Digital White Papers

FM16

publication of the International Legal Technology Association

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13 WWW.ILTANET.ORG | ILTA WHITE PAPER FINANCIAL MANAGEMENT Enhancing Legal Operations by Integrating LPM Techniques with Maer Management, E-Billing and Financial Analytics » It fails to acknowledge the administrative investment of both in- house and outside counsel if the budget is poorly conceived (i.e., if more changes require evaluation and approval). » It does not take into account that lawyers rarely engage with an MMS, so data input is typically performed by administrative personnel rather than those most familiar with the engagement. » It assumes that outside counsel's budget includes work not compliant with outside counsel guidelines, necessitating a burdensome bill auditing, write off and appeal process. The False Promise of Data Analytics Data analytics is all the rage. Soware vendors, consultants and legal process outsourcers (LPOs) have developed and are actively promoting tools promising beer management of legal maers and improved outside counsel oversight. With its ability to capture myriad financial and performance information, manipulate them in ways once requiring an incredible amount of man-hours and present them in a dashboard view to aid in visualization of challenges and opportunities, one would think data analytics was the ultimate management solution. And yet Mitratech's 2015 "Catching the Wave" white paper shows that only 36 percent of firms with over 40 aorneys, 22 percent of firms with 10-39 aorneys and five percent of firms with one to nine aorneys are using legal analytics soware. If analytics can be used to transform the interactions of in-house and outside counsel who participate in legal operations, why is it so rarely used? The underlying cause of lawyer dissatisfaction with practice support technologies such as an MMS is their overreliance on the data within them to provide desired behavioral change. Having tools to aid in financial analytics does not support vendor collaboration; nor does it build trust between in-house and outside counsel. The process is merely reactive, only aiding decision-making once the damage has already been done. It is like asking the doctor to treat only your symptoms rather than the underlying disease. What cure allows us to achieve desired operational excellence? One answer lies in a renewed focus on people and process via legal project management (LPM) coupled with improved data capture and financial analytics. Only 36 percent of firms with over 40 attorneys, 22 percent of firms with 10-39 attorneys and five percent of firms with one to nine attorneys are using legal analytics software.

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