“Work smarter not harder.” This rallying cry has become especially relevant to law firms due to flat demand for law firm services over the last seven years, which is in sharp contrast to the 4% – 6% annual growth in the legal market prior to 2008.
To thrive in a flat market, firms must do more with less. The key is intelligence. This refers to more than the great legal minds of your firm’s partners and employees. Intelligence also encompasses the firm’s data, how it’s generated, analyzed, and shared.
Read on to learn more about the four types of intelligence solutions distributing the legal industry and how your firm can leverage data and systems to drive internal efficiencies and sound growth strategies.
Artificial Intelligence (AI)
AI investment is growing among law firms according to the ILTA Technology Purchasing Survey. When asked how the respondents thought AI would most influence the future of law firms, 71% of survey responses indicated electronic discovery, followed by document automation (41%), and contract analysis and automation (34%).
The potential of AI-driven technology platforms is huge notes Jill S. Weber, the Chief Marketing and Business Development Officer for Stinson Leonard Street, and the Past President of the Legal Marketing Association.
“[AI platforms] can do things via technology that reduces the time it takes to get clients an answer, significantly reduces client cost, and enables access to information 24/7,” she said. “Clients will no longer have to wait for a lawyer to call them back.”
Automation of internal processes is another tour de force for AI. CRM automation tools like Introhive eliminate the need for partners and attorneys to manually enter data into CRM, saving each practitioner up to 5.5 hours each week, allowing for more time to be spent on billable, client-facing engagement.
AI can also provide more accurate risk assessment, conduct helpful research, e-discovery, and highlight document errors—all tasks that would otherwise bog down legal teams. AI can even help with marketing and bring more visitors to your website. For instance, AI algorithms can analyze when the best time to post on social media would be and schedule your post for that time maximizing a firm’s social selling potential.
But technology is only one piece of the puzzle. It is also critical to have the the right data, talent, and culture to create an environment in which AI can provide the most value.
Business Intelligence (BI)
Business intelligence technology and reporting is taking the business world by storm and is becoming a must-have for law firms. Business intelligence solutions bring together widespread data and information at the firm so that analysts can create quantitative data dashboards and reports to help the firm make smarter strategic decisions. These business dashboards and reports can mash up data financial systems, matter management, CRM, data warehouses, billable time utilization, social media, web analytics, and other internal sources.
A survey of 110 organizations demonstrated a high level of utilization of business intelligence in law firms. However, the effectiveness and sophistication of methods vary. 48% of law firm users have no experience with reporting and visualization software.
There are three key areas where BI dashboards are delivering strategic value to law firms:
- Visualize firm-wide intelligence to illuminate understanding around practitioner utilization and client retention rates
- Individual-partner intelligence to highlight current performance to target metrics for hours, billings, and collections
- Client-specific intelligence to encompass all data related to a client including open invoices, relationship history, and types of services contracted
Nearly 70% of litigation departments and 53% of law firm managing partners desire BI dashboards which highlight key business insights that help them manage their practice areas more efficiently. The most desired metric for law firm respondents was document review (85%) but data collection, processing, production, and identification were all desired by over half of respondents.
As law firms look to advance BI efforts, it’s likely that they’ll need to look externally for BI software that simplifies the aggregation and reporting of critical business data. By processing the data in a meaningful way, firms can analyze a wealth of data to discover what days and times attorneys are most productive, which pieces of marketing thought leadership has the greatest impact on new business efforts, and which practice areas are the most profitable and why.
Competitive Intelligence (CI)
Competitive Intelligence software is growing in popularity among law firms as access to insights on current and target clients, competitors, and even market growth intelligence can be extremely valuable to a firm’s strategic planning. Even with an increased investment, firms still struggle to realize the full potential of CI.
Specifically, 80% of law firms consider their CI departments to be more reactive than proactive, with 61% saying that the function is more focused on tactics than strategy, according to CI research. Even though CI has significantly advanced since the concept was introduced to firms in the early 1990s, there’s still a long way to go.
Not surprising, the more focused the CI function is, the better the results. Firms with a formal CI group outperform firms who approach CI more casually. A designated CI professional who interfaces directly with current and potential clients, industry experts, legal technologists, alternative legal services providers, vendors, and competitors is more likely to yield actionable data and sound strategy for the firm.
Relationship Intelligence (RI)
For a law firm, acquiring a new client can cost 15 times more than keeping an existing one according to a recent report by The American Lawyer. At the heart of all growing accounts is a relationship. In fact, boosting retention rate by just 5% can increase profits by 25% to 95%.
Being able to foster and cultivate deeper client relationships can directly impact the longevity of client retention. One innovative way law firms are growing new business, cross-sell and upsell potential with existing clients is with relationship intelligence technology.
For legal business development to be effective, firms need to have a better understanding of how relationships with clients are growing, how frequently are clients being engaged by partners and attorneys, and how is the firm’s relationship capital growing to support wider relationship maps to ensure account handoff over time.
Relationship intelligence software enables firms to see “who knows who” and “who knows who best” across the entire enterprise. From board members, c-suite and partners, all the way down to junior level associates. Introhive customer Gould & Ratner was able to map over 100,000 relationships across their firm of only 100 employees to increase insights into new business development opportunities for the firm.
In addition to increasing visibility into the firm’s overall relationship capital, relationship scoring measures the engagement of attorney/client relationships and proactively alerts the firm to critical situations where client retention might be at risk to ensure corrective measures are taken quickly.
Get Smart About Your Firm’s Data
The industry’s leading firms are investing in intelligence software to strengthen business development and their competitive advantage. Thanks to software-as-a-service models, access to intelligence solutions is a cost-effective investment that quickly results in a tangible ROI for the firm.
The truly innovative firms have already started building multifaceted solutions where the firm has on-demand access to business data, competitive intelligence, and client relationship insights. Where does your firm stand by comparison?
If you’re ready to start exploring how AI, BI, CI, and RI can transform your law firm, contact Introhive today to learn more about our platform.