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Legal IT: Build a strong data foundation, reap the rewards

image of Elliot Daly Elliot Daly
Elliot Daly 12 Nov 2020 Time to read: 

It is widely acknowledged that “data is the new oil”. Ever since Gartner analyst Doug Laney defined big data as three dimensional (volume, velocity and variety) organisations of all stripes have been trying to understand how to manage and generate insights from their own pool of “oil”. Law firms are no different.

Data held by law firms is often fragmented and complex, coming as it does from public sources such as courts and regulators as well as their own internal processes for timekeeping, billing, matter management and the like.

Other professions, such as medicine or consumer marketing, have years of experience integrating data analytics into their businesses and using analytics to provide competitive advantage. When it comes to law firms and in-house legal departments, however, data-driven decision making is relatively new and uncharted territory.

Improving the management of legal data can often shine a light on inefficiencies within legal firms (e.g. a utilisation report might illustrate a shortage of billable tasks being completed each day) and can also showcase opportunities to save money within the firm, as well as providing valuable forecasting information. Ultimately, it’s the same data presented through a different lens.


You understand that you have data but how best to leverage it and reap the rewards?

The data-driven law firm links the practice of law with the effective use of data (irrespective of source) to measure performance, overcome inefficiency and improve profitability. These outcomes are typically driven by the development of a “legal analytics stack” covering analytics in Research, Judicial, Practice Management, Matters, E-Discovery, Compliance, Contracts, Document Automation, Risks and Tax (LexisNexis Nov 2019). But regardless of where you develop your analytics capabilities ultimately using data in the right way can lead to improved litigation outcomes, better client experiences, improved pricing strategies (particularly in current market conditions) and margin improvement through the use of automation tools that improve billable resource utilisation.

So how do you get the point where you are realising these benefits? You understand that you have data but how best to leverage it and reap the rewards?

It’s not rocket science – put simply you need to create a strong data foundation and then utilise this in whatever use cases support your firm’s strategic intent. What do we mean by a strong data foundation?

Data Foundation small


We have seen on several occasions that most data management initiatives are run under the auspices of transformation programmes (HR, Finance, Sales). This is typically putting the cart before the horse – data initiatives should be initiated ideally under the sponsorship of a CDO or COO or even better the CEO. You need high level sponsorship to marshall the necessary resources and effort needed to create a sustainable foundation.


A large proportion of legal data is held in the solutions that are used throughout a law firm: case management and document management systems, e-billing solutions, risk registers, law firm reports, and emails. Data is being created in other pockets too, with the explosion in the use of legal technology software or legacy productivity systems. With the plethora of data that exists there needs to be assigned ownership for decision making and governance process adherence.


Data architecture is how you define how your data will support the business intent: It should leverage industry standard frameworks, be agile and iterative and identify a path to strong foundation maturity. Typically, architecture looks right across the data stack from data collection, integration and storage through to data access and the development of an enterprise data marketplace. The most important aspect though is to understand what is important to your business first and then build architecture in support of your goals. For instance, if you are looking to respond quicker to regulatory compliance you may want to focus on data security and consent, metadata and governance. If as a business, you want to improve utilisation of data and aid automation practices your focus may be on data acquisition and integration and semantic discovery.


Without data quality there is no data trust which destroys your ability to get people to do the right things. DQ is about improving decision making achieved through 360° profiles of your customers/employees, continuous monitoring and profiling, ontologies and master data management.


You cannot achieve sustainable data management practices without investment in some kind of tooling. There are numerous tools that can help with data processing, metadata management, data discovery, data quality workflows, analytics etc. Choosing the right technology vendor to support your endeavours is a critical step – avoiding vendor lock in but also making sure the platform(s) will be fit for purpose and commercially viable for your future needs.


Data, like technology, is not a panacea. It requires a use case that is material to advancing efficient, reliable, fast, scalable, processes that benefit clients and law firms alike. Data and technology are essential components of modern law firms and must be adopted, embraced, and utilised to service clients in the digital age.

Data analytics, and the insights they enable, has the potential to transform incumbent legal culture and provide a step change in client engagement.

Will firms invest in a strong data foundation? Will they adapt to leverage data as the basis for making decisions that drive internal change and enhanced client delivery? One thing is certain: in the digital age, legal providers that fail to make this investment will be firmly in the rear-view mirror of those that do.

Here at Peru Consulting, our industry experts are ready and waiting to help your firm use its business data to create a better, more efficient and more profitable business and we have already published a number of data insights articles covering Data Strategies, Reference Data Architecture and Data Trends.

Peru has a proven data architecture toolkit based on leading industry standards – we can help you assess your current level of data management maturity and develop a data maturity roadmap & strategy aligned to your firm’s business strategy.

To get started on creating a smarter, more data driven business, please contact Peru Consulting:

Email – info@peruconsulting.co.uk

Or for more information on our experience and expertise, please visit:

Web – https://peruconsulting.co.uk/

Previous articles on Peru’s insights into the Legal Sector can be found here.

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