- All businesses, even law firms, operate in what is now a data economy.
- CMOs in the legal industry in particular cannot discuss strategy or identify new business opportunities without the necessary insights that come from client data and relationship knowledge.
- The key is unifying data across the entire client lifecycle so the people who need it are able to easily access it, but how do modern firms make this transition?
The legal industry is getting with the program, so to speak. Like many industries before it—including technology, financial services, and manufacturing—a large part of the legal industry now recognizes that data is a strategic asset. Further, modern law firms are now striving to build data-driven cultures enabled by emerging and innovative technologies like artificial intelligence (AI), cloud computing, and blockchain.
Progress has been made on this front, but it is still early in the new technology adoption curve for the legal industry. Despite the fact that law firms possess significant amounts and types of data, it is often fragmented by lawyer or practice silos.
Siloed data makes it impossible to derive the necessary insights and collaborate effectively. In addition, most of the centralized systems and processes that do exist are legacy systems, e.g., spreadsheets, generic , and SharePoint, that are incompatible with the rest of the firm’s technology and workflow processes. The result is missed business opportunities as the complexity of engagements continues to increase and lost market share to competitors that take a more modern approach to data. This dynamic has become a major issue facing law firms in the client-empowered era that exists today with more discerning, price-sensitive clients and leaner margins.
Although the top one percent of global firms will be insulated from profitability concerns for the foreseeable future, the other 99 percent must take action based on data-driven decisions in collaboration with institutional knowledge.
The CMO’s Dilemma
Although the scenario above applies to all functional areas of a law firm, the problem is particularly acute with marketing.
Rather than delivering proactive client insights that inform new business opportunities, many law firm marketing departments remain mired in administrative work due to the heavy responsibility of manual data gathering. In a 2018 Bloomberg Law study, legal marketeers cited “lack of time” as their primary challenge.
Eliminating the manual data gathering tasks to free up time for strategic consultation is critical. CMOs in particular cannot discuss strategy with lawyers and identify new business opportunities without the necessary insights that come from client data and relationship knowledge.
The Modern Law Firm and Technology Innovation Are Inextricably Connected
When people ask me what being a “modern” law firm entails, I tell them it means employing strategies, initiatives, and investments that enable the firm to keep pace with rapidly changing client demands, market conditions, and new technologies. These modernization initiatives typically involve unifying people, processes, and data.
The most successful firms are those that transition their organizations from a reactive to an insights-based posture. Making this transition accelerates a firm’s ability to win business with both new and existing clients. The key is unifying data across the entire client lifecycle so the people who need it are able to easily access it. Data that flows with limited friction throughout a firm—where and when it is needed—delivers insight and value.
So how do these modern firms make the transition? The highest-impact move is to replace legacy systems with a robust, full client lifecycle platform that facilitates key client planning (the “80-20 rule,” where 80 percent of an organization’s profits come from 20 percent of its customers, is just as true in the legal industry) to better positioning themselves for growth.
Specific to marketing, a unified system powered by modern technologies like AI and cloud computing eliminates “random acts of marketing” and allows CMOs to spend more time, energy, and discipline on enhancing the client experience.
By the same token, lawyers can use the best possible and most up-to-date data to make decisions, increasing their chances of exceeding client expectations and keeping retention rates high.
The net-net: by making the move to a modern, unified platform, firms gain the ability to use their data to seize nearly every opportunity for growth as opposed to not having the data they need and missing opportunities.
Data may or may not be the “new oil,” as the (now clichéd) maxim goes, but it’s pretty clear that every business operates in what is now a data economy. Thus, it’s not surprising that, armed with the right data at the right time in the hands of the right people, law firms can extract insights that drive better decision-making, and better decisions are every firm’s best fuel source for revenue growth and continued profitability.