Why Every Legal Department Needs Their Own Data Strategy

You might have heard that saying about data – it’s referred to as the ‘new oil’, or as a ‘new gold rush’. By now, most of us know that we are living firmly in the century of data. If there was any doubt – the Harvard Business Review has decided that data science is the “sexiest role of the 21st century”

In the corporate world, data is no longer the by-product of our day-to-day work. Instead, it’s a critical business asset. Companies that are better able to access and use their data have an increasing competitive advantage over their rivals. There is a race for companies to undergo ‘digital transformation’ and become data-driven companies. 

Although the legal sector has arguably been slower than other parts of the economy to embrace this rush towards data, there are signs that legal teams are now catching up. For example, according to this year’s Thomson Reuters State of Corporate Law Departments Report, the clear priority for many corporate legal teams in the US is to enhance the team’s effectiveness. This includes the adoption of more disciplined legal operations principles, more data collection and more data-driven decision making. 

For those legal teams that are now investing time to think about the role that data plays in their work, and who are looking to get the best return on that investment, it’s important to have a legal data strategy.  

What is a legal data strategy? 

The concept of a data strategy is for the organisation to have a deliberate plan for how it will collect, store, manage, share and use data. 

legal data strategy is the same, with the focus being on data that is relevant to the organisation’s legal function. 

“There are no rules about what goes into a legal data strategy, and there is no ‘one-size-fits-all’ approach. The plan could as simple as a few bullet points, or it could be a much more comprehensive strategic planning document.”   

– Michael Milnes, Head of Competition and Consumer Protection – Practical Law and Principal Lawyer at Supplied Legal

A typical legal data strategy plan might include: 

  • A statement about different goals and objectives that the plan is intended to achieve. 
  • Details of how the plan reflects, or fits into, the organisation’s existing statements of its vision, mission and values. 
  • A framework for how new data-related capabilities will be developed. 
  • Details of any budget or resources that will be allocated to achieving the plan. 
  • Any milestones, targets or goals the legal team wants to achieve – and the timetable. 
  • Accountability for different parts of the plan, and how success will be measured or defined. 

How can legal teams develop a legal data strategy? 

An effective legal data strategy should form an integral part of a legal team’s strategic planning process. Ideally, legal teams will already have a strategic plan that sets out its priorities for the year, and how the work of the legal team will support the organisation’s strategic goals. If your team doesn’t already have a strategic plan, this could be the impetus to start. 

“First, start by identifying the questions that the legal team would like to be able to answer – or that the company’s management expects the team to be able to answer. Data is only useful if it can help answer questions – so what are those questions?”

– Michael Milnes, Head of Competition and Consumer Protection – Practical Law and Principal Lawyer at Supplied Legal

Next, identify what data is being collected already. Remember that data can be structured (for example, a spreadsheet extracted from e-billing or matter management software), but can also be unstructured (for example, a shared folder containing different types of contracts, each of which includes information such as party names, contract length, price and payment terms and other data about the relationship). 

Questions to ask then include: 

  • Is the right data being collected? 
  • Does the team need to adjust how it collects data? 
  • How and where is the data stored?   
  • Can data be quickly and easily accessed? 
  • Does the team have the skills to analyse the data and draw conclusions? 
  • Is data being collected in a way that makes it possible to benchmark against other organisations? 

To show how this might work in practice, think about the commonly heard criticism – that ‘getting legal involved slows down the project’. So, for an in-house legal team, one strategic goal might be to build a stronger relationship with the business, by tackling this perception that the legal team is slow. 

The team might then decide that one element of its legal data strategy will be to start measuring and regularly report on the average duration of different types of matters. The team might set goals around standardising their process for when a request is treated as being ‘open’ and ‘complete’.  

Somebody in the team might be appointed to learn how to extract this data from the team’s matter management system. The team might set a goal to develop a reporting dashboard that includes this data. These steps will allow the team to monitor trends over time and across the business. It will also help the team identify and solve real problems, which, over time, will change the perception about the team being slow. 

How can legal teams implement a legal data strategy? 

The first time a legal team embarks on a project to adopt and implement a legal data strategy, it’s important to apply the principles of successful change management.    

It’s a good idea to start with a small data-related project. Involve people you know are “change champions”, who are keen to see the project succeed and try set achievable goals. Early wins can build momentum. It can also be beneficial to find a visible project, or a project where it is already acknowledged that there are questions that need to be answered. The best projects to start with are those where it will make life easier for an end-user in the business. It can sometimes be a good idea to pick a project that doesn’t sit with a specific department, so it isn’t “owned” by that department or subject to their interference. On the other hand, if there is a team that you regularly work with, and you count them as “supporters”, then getting them involved can be beneficial, because you can get honest and enthusiastic feedback. 

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You can also look into building partnerships with teams that can help you learn about using data. The legal team might have connections among the IT, finance or procurement functions, where there are often managers who have the skills to handle data and extract insights. You might be able to arrange learning and development support from the human resources function. It can also be helpful if you can connect the legal team’s efforts to any wider organisational transformation efforts that are in progress, so you get consistency and support from across the organisation.  

Taking the legal data strategy into the future 

Your legal data strategy need not remain static. As your legal team becomes more familiar and confident with managing and using data, the plan can evolve. Eventually data analysis and data-driven decision will start to become part of your team’s culture. The pay-off will be better quality outcomes, quicker turn-around times and more consistency. Your legal team will be able to deliver ever more precise insight to answer the strategic questions of how and exactly where to target resources – and will have the data to prove it. 

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