In our last post, we discussed how real-time compliance is giving power back to attorneys to prevent billing errors and get invoices paid faster. As we mentioned, this is the short term problem solved by the real-time compliance. But, as is often the case, there is something much deeper going on that law firms should be aware of.
We almost hate to use the phrase, “big data” in this blog post because it has quickly risen to buzzword status, which diminishes its meaning. However, it is important to acknowledge that one of the products of the information age that we live and work in is yielding billions upon billions of pieces of data each day. When analyzed properly, this data provides intelligence to help us make better decisions. Law firms and their clients are no exception.
At this point, almost all companies are using detailed analytics to guide business decisions. From the client’s point of view, each paid invoice is a piece of data, that averaged with others like it, establishes a “normal” for a given case or matter. This helps the client establish a clear understanding of the typical resources required to complete their work.
For example, consider a patent litigation case. The client may have worked with hundreds of law firms doing similar patent litigation. If those invoices are analyzed by their task and activities codes, they can determine how and how much time is spent working on each piece of that case. Using analysis to establish norms based on past codes and working with other firms, clients are able to establish expectations for the resources your firm requires to get the job done. For that patent litigation case, the client may determine that 10% of time should be spend on communication, 12% on planning, etc.
The key consideration for law firms is this: how accurate our your timekeeping practices? If the firm is not keeping time contemporaneously, the attorney might lump all of the entries together, rather than provide specific designations for each code. However, when the client reviews the invoice and analyzes the time spent, they may begin to scrutinize how much time is truly being spent on each task. Since the client has established ranges of what is considered “normal,” the client will determine that the firm is outside of this range if timekeeping is not accurate.
When the time comes for the client to make a decision as to which firm should be assigned the next patent case, they’re going to be guided by their data. The law firms who are closest to their range of normal and acceptable will win. On the other hand, if your firm becomes the outlier due to the detail and accuracy of your time entries, you will likely have a much harder time getting new cases.
The client now has a large amount of data about your firm and how it fits into the legal industry. That data comes strictly from your timekeeping practices. It doesn’t come from anywhere else. How accurate are your time entries? The more accurate you are, the more you will win.
How do you think data has changed the legal industry? Share your comments below.