21 November 2023

Becoming a data-driven legal department

Author: Sacha Kirk Insights Resources

In the contemporary legal landscape, becoming a data-driven legal department is not just an aspirational goal; it is imperative for in-house teams aiming to refine their practices and enhance their strategic value to the broader organisation.

But what does it mean for an in-house legal department to be data-driven? Simply put, it involves harnessing the power of data to inform decisions, optimise processes, and demonstrate value.

Let’s explore the 7 steps involved in this transformation.

1. Embrace the cultural shift

The journey to becoming data-driven starts with a cultural shift. In-house legal teams must move beyond the traditional reliance on qualitative judgment alone and welcome quantitative insights into their decision-making process. This requires fostering a culture that values data collection, analysis, and interpretation as tools for enhancing legal and service delivery outcomes.

2. Invest in the right tools

With the myriad of legal tech tools available, selecting the right one can be daunting. It’s imperative to choose a legal operations platform that can capture, track and visualise a range of metrics, such as the volume of work per legal team member, legal spend to budget or the outcomes of litigations. A platform that integrates seamlessly with the organisation’s existing systems and can be customised to support existing processes and workflows is also crucial. Importantly, it should not only collect data but also allow for ease of analysis and actionable insights.

3. Data collection and governance

Implementing systematic data collection is the foundation of a data-driven approach. In-house legal departments should establish robust data governance policies to ensure data quality and consistency. This includes standardising data entry (automation of this task would be the preference), creating clear protocols for data handling, and ensuring data security, especially considering the sensitive nature of legal information. Containing the scope of legal data within one secure platform is highly advisable and allows for a more straightforward process for managing data. Consideration should also be given to the treatment of privilege, confidentiality, and access permissions when it comes to reportable data fields and reporting features to ensure data privacy protocols are appropriate.

4. Measure what matters

For legal departments to be genuinely data-driven, they must identify and measure key metrics that align with organisational objectives. This entails discerning which data points reflect internal efficiencies and external business impacts, such as efficiency gains through self-service and external work briefed out. Establishing benchmarks—historical or aspirational—is essential to gauge progress. These benchmarks must be actionable, with a clear rationale for how the insights will influence decision-making. A legal operations platform can play a crucial role in tracking these metrics, which should be presented through accessible dashboards. Ultimately, measuring what matters equips legal departments to demonstrate their strategic value, ensuring that data not only measures performance but also shapes it.

5. Integrating data into daily operations

Data-driven decision-making must become a part of the department’s DNA. This means integrating data insights into daily operations – from identifying legal risks in a business unit to prioritising work based on data-informed risk assessments. Regularly reviewing these insights can lead to continuous improvements in processes and strategies.

6. Data visualisation and reporting

To make data actionable, it must be presented in a clear and understandable format. Data should be delivered in easy-to-visualise formats that convey complex data sets in intuitive charts and graphs. Tailored reports can then communicate insights to stakeholders across the organisation, showcasing the legal department’s value and fostering data-driven decision-making at all levels.

7. Evaluating success and iterating

Finally, it’s essential to regularly evaluate the effectiveness of your data-driven approach. This involves assessing whether the identified metrics provide the expected insights and adjusting the approach as necessary. A data-driven department is always in a state of iteration, constantly fine-tuning processes to serve the organisation’s needs better.

Conclusion

Becoming a data-driven in-house legal department is not an overnight transformation. It is a strategic evolution that involves adopting new tools, skills, and mindsets. By embracing data, in-house legal departments can increase their efficiency and effectiveness and elevate their role as key strategic partners within the organisation.

As in-house legal departments make this shift, they’ll discover that data is not just a resource; it’s a beacon that guides strategic decision-making, driving legal operations towards a future where their value is quantifiable, the impact is clear, and decisions are informed by more than just legal acumen – they’re powered by data.

This article was originally published on our sister site lawcadia.com.

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