Law firms ought to mine their own business (data), to your benefit

Large law firms, those that have handled many matters of a similar kind, ought to realize that if they extract and analyze cost and timing data for those matters, they will have an edge. The edge would cut on competitive bids, on budgets, on staffing decisions, and on other internal management. The firms that do such an analysis will more precisely and credibly estimate costs for budgets, set fixed fees and explain the amounts; project staffing needs; predict resolution times, and calculate likely profitability.

The marketing edge alone would be substantial.

Why, then, is data mining – where some results are shared with clients and prospects – not prevalent (See my posts of July 21, 2005: data mining by a consortium; Jan. 25, 2007: business intelligence and data mining; and Feb. 19, 2007: does data mining mean anything.)?

Maybe law firms fear the data will usher in a harsher world where firms have to compete more on cost.

Perhaps managing partners do not think statistically valid conclusions can be drawn from available data on matters, or that all matters are unique. It could be that senior partners in firms are ignorant of techniques to make sense out of data. Or, cynically, they can’t bill for the time spent on the effort.

Some fear that such an analysis will put some partners or clients in a bad light.

It may be that general counsel do not ask their key firms for results from poring over internal firm data. I suspect there is great value to be had from the data locked up in large law firms.

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