Poor data integrity in a law firm’s core applications can adversely affect a lawyer’s ability to efficiently bring in new business. Whether it’s a new matter typical to the firm’s practice, or perhaps a brand-new client, attorneys naturally want to start working on a new engagement right away. To do so, they ideally need a matter number assigned to use for time entry. Getting the matter opened as quickly as possible is a persistent goal in firm operations, but short-cutting necessary steps in doing so could present risk and data integrity issues.
Most law firms have a process for vetting and opening new clients and matters, often automated to some degree using conflicts of interest and workflow processing software. This process, referred to as new business intake (NBI), has focused on conflict-of-interest checks in most firms, followed by opening a matter in the firm’s system of record.
Increasingly, it’s not that simple.
Firms recognize that this process is the start of the client matter lifecycle and one of the few times that the firm is able to get attorneys’ attention for administrative functions. Inaccurate information collected about everything from budgeting to addresses to involved parties can persist in a law firm’s systems for decades. A firm’s ability to navigate the NBI process hinges on having historically accurate and normalized data to search and report against when evaluating potential new engagements.
Implications of Poor Data Integrity
From a risk standpoint, conflict-of-interest checks are one of the most important parts of the NBI process. The firm could have the best and brightest of conflict-check software and analysts, but without confidence in the validity of client, matter and party data, there is no assurance that the system is returning the appropriate and full set of relevant results, or “conflict hits.”
Generally, the firm’s billing system is considered the system of record, or “golden source.” In some instances, firms are turning to Master Data Directories to fill this role. Whatever database is serving up client and matter data, the firm should take the temperature of this data health on a regular basis. This could be in the form of exception reports or quarterly audits on data. How many new rows are listed in the matter table? Does that number correlate with business trends?
Review client and matter status counts regularly. Any trends? Are all related parties linked to a matter? These are just some examples of the self-audit questions that firms should ask themselves as a “gut check” for data integrity.
Billing Arrangements, Fee Arrangements and Budgets
Data integrity also plays a part in determining what a matter’s billing and fee arrangements will be. Fee and billing arrangement information should be validated against existing firm data with the hope that the firm will meet all of the client’s billing requirements (often extensive) by the first billing cycle. Not properly reporting that a matter requires task-based billing, or that a client only accepts invoices through an e-billing vendor, will cause bills to be returned unpaid. The billing requirements outlined in engagement letters and outside counsel guidelines are often burdensome for firms. To collect, the firm’s billing system needs to hold accurate data about billing requirements.
Over time, law firms have realized that the best time to get information about their clients is at the onset of a matter. Information about the demographics and types of clients that a firm is undertaking is beneficial for two reasons.
First, this information should help inform what business risk may be involved in a representation. What industry is this new client in? Is that in line with our corporate strategy and the types of clients that we want to represent? These are important questions for practice leaders and firm management to consider when accepting new clients.
The second reason to capture identifying information about clients is for future marketing purposes. A firm’s marketing department often needs to be able to tell prospective clients about the landscape of their client demographics. For example, if a major pharmaceutical company is looking for representation in patents, they may ask the marketing department how many clients the firm has in the pharmaceutical industry or how many patent matters they’ve opened in the last year. Without data integrity and reliance, marketing folks are left scrambling for numbers even if they know they have a steady pharma-client base.
How Your Firm Can Ensure Data Integrity
Rethink the Intake Form
It’s possible that an intake form or matter-opening process that was designed even just a few years ago no longer meets the firm’s needs, specifically with the growing need to capture complicated alternative fee arrangements and task-based billing requirements.
In rethinking form questions, important questions to ask include:
- Does the answer to all questions provide valuable data?
If the answer to a question on the intake form provides little useful information to practice group leaders or others that review the forms, or if the values are not stored in a database, it’s worth discussing removal. It could be that the question was added years ago at the request of a partner who is no longer with the firm, or is no longer relevant because of changes in the industry or firm. Being able to remove questions from the intake form is a big “win” in the eyes of legal assistants and attorneys who spend valuable time on these administrative forms.
- Are questions asked of the appropriate people, and at the appropriate time?
Firms can only rely on their data to the extent they trust those whom provide it to be in the position to answer suitably. “Garbage in, garbage out,” as they say. While the firm may be interested in capturing information about hybrid fee arrangements or budgets-per-phase, it’s quite possible that the legal assistant is not able to provide accurate responses on these topics. Determining the fee arrangement or budget may be better suited to the billing attorney, a pricing group or a combination of the two. Perhaps the firm wants to evaluate client demographic data – does an administrative group have better resources or more capacity to research this?
In addition to evaluating who is providing data, think about when they are providing it. It’s possible that the billing attorney does not know all of the adverse parties involved in a class action litigation matter before accepting the case. The firm could follow up weeks after the matter has been opened to ask if any additional parties have been named. Or, imagine that outside counsel guidelines are received after the firm has accepted the matter. Again, following up with the billing attorney weeks to months after matter creation can elicit necessary data collection, strengthening data integrity.
- Rely on information collected or validated from authoritative sources
While a Google search can provide interesting information, law firms should rely on validated data wherever possible. Several paid subscription services offer corporate tree information about parent companies, subsidiaries, directors and officers. Many of these services can be directly integrated with the firm’s conflicts of interest software. This can provide valuable information about the client’s corporate family, and depending on the terms of outside counsel guidelines, what the firm’s representation entails. Other credible sources that firms can employ for data validation are the U.S. Postal Service (for address validation) and the three major credit reporting providers. Increasingly, firms are turning to these providers to investigate and assess credit-worthiness of new clients.
Ensure a Single “Source of Truth” for Each Piece of Valuable Data
What system a piece of information should be updated in should always be clear. Client and matter information, including addresses, contacts and billing instructions, typically belong to the firm’s accounting system. The conflicts-of-interest system typically owns related-party data. Conflicting or outdated information should not be in any system. Develop policies around these concepts and elicit measures of security to control who can edit this data, and on what authority.
Another opportunity to ensure data integrity is to avoid duplicative data on the matter level when it may be more appropriate at the client level. If the client has only one address, for example, store that address at the client level rather than separately on every matter for that client. Similarly, if the client requires e-billing, notate that on the client level, and force all matter to revert to those requirements.
About the Author
Katelan Steele is a legal solutions consultant at InOutsource, LLC, where she advises law firms on streamlining business processes, specifically in new business intake and conflicts of interest.