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The very idea of being a data-driven lawyer or a techno-driven law firm can seem intimidating at first. But surprisingly, contrary to popular notion, being data-driven doesn’t mean you have to keep crunching numbers or analyzing a ton of raw data throughout the day. Taking a data driven approach to running your law firm simply means keeping track of and utilizing certain performance metrics — such as your billable hours and financials, for instance — to significantly enhance the way you work. Here, let’s take a deeper dive into this topic in this article.
While taking a data-driven approach when running a law firm requires a bit more effort; it comes with many upsides.
Increase in turnover
If you are running a data-driven law firm, you automatically come into a position where your business can generate more revenue.
Say, for example, if you start analyzing data about your firm’s current financial standing, you can see how certain resources are utilized and are in a better position to answer questions like:
Investigating and arriving at the answers to these questions can help you identify even better opportunities to increase profitability.
Better planning & decision-making
Taking a data-driven approach is also extremely helpful for making informed decisions, as it gives you a clear and objective way to analyze your options and choose the best path ahead for your law firm.
For instance, you may be have been thinking for quite some time about changing your fee structure and are not yet sure if it would be a smart move for your business. But when you have all the data and the numbers you need in front of you, you can instantly view the last
time you raised your rates and also see the trend if there was a drop in new business afterward. In addition, you can even pull in external data to see how your competing law firms are implementing their rates.
More growth opportunities
In today’s day and age, data is the most powerful asset you can have, because it allows you to make predictions based on patterns you’re seeing and help you identify opportunities for potential growth. Not for nothing is it said “Data is the new Oil”.
Suppose you compare year-on-year data to see how much certain practice areas of your law firm have grown over time. You then start realizing that your legal practice has been stagnant for the pastfew years. With thisinformation in hand, you can now eitherstrategically increase your marketing efforts for your practice or re-allocate some of your planned budgets to better-performing areas — depending on what you think will help your firm’s growth the most.