The following article is by Janet Stanton, Partner, Adam Smith, Esq.–Bruce

A few years back, we were meeting with the Executive Committee of one of Canada’s Seven Sisters firms.  As   part of our staying current on trends in Law Land, we often meet with firms with no agenda other than to discuss what we’re each seeing in the industry.  I call these sessions “consultant improv” – where firms fire random questions at us and we try to answer as intelligently as we can.

Fortunately this particular meeting was via Zoom.  I say fortunately because at one point a committee member asked in fairly skeptical tone, “Why do law firms need data?”  Because we were on video, I’m hoping they did not see our jaws drop.  The clear implication from the question and tone was that the speaker viewed this notion as utter nonsense.

Whether overtly expressed or not, lawyers are often skeptical about data, especially if it does not comport with their take on an issue or their own experience.

For law firms this can yield disappointing outcomes.

In our research on firms over the past 20+ years, a key finding is that, in general, firms operate with an astonishing paucity of information about their own business, their clients/industries, how they’re viewed in the marketplace and their (actual, not imagined) competition.  This seriously hobbles firms’ ability to make well-informed decisions or, frankly, to effectively service their clients.

And, we’re not getting remotely close to “analysis paralysis.”  We’re talking about the most basic information that would be SOP in any other industry.

The following examples are hardly esoteric:

• Client and industry intelligence (synthesized and organized – so it is useful; not a data dump)
• Business/marketplace intelligence (ditto)
• Competitive intelligence (ditto)
• Financial intelligence, including profitability on a granular level – client, matter & partner
• Client relationship dynamics (including client feedback)

NB: There are excellent sources of syndicated research on industries (such as IBISWorld).  We also recommend firms engage with objective, experienced market analysts for more customized  research, for example, on how the firm is viewed externally or on specific clients or prospects.  It could be as simple (and inexpensive) as engaging grad students (this is what we do for our company).

Since the recession of 2008-2009, our (and others’) research confirms that there has been a clear trend among the more successful firms (as defined by financial performance).  And, that is that these firms are run in a more business-like manner which has broad implications for firms including using data and insights for more cogent decision making.

Viewed through the lens of a firm’s strategy this will facilitate more effective programs; you’ll be shooting with the right ammunition at the right targets (as opposed to shooting in the dark).  This would also allow the firm to service their clients better; anticipating issues (“seeing around corners”) – and being able to provide what clients say they most value from their law firm providers which are solutions to their more vexing issues.

Moreover, one of clients’ most deeply held and evergreen beefs with their law firms is that firms and lawyers don’t understand their business. Getting smarter in this area could well translate into a competitive advantage; you’ll certainly have more robust conversations with your clients.

In closing, I’m reminded of this from David Hume:

“A wise man proportions his belief to the evidence.”