Why law firms need to overcome data silos if they hope to stay ahead
Data silos (whereby a collection of data is accessible by one department but isolated from the rest of that organization) exist in all industries. A recent study from Forrester suggests that between 60 and 73 percent of data within enterprises goes unused. In a practice traced back to 3000BC, it is no surprise that legal firms aren’t exempt.
Average information spend per organization, although difficult to quantify, is clearly increasing year on year. If this increased expenditure is only leading to an increasing volume and number of information silos, it is detrimental for all and needs to be addressed.
THE IMPORTANCE OF OVERCOMING DATA SILOS
While the different groups within a siloed organization may believe they are functioning optimally, they are actually indirectly affecting their success by hindering the success of the organization as a whole. Siloed information can become quite costly for organizations. From replicated work, to missed opportunities, to underused resources, each can result in massive expenses for an organization. The importance of overcoming these siloes cannot be forgone nor overlooked.
WHY DO DATA SILOS EXIST WITHIN LAW FIRMS?
Not unique to one area or vocation, data silos are prolific across every segment of the legal sector – from practice areas, to geographies, to industries, and so on. The three most common types are:
- Cultural: caused by different departments operating either competitively or separately
- Organizational: caused by disparate, hierarchical structures hindering communication
- Technological: caused by different departments deploying different technologies at different times
IDENTIFYING THE BARRIERS
The common theme here is communicative barriers which result from real or perceived differences between teams, departments, seniority levels, specializations, locations… You name it. Any way the legal space can be divided, it generally is divided, and this is how silos are born.
In order to resolve these differences, whether real or perceived, one must be able to understand and identify their basis – the four most common of which we’re now going to explore:
1) Antiquated systems
It has been suggested that many in the legal sector have been loath to adopt new technologies. Now, we’re not saying this is the case for every law firm, some of our clients are continuously looking at ways to optimize their technology, but, for those that are resistant, technology systems have become entirely outdated or non-existent.
We don’t just mean technological systems here either. This can still be a largely analog problem, with physical documentation and filing processes dating back decades (if not centuries).
2) Disparate challenges
Law firms are full of distinct teams that have unique and varied roles, and thereby, information needs. A lawyer focusing on criminal law has a much different need than one focusing on mergers & acquisitions. So to do the Marketing teams for each sector within these firms- you start to get an idea of the range of distinct information needs. This often results in insular information infrastructure as each team assumes the information they are utilizing is only relevant to them.
3) Lack of knowledge infrastructure
While some legal firms are challenged by the number and variety of knowledge solutions within their organization, others struggle with little to no systems leaving information trapped in their physical form.
4) Sensitive nature of the information
In a sector that handles more confidential data than most, it is easy for groups to develop the mindset that data should be physically locked into one system available only to them. This is highlighted in a recent study by PWC that revealed 82% of the top 100 law firms express concerns relating to cybersecurity.
OVERCOMING THE BARRIERS
The solution is to centralize your knowledge sources and develop a robust information infrastructure, but this is much easier said than done considering the challenges discussed earlier. In some cases, there needs to be a fundamental shift in the legal sector towards technology innovations before the idea of centralization in any real sense is achievable. In others, it’s shifting the mindset towards an open-information paradigm where everyone acknowledges the value of reducing data silos.
To do this, the Legal industry needs to start looking at how other more traditional industries have dealt with modernizing their organizations. A publication in the Artificial Lawyer sums up the challenge and the solution succinctly; “The fundamental problem is this: Law talks to itself. It buys and sells to and from itself. It trains itself. It even regulates itself. And it judges its own performance against itself.” It is critical that these firms start looking outward to develop the strategies necessary to innovate and become technology adjacent before it is left behind, similar to what is happening in Banking with the FinTech revolution.
InfoDesk has been helping organizations develop their information infrastructure and overcome data silos for 20 years. If you’d like to contact one of our consultants for a free consultation, get in contact with us here.