published July 12, 2019

By Maria Laus, Author - LawCrossing

The Top 3 Reasons Data-Driven Law Firms Make More Money than Non-Data Driven Law Firms

The Top 3 Reasons Data-Driven Law Firms Make More Money than Non-Data Driven Law Firms
If two of the most honorable professions in our country is practicing law and being a business leader, is there a chance one person could be both?

While the answer is yes – as it should be when citing how law firms have grown into becoming businesses – some attorneys nearly aren’t as business savvy as others, leaving those attorneys to make less money.

Now with the emerge of artificial intelligence in the law firm, and the ease with which it is not just deployed, but understood and maintained for the firm’s bottom line, we have seen an uptick.

As an article that first appeared on Law Technology Today states, successful law firms rely heavily on data to provide the answers and guidance they need to generate more revenue.

However, it takes planning and strategizing to accurately evaluate the current health of your law firm and move it in a positive direction.

This post will explore the 3 top reasons law firms that are driven by data enjoy much more success than those that do not utilize data.

What is a Data-Driven Law Firm?

Data analysis has played an important role in business development for years. But, like most innovations, it’s a relatively new concept within the legal profession. Even with the enormous amounts of data generated, used, and stored within the average law firm, many attorneys fail to recognize how this information can be used to generate more revenue for their legal practices.

As the Law Technology Today article states, the data-driven law firm links the practice of law with the effective use of data to measure performance, address problems, and plan for a successful future. Effective algorithms help law firms benefit from both internal and external data.

Internal insights may reveal inefficiencies within your law practice process. For example, a utilization report might illustrate a shortage of billable tasks being completed each day. Armed with this information, firm leaders can identify the reason for this shortage and address it before any additional profit is lost. Internal data can also showcase opportunities to save money within the firm, as well as valuable forecasting information.

External data can prove useful in analyzing legal client behaviors and marketing trends for the purpose of creating effective business strategies. For example, website analytics can provide data about who is visiting your firm’s website, what pages they view when on the site, and how long they stay. Using this information, you can tailor your firm’s website content and postings to best meet the expectations of visitors.

Why Data-Driven Law Firms Generate More Revenue

Over the last few years, data-driven law firms have financially benefitted from their efforts. While it may seem that these firms have cracked some type of secret code to increased revenue, they are simply making the most of the data they generate, including information related to:
  1. Pricing
Alternative fee arrangements have become common within the legal profession, with increasing numbers of clients expecting these options when obtaining legal services. Many lawyers have not made the move into this arena because they fear setting their fees too low, but the right data is important to setting appropriate fixed fees.

Previous case data provides various types of information about a specific case, including how many hours it took, what individual tasks were necessary, and how much revenue your firm actually earned. This valuable data can then be used to set future fixed fees that adequately reflect all components of the case. So, the client gets a reliable flat fee arrangement, while you get a fee that sufficiently compensates your firm for work completed on the matter.
  1. Growth
A successful law firm must run like a successful business. Data-driven firms use analytics and performance reports to review the performance of the firm and make plans for the future.

 Forecasting predicts or estimates future patterns, like how many new matters will be added in the coming months, or which practice areas will continue to grow, and which ones will dwindle.

Data gives firm leaders the information they need to make smart, strategic decisions about the future of the firm.
  1. Better use of resources
Generating greater revenue is not solely about bringing in more clients, it’s also about how you and your staff spend firm time. Practice leaders can use this information to determine whether firm resources are being used in the most profitable and advantageous manner.


Becoming a data-driven law firm may seem challenging, but there are numerous resources available to help you collect and analyze the data you need to generate more profits for your legal practice. The first step is to collect the data, which can happen in a number of ways, and the second is to utilize that data to streamline your law firm toward efficiency that you and your bottom line will appreciate.

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