Legal Department Data Analytics are an Imperative, Not an Option

Historically, legal departments lacked the means to measure and report on budgets, contract turnover, litigation outcomes, and compliance effectiveness. However, according to a Thomson Reuters article, as businesses increasingly demand alignment with broader organizational data practices, the adoption of legal department data analytics has become imperative. 

Data analytics involves the systematic analysis of data sets to obtain insights and inform decision-making processes. The significance of data analytics for Legal Operations lies in its use to make the case with accurate numbers for the needs and operations of the department as a whole.

By harnessing data analytics, legal departments gain visibility, actionable intelligence, and enhanced decision-making capabilities. This contrasts with historical practices, where decisions often relied on intuition or personal relationships. The adoption of data analytics fosters transparency and efficiency, steering Legal Operations towards evidence-based decision-making.

Organizations that haven’t adopted legal department data analytics can begin by identifying available data sources within and outside the legal department. Common sources include e-billing systems, matter management tools, internal reports, data from other departments, and government data. Starting with readily accessible data sets allows legal teams to achieve quick wins and demonstrate the value of analytics to stakeholders.

Measurements can be categorized into descriptive, diagnostic, predictive, and prescriptive metrics. For instance, tracking changes in outside counsel hourly rates over time enables legal departments to set and achieve cost-saving goals. Using data analytics also enables the creation of dashboards for visualizing key metrics, facilitating informed discussions, and strategic planning.

The role of artificial intelligence (AI) is integral to data analytics, streamlining the analysis of large datasets and identifying patterns. Legal departments are encouraged to embrace AI technologies to enhance their analytics capabilities and stay ahead of evolving trends.

Leveraging Legal Operations personnel can expedite the adoption of data analytics. Moreover, seeking guidance from industry groups and technology-focused platforms can provide valuable insights and best practices. Starting with modest initiatives and gradually expanding analytics capabilities enables legal departments to drive excellence, efficiency, and strategic value within their organizations.