Law firms that recognize the power in their business intelligence, without a doubt, gain the upper hand.
Today’s law firms face diverse pressures: a growing need to increase revenues, slimming margins in an informed buyer’s market, and a widening digital environment, which now makes it anyone’s game. With increasing client acquisition costs and a newly open playing field, there’s a search for the next competitive advantage.
A solid data-driven strategy can allow your firm to measure and control efficiencies, develop trend indicators, and ultimately lower client acquisition costs through targeted marketing. In the end, successfully leveraging business intelligence will translate to added value for the client and a more secure business for you in the long term.
Where Does Your Firm Stand With Its Business Intelligence and Analytics Plan?
Are your firm’s information resources aligned with its business goals? Here are seven steps for leveraging your firm’s analytics with insights to benchmark both performance and opportunity for growth.
1. Evaluate Your Law Firm’s Data Foundation
Above all else, a strong data foundation is key. Firms must take a full inventory of where data is stored, the data’s accuracy and cleanliness, and who (if any) are the custodians overseeing its care. It’s important to include valuable information stored with outsourced vendors such as websites, advertising or social media agencies. With this big picture in view, your partners and attorneys can then prioritize the metrics by which to measure any future success.
- Take inventory of your firm’s data with attention to its location and security, as well as the methods by which it is being stored.
- Pinpoint your firm’s data “stewards” and outline their roles and responsibilities. If no single staff member has this responsibility, consider outlining cross-functional duties and responsibilities within the firm.
- Assess how your firm’s data is being measured, reported and communicated, both internally (to key stakeholders) and externally (in client communications and marketing).
2. Set Your Goals
Once you’ve taken inventory of your data, before beginning or adjusting marketing campaigns or internal initiatives, it’s important to analyze data correlations and prioritize key goals. Above all else, it’s important to incorporate SMART goals and select clear and measurable metrics.
- Will your firm use these insights to optimize internal processes such as decreasing downtime and increasing timekeeper efficiencies?
- Will it be a guide in understanding your bottom dollar when submitting proposals and fee contracts to potential clients?
- Will it be incorporated and leveraged through marketing campaigns? If so, how? Through what channels?
3. Find Your Ideal Client or Case Type
While your firm may already track its sales and marketing activities through contact management and client relationship management (CRM) systems, the numbers are only valuable when they’re analyzed and part of an action plan. By segmenting your firm’s data, you can better understand your most profitable clients’ demographics, behaviors and buying motivations, and then develop a marketing strategy to speak to your specific buyer.
- Who is your target client? More importantly, why? And by what metrics?
- What is their industry sector, job title or demographics?
- What are their buying patterns, current needs and projected demands in the future?
- What is your most profitable case type? The least profitable?
- What factors have contributed to profitable cases’ or matters’ failure or success? What metrics should be incorporated to predict future results?
4. Leverage Against the Competition
With growing competition for work, legal services buyers are coming to the table better informed and with a more discerning eye. Your business intelligence strategy should always include market and competitive research with quantitative data. This allows your firm to benchmark its performance against the industry as a whole and use those insights when selling legal services.
- What are the current and projected trends in the legal industry? How do your firm’s practice and service areas fit within the industry as a whole?
- When evaluating these metrics, where does your firm outperform its competitors? Underperform? How can this data translate to your sales strategy?
5. Spot the Trends
If your firm has a strong data foundation, it’s important to move beyond collecting and reporting to incorporating a predictive analytics strategy. Doing so can reduce uncertainty regarding case outcomes, judge assignments — or avoid wasting time on potential clients that are unlikely to sign. There are various software options on the market, and it’s a great idea to look into the research and opportunities that they can offer to your firm.
- What do the trend lines show regarding your firm’s revenue and business activity? Is there a positive trend in a specific attorney’s case resolution strategies? What are the trend indicators?
- Does your data reveal a trend in the client experience, such as with reviews or feedback? If so, is there quantitative insight into the reasons for successes or failures?
- Is there information from your firm’s current trends that can give insights into future client or market behaviors?
6. Communicate Your Data Story Effectively
Numbers and information are cold, hard data that can measure where you are and help you adjust a business strategy. By themselves, however, they do nothing to pull at a buyer’s or stakeholder’s emotional needs. By refining and personalizing your message, you can communicate to the buyer’s exact motivations and pain points. It’s important to keep the message and client in mind when communicating an effective data story.
- What “data story” do you tell potential clients? Does it showcase your firm’s credibility and expertise through numbers?
- Does your firm use its analytics to advertise your advantage over the competitors? Are client and courtroom wins being quantified and communicated?
- Does your firm incorporate its data story in content creation, blogs, ads and email campaigns? In proposals and post-case follow-up?
7. Create Your Business Blueprint
With a successful data strategy in place, your firm can implement systems and processes to ensure future data protections and business continuity. There are no certainties with how technologies such as artificial intelligence, and business intelligence and analytics will develop. It’s important to align your firm’s business and data goals to ensure a secure and successful path for the future.
- Which key stakeholders will be responsible for your firm’s business intelligence and data strategy as a part of its long-term business plan?
- How will systems, processes and workflows be implemented and revised?
- What will be the benchmarks and when will they be measured and reported?
In addition to relying on traditional legal marketing and business development strategies, implementing a successful business intelligence and analytics program will help ensure your firm’s growth and resiliency.
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