Many law firms now use business intelligence methods to improve profitability. Do general counsels have opportunities to use BI to improve their operations? 

I think the answer is yes. Two years ago my post E-billing Ignores the Elephant in the Room argued that GCs need to go beyond using e-billing to check for ministerial problems. They also need to analyze how lawyers work and then change the way they work. A recent article in the Legal Times (12/19/06), After the Case, Analyze the Results also argues that GC miss the big e-billing opportunity. They

“don’t take the time to analyze the outcome, including settlements, awards and other amounts paid or received. And yet those numbers often turn out to be much larger than legal fees. Some law departments have found that they can significantly reduce spending by focusing on their results.”

The author emphasizes that looking at e-billing data is not enough – data must be analyzed in the context of results achieved. Assessing results involves a mix of subjective an objective measures that require extra effort to collect. But that effort is worthwhile.

Whereas I emphasized looking at how lawyers work, this article suggests looking at outcomes. An outcomes focus is ultimately more effective because it avoids the need to analyze mechanics of how lawyers do their work. The outcomes approach is particularly useful “in a series of similar legal projects.” For high-stakes one-off legal matters, however, GCs who want to control the legal spend may still need to assess how lawyers work and select firms that achieve good outcomes and work effectively.