Are you looking to grow your firm and make more money? Good business intelligence tools can help you achieve those goals.
We talk a lot about legal technology on this blog — for obvious reasons. When it comes down to it, though, law firms are businesses. There are plenty of business tools that are well worth considering, even if they’re not specifically designed for the legal space.
Business intelligence (BI) generally refers to the strategies and technologies businesses use to analyze business information, create actionable insights, and make business decisions based on those insights.
As a legal professional, you’re no stranger to gathering insights to make decisions, right?
The right BI tools show you what’s going on in your law firm business. Many of those insights aren’t obvious, even when you think you know your firm inside and out.
Here are some things to consider:
Client acquisition
If your law firm is going to survive, you need to bring in clients. Obviously.
To that end, the right BI tools can provide actionable insights gleaned from your marketing data.
You might not think that your marketing strategy is robust enough to justify a business intelligence tool to measure it, especially if you’re a solo attorney or small firm.
However, the opposite is true: if you’re handling your own marketing (or ignoring it and hoping that your reputation speaks for itself), it’s even more important to have real data showing how your clients find you. You don’t have time to waste on self-promotion that ultimately turns out to be useless.
Consider the various marketing efforts you might try over the course of a year.
Perhaps you hire a marketing agency, take out billboard ads, or sponsor youth sports teams. You probably invest time and effort into your law firm website. There’s also social media and myriad other opportunities to talk about your law firm publicly.
Do you know how many of your clients found you in a Google search or heard about you through a friend? Tools like Hubspot, Hotjar, and NG Data are designed to help you dig into these details.
Taking this further, law firms can use BI tools to drill down on their ideal clients and case types.
Specifically, you can figure out details like the ages, habits, and professions of your most profitable clients. This helps you target your promotions effectively and attract more clients who are easy to work with and good for your bottom line.
Financial insights
Now, let’s talk about what BI tools can do with your financial data.
We’re not talking about your accounting software that generates reports on accounts receivable, profit and loss, and other financial metrics. Software like Power BI, MicroStrategy, and Yellowfin connect those metrics to other aspects of your firm business so you can make more informed decisions.
For example, you might use your BI tool to identify your firm’s most profitable practice areas and case types. Tracking income and expenses by case type helps you decide which cases to prioritize.
BI tools can highlight other financial trends as well.
Armed with the knowledge that certain times of the year tend to be slower for business, you can plan expenses accordingly or focus on bringing in more business before these time periods.
By determining which existing clients generate the most revenue, a firm can also choose which clients from which to seek more business, or from whom you should ask for referrals.
Competitive advantage
While the legal industry is thriving as a whole, it remains extremely competitive. This makes it essential that your firm finds ways to stand out from the crowd.
This means you may need to use your BI tools to help you stay on top of industry trends and remain competitive.
Business intelligence can highlight areas where your firm outperforms or underperforms. Seek opportunities to play to your strengths, and in the meantime, build a strategy to improve on any weaknesses you find in the data.
You can also increase your credibility and authority with clients by being able to examine current and projected trends in the legal industry.
For example, a client’s industry may be exposed to increasing litigation costs in the future, and you could be the one to alert them to that trend. Then you can point to your own firm’s metrics — perhaps through quantified metrics on positive client outcomes — and show them how you can help them weather that trend.
Is it time to get a BI tool for your law firm?
Business intelligence is in widespread use among many industries to help companies make better decisions. Unfortunately, the legal industry has lagged behind in those efforts, especially outside the confines of Big Law.
As valuable as these tools are, though, there’s no point in spending the money if you’re not willing or able to use it regularly.
Business intelligence relies heavily on the quality of the data you can input into the system. To use it well, you need to track everything possible. That includes things like the way people interact with your website, how much you spend on filing fees, how often someone on your team speaks to each client, and how many reminders it takes to get someone to pay their bill.
Most of this tracking can happen automatically if you’re using current best practices to run your firm.
For law firms that don’t have a centralized process to keep track of things like marketing, spending, and client communications, that’s where you should start.
Because they’re so powerful and comprehensive, business intelligence tools can be quite pricey. You’re not ready to invest in that kind of sophisticated analytics if you don’t have good data to analyze.
If you have been tracking your business activity and you have good data, though, it’s worth exploring some of your BI options to turn that information into a competitive edge.
