“82% of respondents reported that law firms are leveraging insights from total data intelligence and taking a holistic look at their own data,” according to a recent report by Ari Kaplan. With this increased spotlight on data, we believe it is imperative that law firms and legal departments are using high-quality data to make important decisions around scoping, matter management, and pricing.
Catherine Krow addressed the importance of data quality in her session, emphasizing that the legal industry cannot harness the power of data without first paying its “data debt" and transforming dirty and poorly structured data into actionable insight. We define actionable billing data as task level, well-labeled, accurately coded, and connected to context. When law firms and legal departments have actionable, decision-grade data, they will achieve better results for themselves and their clients.
Legal Procurement Teams Want a Better Understanding of Value from Law Firms
Current billing data and fee structures make it difficult for legal procurement teams to understand the value that law firms are delivering on engagements. One panelist commented, “show me the numbers that show me how you made this more efficient.” Procurement teams and legal departments need more detailed information from their firms to be able to move away from the frustrations of the billable hour model to value-based pricing.
We agree with Matt Beekhuizen who said, “hourly billing data is the information that we have now, and we can use it to bridge the gap to achieve value-based pricing.” When law firms gain a better understanding of their own hourly billing data, then they can provide clients with effective scoping, greater transparency, and predictably which can deliver on the holy grail of value-based pricing.
Legal Procurement can Play a Key Role in Driving Diversity