At any given time, corporate legal departments (CLDs) have countless balls in the air. With so many factors to consider—from choosing the right law firm to estimating the time it takes to resolve a matter to enforcing budgets—it’s easy for things to slip through the cracks. On top of that, many CLDs lack the data necessary to better control costs or achieve positive outcomes. In fact, many CLDs still rely on public perceptions and personal instincts to select outside counsel. And while instincts are great, they apparently didn’t help one of our clients who, before they came to us, lost more than $50 million due to incorrect budgeting.
For them, the cost of relying on gut instincts was astronomically high—just as it is with too many of their peers. But there’s good news. Your CLD can now leverage the power of predictive analytics to better estimate costs, budgets, matter cycle times, and more, leading to better and more efficient outcomes.
What is predictive analytics in legal operations?
Predictive analytics uses historical data culled from real invoices, firm performance metrics, and other data points to estimate budget and cycle times, match the right law firms with the right matters, and more. The more data the system collects, the more accurate the estimates become over time, giving your CLD a tighter rein over its legal spend. Predictive analytics essentially creates guardrails around a legal matter, controlling costs even before the matter is fully underway.
Our new eBook, Increase Value from Your Law Firms Using Predictive Analytics, explains how you can use actionable, intelligent data analysis to more efficiently and effectively manage outside counsel. More specifically, the eBook explains how you can use predictive analytics to:
- Choose the right law firm. Perhaps the most important factor in a matter is which law firm you choose for it. Historical data can hold the key to determining which law firm is right for a particular matter and what their budget should be. But quantitative data, like how much time and budget a matter usually takes, must be combined with more subjective measures to make the right selection and get the most bang for your buck.
- Compare expected vs. submitted budgets. Setting budgets is crucial for controlling costs. According to Altman Weil, only 54% of CLDs require outside counsel budgets and only 34% enforce them. Predictive analytics can help your CLD estimate how much a particular matter should cost before a law firm offers its figure. Predictive analytics can also get more granular and help you break budgets down by phase: Discovery, pre-trial, and trial.
- Estimate cycle times. Unfortunately, it is common for CLDs to skip the important step of estimating cycle times. Predictive analytics can offer you accurate insights into how long it will take to resolve a case based on data from past similar cases and give you a sense of what red flags may lie ahead.
Don’t let matters drag out and dollars add up
When matters drag out, the dollars add up. Predictive analytics can help you determine which firms are offering a realistic budget and timeframe, in addition to considering past experiences your department has had working with a firm. Download our eBook today and learn more about how predictive analytics can help you minimize surprises and maximize value.