Gwynne Monahan 2013-06-27 02:36:16
How Big Data Makes Practicing Law More Efficient It’s impossible to surf the web these days and not come across an article about Big Data, the massive amount of information we post online that government agencies and corporations collect. Clicks, purchase histories, the latest likes on Facebook or +1 on Google+ are all types of data being tracked and analyzed. Whatever the interaction, it gets recorded and stored for future reference. And with calls for “Do Not Track” legislation back on the table, there is a level of awareness not previously present. What we are all forgetting, however, is that we have been interacting with Big Data since even before the advent of like and +1. We’ve been interacting with Big Data any time we set foot in a Wal-Mart. In his book The Wal-Mart Effect: How the World’s Most Powerful Company Really Works—and How It’s Transforming the American Economy, Charles Fishman points out that: Whole forests have not fallen in part because of the decision made in the Wal-Mart home office at the intersection of Walton Boulevard and SW 8th Street in Bentonville, Arkansas, to eliminate the [deodorant] box. The nickel savings may seem trivial, until you do the math. With two hundred million adults in the United States, if you only account for the nickel on the container of deodorant in the medicine cabinet right now, that’s a savings of $10 million, of which customers got to keep half, $5 million, just for one small change, unnoticed by consumers, more than a decade ago. Read that again. Whole forests saved. Nickels adding up to $10 million in savings. All saved by simply eliminating one aspect of deodorant packaging: its cardboard container. And Wal-Mart used its vast treasure trove of data, its Big Data, or what Fishman refers to as its “insight and its muscle,” to institute a sweeping industry-wide change. And its treasure trove of Big Data is not limited to its home office. Wal- Mart makes the data available to its suppliers via a proprietary system called Retail Link. As Fishman explains it, Retail Link “contains a record of every sale of every individual item at every Wal- Mart store, every hour of every day for the last two years.” Its suppliers, therefore, can easily track sales and “understand where, and when, and why their products sell at Wal-Mart.” In fact, tracking technology has advanced so significantly since Retail Link was made available to Wal-Mart suppliers in 1991 that it now requires special training to mine all of that data. And we volunteered all of that data simply by standing in line at a Wal- Mart checkout counter, waiting for items to be scanned. According to Fishman, Wal-Mart “keeps track of the number of items per hour each of its checkout clerks scans at every cash register at every store, in every state, for every shift as a means of measuring their productivity.” That’s not much different from tracking your time spent drafting a motion or responding to client communications. The difference is the access to Big Data. There simply were no useful tools available to the general public for Big Data, either to access or analyze it. The simplest example of Big Data that was neither easy to access nor easy to analyze was the credit card statement. We have all received paper credit card statements, listing each transaction. Plotting all of those transactions over the course of a year required time, effort, and notebooks of graph paper. Tracking spending habits over a five-year period was reserved for the most meticulous people. However, government agencies and corporations such as Wal-Mart had the resources to build their own tools and convert all of that paper tracking into digital format. Even in 1991, it was easier to dial into a program like Retail Link to track a product than sift through notebooks of graph paper. As Wal-Mart demonstrated, easy access to Big Data is significant in terms of finding ways to cut costs and become more efficient while remaining attentive to customer needs. Just as Wal-Mart suppliers can access and analyze valuable data through Retail Link, lawyers can use advances in technology to retrieve and examine Big Data produced by their own firms—a key component to the “new normal” and continued proclamation of the demise of the billable hour. The billable hour remains an easy way to track what you’ve done in a day, such as how much time you’ve spent doing client intake, drafting motions, or returning phone calls. Tracking, though, proved tedious, requiring looking at the clock, marking down the start time, doing the work, and looking at the clock again to see what time you stopped. Today, the growth of cloudbased practice management systems has automated much of the manual tracking. There is no need to write down time on a scrap of paper and transfer it to a spreadsheet, or keep it in a spreadsheet to send off to the office manager for billing. With the click of a button, you can start recording your time, wherever you are. Not only can you record your time, but you can also run reports to see just how well your firm is performing. This real-time reporting means you can make corrections and then see the results instead of waiting a month. Reporting tools from cloud-based practice management software, coupled with using an individual control chart to establish a baseline measurement, means small law firms can become adept at using Big Data to streamline operations and strengthen the bottom line. In effect, small law firms have tools at their disposal to function like Wal-Mart. All of this tracking can accumulate to encompass years’ worth of data. From that vantage, you can look at your billables for you or across your firm and set your rates accordingly. With tools like cloud-based practice management platforms and individual control charts, small-firm lawyers can gradually move away from the billable hour without the worry of wondering if they are not charging enough. Analyzing the Big Data produced by your firm will tell you, just as it tells Wal-Mart, what works and what needs attention. Such information allows for more flexibility and control over your time, something that is increasingly referenced as part of the new normal. Big Data is not something to be feared, but embraced and managed. It will make the practice of law efficient, and in the process, enhance your life. Gwynne Monahan is the editor of the award-winning blog Small Firm Innovation. Best known by her Twitter handle, @econwriter5, she has written extensively on technology and social media and its uses in the legal industry. She is an open source advocate and holds a master’s degree, with honors, in information technology and privacy law from the John Marshall Law School.
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