Today’s law firms are all about competition. Competition to attract clients, competition to provide the most effective and affordable legal service, and competition to provide legal counsel that can win your client’s confidence and their case. There is also a competition to build and sustain a successful career that stands out from the rest. With so much at stake, forward-thinking law firms are reimagining if the law industry’s “rate x hours = fee” model is really delivering optimal value. So how do you increase your odds of winning in such a competitive environment?
Lawyers have traditionally competed with each other by combining two skills: legal reasoning and research. However, now there’s a third important branch to consider – marketing. And behind marketing are the analytics of that work that allow lawyers to gain an advantage in the business and practice of law.
Analytics need to do three things:
- Be prognostic
- Solve problems
- Be implementable
Data is the key, and firms can now make something out of marketing data collected via the newest law firm technologies available. Good data will generate good decisions when it is captured, evaluated, communicated, and acted upon in a timely and efficient manner. Analyzing and gathering data is something that many law firms don’t often do, so firms that focus on their marketing metrics are at a competitive advantage.
So let’s look at the five reasons why your firm should be utilizing reports and analytics.
See our legal analytics in action
- To track new leads by case type during the past 30 days. Leads need to come in at a consistent and then improving rate, or it will be just a matter of time before business shrinks. Client value is why there should be data analytics adoption because that’s where the money is found. Legal analytics initiatives must meet a client’s goals and expectations for budget, legal service delivered, and outcome. To meet such goals and expectations, legal analytic tools need to enhance the client’s overall business and operational model, their growth strategy, resources, culture and core strengths. The strength of what such analytics can provide—predictability, accuracy, and consistency of service delivery will, under many circumstances, end up mattering more than the speed of delivery of those services. A good soft – ware system for keeping track of all these incoming leads and where the leads are in the sales cycle is necessary to a good and balanced outcome. Has the prospect been contacted? Has an appointment been set? Did they come in for a consultation? Did they sign up?
- Once a lead comes in, your intake person should be tasked with keeping track of the lead status so as to not let them fall through the cracks. It is important to have a system in place to keep track of every lead and where the client is in the intake process. Leads that are lost are wasted opportunities. Firms lose hundreds of thousands of dollars every year because they do not track leads and quickly following up. Lost leads can hurt the reputation of your firm. So a good CRM should be implemented that will integrate with your website, phone system, live chat, and other lead sources while providing an electronic intake form to help qualify and disqualify leads.
- To track signups by case type during the past 30 days. Leads are a good thing to have, but they must translate into good cases. If lead numbers are up, but signups are static, there is something wrong. Leads and signups have to be analyzed together, because both are vital to knowing whether your firm is healthy. You will not know how successful your marketing investment is, or how you should optimize your campaigns for more success unless you track conversions.
- To track fees by case type during the past 30 days. Hourly rates are only a secondary component of what drives a bill’s cost. Other components should include decisions about how the various office tasks are staffed, the decisions about which tasks to undertake in the first place, and any decisions on which expenses to pass along to the client. When legal expense data are properly analyzed at the task level and then compared against industry norms, your firm can better predict the cost of services and whether that cost aligns with legal strategy and the expected outcome of the engagement. Both clients and law firms want the same things: economic visibility, pricing predictability, operating efficiency, and value delivery. Neither side is happy with the uncomfortable feeling of If leads and signups are healthy, that is good, but they must translate to cases getting wrapped up with a fee if your firm is to remain profitable. Leads, signups, and fees are vital signs of your firm, and monitoring them daily is necessary.
- To offer client surveys. Feedback from clients about their experience with your firm is crucial. Clients who are unhappy are a signal of a lot of potential issues at your firm. Feedback from clients about your firm is critical to identifying problems and for being able to address these issues before they multiply.
- To analyze fee center profitability. Fee centers are the departments at your firm. It is wonderful if your firm is generating a profit, but is it making that profit because all the departments are profitable, or is it because one department is doing extremely well and carrying all the others? A profit and loss statement broken up by each fee center makes this very clear.
Technology heavily influences the practice of law today. Fast-developing innovation of legal software used for lead generation, conversion rates, and fee generation keep gaining momentum. The emergence of innovative legal analytics is transforming legal services into an era marked by mass customization for certain types of legal practices. The mixture of billable hours plus the value of those services for other types of practices depends on how you take advantage of that technology. Don’t get left behind. Implement intuitive legal analytics into your law firm’s business model today.