Years ago, a billable hour had a short life. A lawyer wrote it down, a firm billed it, and the client paid with little fuss. Once collected, the hour disappeared. Times have changed.
Not just the pressure to bill. Not just client resistance to paying.
And not just the short life. Billable hours live on in big databases where they tell great stories, like which practice group is really most profitable. Forward-thinking law firms use business intelligence software to turn data into stories.
Law departments can use outside counsel billable hours to tell their own stories, like which firm is most cost-effective. Leveraging Your IT Investments: Thinking Like an Executive (Metropolitan Corporate Counsel, May 2006) by Robert Kirtley of consulting firm Duff & Phelps, examines the potential for GCs to apply business intelligence to analyze their outside counsel. Kirtley makes several key points:
- Law departments “have become data rich and information poor.”
- Corporations require data analysis to support decisions. The GC will perform better by practicing “fact-based decision-making.”
- Case management and e-billing systems have generated mountains of data. Though many companies make some use of this data, there is vast untapped potential.
- The GC must acknowledge the need for and value of fact-based decisions; then she can “implement a process and a supporting technology tool that delivers insight.”
- With the right metrics and systems, the GC can “predict the impact of events.” For example: “What is the likely budgetary impact of a group of new product litigation cases coming in? How would switching from one outside counsel to another impact our total spend on a group of cases? How would changing our settlement strategy impact our costs and risk profile?”
If you tell stories, be sure they’re good ones. With the approach Kirtley outlines, there are indeed some good stories waiting to be told.
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