Most lawyers in Spain and Portugal believe that greater use of data analytics will improve cost management and client retention, though survey indicates the subject is the cause of tension within firms
Law firms
in Spain and Portugal are upping their investment in data analytics
as partners become increasingly aware of how the more effective use
of data makes firms more profitable and better able to manage
costs, while also improving client retention.
New research conducted by Iberian Lawyer indicates that half of all
law firms in Iberia will be investing more money in data analytics
in the next 12 months. A total of 49 per cent of lawyers who
responded to our survey said their firm would be increasing its
spending in this area in the coming year.
Among the key reasons for law firms increasing expenditure is the
belief that improving how data is used will improve profitability
and cost management. A total of 80 per cent of respondents said
that their law firm could become more profitable by making greater
use of data analytics. Meanwhile, 82 per cent said the increased
use of data analytics would mean their firm could manage costs
better.
Keeping your clients
Most lawyers also believe that client retention will become easier
if their firm improves its use of data. A total of 70 per cent of
respondents to the survey said that greater use of data analytics
could improve client retention at their firm.
More than half (53 per cent) of respondents said their firm had
increased its use of data analytics in the last year, the survey
showed. Meanwhile, a bigger proportion, two-thirds (66 per cent) of
respondents said their firm would be making greater use of data
analytics in the coming year.
Six out of ten lawyers (62 per cent) who participated in the study
said that their firm currently made use of data analytics. The most
common uses were for: law department management, including making
decisions on staffing, project management and the use of resources
(60 per cent of respondents); rate and fee negotiation (56 per
cent); and information governance, defined as managing information
that the firm can use as an asset (56 per cent).
Predicting case
outcomes
However, only a minority of lawyers (33 per cent) said their firms
used data analytics for e-discovery, defined as reviewing
information in an electronic format in legal proceedings, with a
similarly small proportion (31 per cent) saying data analytics was
used by their firm to manage litigation – for example, to
make decisions on the strategy and staffing of cases, or to predict
the outcome of litigation.
While it seems most lawyers believe in the power of data analytics,
not all are totally convinced of its benefits. Around a third (34
per cent) of survey participants said their firm did not use data
analytics. It is perhaps indicative of internal tensions within law
firms in relation to this issue that, of the respondents that said
their firm did not use data analytics, the overwhelming majority
(72 per cent) thought their firm would be profitable if it did make
better use of data.
In
the dark
A lack of awareness and knowledge of data analytics among lawyers
is one of the key reasons why it is underused in law firms, the
survey suggests. A total of 60 per cent of respondents agreed that
a "lack of understanding of data analytics" was among the
biggest barriers to its greater use at their firm. Other barriers
cited by respondents included: the cost (44 per cent); data
analytics not being seen as offering any benefit to the firm (17
per cent); difficulties convincing law firm management of the
benefit of data analytics (17 per cent).
Despite such barriers, the consensus among lawyers in Spain and
Portugal seems to be that data analytics offer huge benefits to law
firms. The survey showed that a total of 85 per cent of lawyers in
Iberia believe that greater use of data analytics would improve
efficiency at their firm.
A total of 89 lawyers at leading law firms in Spain and Portugal
participated in our study, which was conducted via an online survey
carried out in March 2017.
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