- The new regulatory environment dictates (albeit not overtly) that management information is required to evidence a firm’s ability to manage risk and identify high risk matters. Law firms who demonstrate an ability to score their matters will in turn receive a higher risk score by the SRA and therefore enjoy a less intrusive relationship with their regulator.
- Underwriters for PI Insurers are increasingly looking at ways to better manage the profile of firms that they cover. As the legal sector, via the SRA is having to produce evidence of good risk management and as the insurance sector becomes less competitive underwriters will favour insuring firms with deep management information.
- The recent opening up of the legal market will lead to firms being purchased. Consolidation is inevitable. Part of any due diligence on a firm by a potential acquirer or sophisticated external investors will undoubtedly involve looking at the quality of a firm's management information and risk processes.
Sunday, June 9, 2013
2014 : The dawning of the value of matter data. Are you ready?
Historically, knowledge management for law firms has predominantly been precedent /document-centric – creating and collecting documents, filing, profiling and retrieving them – but in the near future,law firms will need to be able to manage knowledge around matters.
The reason for the shift of focus to matter data is driven by three main factors:
While legal matters are the ‘product’– the service unit that law firms sell to their clients – the legal industry has never before developed a holistic, automated approach to managing matters. Yes, most firms have fragmented and partial solutions to managing aspects of matters, including conflicts databases, client relationship management (CRM) systems, case management systems (CMSs), billing systems and the like, but very few firms have a single overarching system to analyse matter data.
The primary benefit of having technology to examine matter data is to reduce risks throughout the matter lifecycle.
So, why hasn't the legal industry come up with this system yet?
There are two reasons: first, because we’ve been able to get along without it. For the reasons set out above the landscape up until now has not dictated a need for it. After all solicitors are a group of highly skilled people who can and do tackle tough problems as they come up without a manual.
The second reason is that, until recently, creating this overarching system was impossible to do. With so many variable elements, solicitors were unable to track and manage everything.But, by now harnessing access to growing computing power and the ability to integrate information from different systems, the impossible is now possible.
By connecting all the dots, software such as ClientCare Monitor can provides COLPs and COFAs with visibility to matter data based on an adjustable scoring metric, allowing them to risk score matters, identify training needs,conduct trend analysis or compare related matters for pricing and business development.
Of course, for many firms, there is simply not enough time or margin to invest in rethinking the value of matter data. The vast majority of firms will take a ‘wait and see approach’. The new regulatory landscape thus far thus done little to change habits or processes. In a tragic economic climate there is simply not enough slack to focus on long-term risk management, too much urgency in the now to take the time and to plan ahead.The short term bills make it easy to ignore the long-term opportunities.
To quote the Seth Godin the an American entrepreneur, author and public speaker : “We're going to spend our entire future living in tomorrow—investing now, when it's difficult, is the single best moment”.