By Jennifer Roberts & Mark Medice, Intapp
In his August 20, 2011 Wall Street Journal article entitled, Software is Eating the World, Marc Andreesen famously pronounced that software and the corresponding data it processed was rapidly spreading across all industries disrupting businesses, creating quick winners of the innovators, and losers of the incumbents. He cited many industries and businesses as examples, including telecommunications (Skype), movies and entertainment (Netflix), recruiting (LinkedIn), retail (Amazon) and financial services among others.
With all the discussion about innovation and change within the legal industry, does Mr. Andreesen’s premise have application to law firms? Perhaps the answer lies in how law firms use data to serve their clients today and what might be available?
The use of data for client service is not a brand new idea, and today data is requisite towards a client service design strategy. There are many labels for this client-centric thinking, for example “outside in” design. Outside in design implies redesigning services with the client at the center of the universe, anticipating their feelings and steps through their journey of identifying problems and finding their solutions. In other words, design by walking in the client’s shoes. This design method better shines light on client needs that enable a stronger more intimate, trusted client relationship. Common examples include the use of net promoter scores, understanding buying trends to develop product bundles and offer recommendations as well as factoring customer reviews to develop product quality scores..
As pervasive as leveraging data in client service has become across many industries, we are only at the beginning in legal. The space is wide open and with learnings from other industries, it is clear that there are many opportunities. The inquiry must take into account priority and impact. Where can we make the biggest impact for our clients? Questions that may arise in this analysis may include the following:
· Are we trusted preferred provider with this client?
· Are we getting the work that matches our strengths and strategy?
· Do clients like our work?
· How do we know if things are going off track during a matter?
· Are we providing value to the client and how would we know?
· Are the interests of the client and firm aligned?
· Are their signals we should be on the lookout for problems?
· What resources should we bring to bear to develop strong client relationships?
A common approach towards assessing firm standing with clients is through client interviews, undertaken by a number of approaches, such as through third-party consultants, business development professionals, and executive management. Feedback comes in the form of unstructured qualitative data and is typically only done every few years for only a subset of key clients. This is a fantastic means to get in-depth client data that can add a lot of color to varying situations. However, this approach is labor intensive, requires significant follow-up, while invaluable, it doesn’t scale to critical cross-sections of the client portfolio (e.g., key growth clients).
Can Data Help and what is Already Available?
There is a plethora of data already at the firm that can easily be repurposed to help inform the client’s sentiment about the firm. It can be processed to support many critical initiatives that if done well could provide client distinction through the understanding of client sentiment in the data and creating a collaborative intelligence experience management process for business development.
Client Relationship Health Scores and Early Warnings
Think about it, a client doesn’t fire a law firm (or lawyer for that matter) but more commonly, billings decline overtime until they drift away. As the work slowly dwindles, there is a chance that the client may no longer have that work, although it may be something more malignant. Too frequently, the client has lost faith, and may be bringing that work elsewhere. But waiting until work has dwindled is too late. Firms need to review performance measures that may provide a warning about diminishing relationships as to learn and act timely and effectively. Examples of commonly available data that might signal declining health:
- The Number of Services/Practices Engaged. If a client has three or more practices engaged aka “the rule of 3”, there is a higher likelihood the client is happy and even better, is willing to bring in more work. The rule of 3 also brings a stickiness factor with it as it is harder to move work, the more work you have… there is an inherent loyalty.
- Number of Partners Materially Involved. Understanding the partners, practices and offices working with a client can help identify complex connections on the matter and client level where the stickiness factor only increases and highlight those where connections with the firm are weak.
- Declining Realization especially post invoice. A client who is willing to pay less per dollar billed doesn’t see the value of the work being done.
These are just a few examples of spinning existing firm data on its head to benefit the understanding of client relationships and aid in business developments pursuit of client success. Extra flavor is added through voice of the client programs that allow for depth (whereas data analysis gives you breadth). This looks like client interviews, team 360s, after-action reviews and snap shot surveys. While some of these are time intensive, the snapshot survey is one that isn’t so exhaustive, as it can be automated while simultaneously providing structured information that gives depth by only asking one question: would you recommend us to a colleague? One caution however. The simplicity and brevity of the question should not imply a casual or indelicate context for its use. Also it should not be treated with lessor significance compared to other gathered data, since you are asking the client for one of the most significant gifts, that of a referral.
Automated Client Feedback Methods
According to the 2017 Intapp Experience Management survey, 52% of firms reap the benefits of feedback. Voice of the client programs pair nicely with strategic account programs so the outreach happens to a targeted group. For firms without key account programs, a firm can easily slice their portfolio by looking at all the clients in the past year and applying the 80/20 rule (group the 20% of clients that make up 80% of revenue) and the data is easily parsed into top contributors and not. It is equally as important to reach out to those on top as those that are not to gain an understanding of what a top client looks like and one that is not as satisfied as well. These type of measures help a firm understand the levers in place to leverage when solidifying strong relationships and building on weak ones.
