Law Firm Drivers for Data Governance

Season 2 Episode 2

This is Season 2, Episode 2 of the Law Firm Data Governance podcast, the data governance companion for law firm leaders who want to know more about implementing and improving data governance.

Over this season, I’ll explore a law firm’s drivers and benefits of data governance. So whether you’re making the business case to create your data governance capability or making the business case to get some help to get started with data governance, I hope that this season helps set you up for success.

In this episode, I will discuss the drivers influencing a law firm to explore data governance. Since you can’t write a business case without understanding why you are looking to make a change, understanding these drivers is an essential first step.

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Episode Transcript

Welcome to Season Two of the law firm Data Governance Podcast.

I’m CJ Anderson, founder of Iron Carrot, and I’m thrilled to be back with another season of the data governance companion for law firm leaders who want to know more about implementing and improving data governance. Each week, I’ll help you with your law firm’s data governance initiative by sharing something that I’ve learned in my 20-plus years of working with information and data in law firms.

Over this season, I’ll explore a law firms drivers for and the benefits of data governance. So whether you’re making the business case to create your data governance capability or you’re making the business case to get some help to get started with data governance, I hope that this season helps to set you up for success. This is Season Two Episode Two of the law firm Data Governance Podcast.

In this episode I’m going to talk about the drivers that influence a law firm to explore data governance. Since you can’t write a business case without understanding why you are looking to make a change. Understanding these drivers is an important first step.

So what is a strategic driver? These are the things that shape a firm’s plans for the future. Another way of explaining a strategic driver is that it is a factor to be considered when developing the firm strategy. There are two types of drivers, internal drivers and external drivers. Internal drivers of change come from inside the firm and they relate to how the firm functions internally. These forces might include low performance or low satisfaction, conflict, profit goals, a new mission, or new leadership. External drivers include markets, competition, regulations, technology and client needs.

If you want to take an academic approach to drivers for change, then I recommend that you hunt out the ‘Burke Litwin’ model, which shows the various drivers of change and ranks them in terms of importance as a diagram with the most important factors at the top. Now, I don’t think it’s necessary for business case purposes at least to work through all 11 drivers on that model.

It’s more important to pick out the drivers that are burning platforms for your firm specifically. I’ve worked with many law firms and while their drivers are all slightly different, there are two common drivers that have appeared in every data governance business case that I’ve read or written. these are ‘client expectations’ and ‘everything happens in silos’.

So the first driver and the one that usually causes the executive to pay attention is an external driver and that’s client expectations. Companies in general are becoming more data-driven and more data-aware. PLCs, Banks and Insurers in particular are pushing law firms to share more of the data that they hold about them and to be much more transparent about matter progress and matter costs.

Clients are also often seeking to self-serve this information rather than asking their contact to produce it for them and send it by e-mail. This means that law firms need to have a better grasp on their client data. More than just being compliant with applicable data protection regulations. The second driver, everything happens in silos, is really three separate challenges.

Challenge number one is that no one trusts the data. In complex organisations like law firms, technologies, processes and people depend on each other for success. Most people in the firm will only see data relevant to them, so they need to be able to trust that they are looking at quality data. A law firm’s lack of data maturity means that the quality of the data is low, or the correct information is unavailable outside of the team that maintains it. A lack of access to good data contributes to a lack of trust in all the data that people get, so they start to create and manage their own versions of the same data.

Challenge number two is that law firms manage data for operational not for strategic reasons. Operational management means the day-to-day activities required to manage data as part of the firm’s transactional processes. In recent years, the focus for law firms has been on achieving operational efficiency. Most law firms review each business service in turn using techniques like Six Sigma and any documented processes start and stop at that business service function’s borders. But of course data doesn’t sit neatly in functional groupings. Many of the firm systems and processes utilise, for example, employee names or client names. Strategic Data management focuses on the activities necessary to ensure competitive positioning and takes a cross functional view of data and data management processes.

Challenge number 3 is the lack of communication and transparency of data decisions. Having an operational focus on managing data in functional silos has had the unintended consequence of minimising communication between teams. The lack of transparency means that no one understands the decision making process behind operational data management decisions, even for the data in which they have an interest. This has a massive impact on culture. Without transparency and communication, there can be no trust.

When leaders create structures that are designed not to communicate, employees mirror this behaviour and withhold what they really feel about the way that data is managed. This leads to a lack of trust in the data and in each other. Without transparency, there is no mechanism for people to contribute to or collaborate on a challenging data decision.

Data governance can help with privacy and regulatory compliance. It can also help with data-driven decision-making, a shared data ecosystem, an enhanced client experience and increased user trust in data. It can also help you improve operational efficiency. All of these drivers and challenges can be addressed in whole or in part by the creation of a data governance capability within your firm.

Thank you for joining me in this law firm Data Governance Podcast episode. I hope you enjoyed it. Please share like and review this episode so that more law firm leaders can learn about data governance and join me next time for episode three: Understanding your clients. Make sure you never miss an episode by following Iron Carrot on social media if you’ve not already done so. Please get in touch if you’ve got questions or topic ideas for future episodes.