, and records operations; develops policies and procedures; documents business and technology requirements and system selection; provides software development, implementation and testing; and oversees staffing solutions and vendor relationships.