A data-driven client success program is not just about the ability to solidify loyalty but also expand the work the firm does with said client as well as delight them with that work. To this end, the same data discussed above can be used to unearth buying patterns, anticipate client needs and aid in pricing and monitoring matters. Although, according to the survey this is only being utilized by a very small and innovative proportion of firms.
Now that the value of this data is beginning to shine through the next piece of the puzzle is how to interface with it. Currently, if this data is being used for a client success program, it is collected manually from the various data silos around the firm. Often business development professionals are running around with clip boards or sending (often ignored) emails to gather input. Once collected the data is typically kept in a spreadsheet or on a SharePoint site for easier access by many. Technology is quickly entering the market in this space to help make the gathering and use of this data more palpable. Specifically, systems that automate data capture by integrating disparate systems but also support capture through automated workflows at pertinent points in the matter life cycle are ideal for these efforts so that business development has both qualitative and quantitative data. Top that with search capabilities to answer obscure experience questions which not only provides the power to business development to understand the client through data-driven success factors as well as illuminate potential opportunities but also enable them to quickly respond to RFPs, pitches, directory submissions and proposals. This is just the beginning for technology in this space, the doors are then open to the application of machine learning from predictive analytics to aid in cross-selling to natural language processing to auto classify qualitative information.
Intelligence Experience Management Systems
Experience Management for law firms seems to be the place to start in terms of interfacing with this data. It makes sense given how data-intensive the process is for collecting this information across the firm and how difficult it can be to put it to use. As Katherine Miletich, Director of Marketing at Vedder Price commented:
“[b]eing able to quickly assess the accumulated experience of a firm is critical in today’s business environment. You can try to pre-package all your credentials, and clients will always find a way of looking for a set of parameters that you did not consider before. Being able to drive into your source data – the actual hours worked on actual matters for specific clients – provides the detail that client want and gives confidence to a proposal team.”
In the same experience management survey referenced above, one of the most dramatic changes in how law firms are perceiving the need for experience management relates to the use of data in their processes. So-called first generation experience systems are very focused on one-dimensional work streams towards pitching, whereas modern thinking adds much richer functionality tapping more diverse data into the mix to illuminate client needs, develop sophisticated scoring to do predictive cross-selling analysis, build and intersect with alternative pricing models, support and promote collaboration, and provide a platform for metrics that indicate the overall client relationship health. Specifically, these tools are beginning to get the legal industry to a client-centric, outside-in model being leveraged by many innovative companies driving towards success outside of legal.
The benefits of such a system can be framed on a number of dimensions including improving efficiency, while simultaneously building a platform for strategic effectiveness driving client success. Ultimately this system leads to substantial, deep client relationships that drive business.
At this point the conversation frequently turns to the issues of data quality as well as firm culture that would stand in the way. For firms who are paving the way in this area, there are key learnings to get started. To begin, don’t let the idea of dirty data tie you down. The exception is not the rule in these scenarios. Data can be cleaned (it is 80% of the battle) and with proper momentum as the project picks up, the incentives to input correct data increase which strengthen the cause. That aside, start small. Choose a practice or industry to begin. Ideally the selection will not just be based on need and data but also a group of lawyers who want to play ball and are data driven. This leads to another important key in gaining momentum…get buy-in. Lawyers who are willing to collaborate and work with business development efforts to this end will aid in quick application and help gain momentum as the value is seen and articulated across the firm.
Putting the Data in Motion – Getting Started
Delivering superb client service is vital in this market in order to differentiate your firm from the rest. No matter whether one buys into the “software eating legal” idea, the fact remains data is here, along with the computing power to put it to productive use. Understanding the barriers business development faces at the firm, starting small and gaining buy-in can be the keys to a successful beginning.
Furthermore, there is a lot to be gained from data that already resides at the firm in order to give these types of efforts motion. In an increasingly client sophisticated world, clients are demanding this kind of proactive service from their providers. The ultimate question rests on how each firm puts it to work for their clients’ gain.
About the Authors
Jennifer Roberts is responsible for the data science and research component that supports thought leadership and new initiatives at Intapp. With a passion to deliver actionable analytics she leverages her skills to advocate, evangelize and build data-fueled products and insight that informs strategic decisions and solves organizational needs. Jennifer can be reached at Jennifer.email@example.com.
Mark Medice leads new initiatives and consulting services related driving law firm performance in their service with their clients. His work is focused on analytics, benchmarking, financial performance, strategic intake, service design, using technology to develop client relationships. Mark can be reached at firstname.lastname@example.org.
 See Outside In, Manning Bodine, 2012
 NPS ask a basic question about whether the client would refer us to another.