Canadian Lawyer

May 2023

The most widely read magazine for Canadian lawyers

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Page 14 of 67

OPINION UPFRONT 13 Law firms' use of data evolves Firms can use data to help improve diversity, allocate work, and reduce the costs of legal work David Cohen is senior director, client service delivery at McCarthy Tétrault LLP. His team is responsible for pricing, project management, process improvement, service delivery innovation, and client solutions implementation. As with diversity and inclusion programs, there is an emerging market of companies whose work allocation software systems involve extensive data collection, suggest file staffing based on data in the system, and track the progress on matters. The software can also track the development goals of associates and collect feedback from associates at speci- fied times during the assigned project. Firms can generate dashboards from work alloca- tion systems that allow practice group leaders or regional managing partners to understand better how the firm is allocating work at a macro level. The career paths of law school graduates have become far less predictable over the past decade. After practising at prominent law firms or in-house, many lawyers decide that while they want to continue to carry out inter- esting work for clients, they would like greater work-life balance and increased flexibility in choosing projects. For several years, in-house legal depart- ments have been utilizing alternative legal service providers (ALSPs) to assist with overflow work when they have a shortage of in-house resources to manage those matters. Some law firms in Canada and the US have entered this space by setting up captive ALSPs with rosters of high-calibre and experienced contract lawyers who can carry out work for clients at a significantly lower cost than law firm associates. These firms are finding that winning and retaining work is no longer just about dealing with clients' complex matters. It is now about day-to-day issues that in-house teams previously handled themselves or with help from more traditional ALSPs. WHILE BUSINESS teams have long worked with data to support better decision-making, drive efficiencies, and align with industry best practices, legal service providers have been criticized in the past – perhaps deservedly so – for being behind the curve. But things have been changing for a while now, starting well before the pandemic but advancing more rapidly since. With a renewed focus on corporate purpose, transparency, and embracing new ways of doing things, law firms and legal departments now welcome the shift to a data-driven work environment. Client expectations of their legal service providers have advanced. This evolution is evident from requests for high-level diver- sity statistics at the firm level to demands for greater diversity on the teams carrying out the work. As clients ask for metrics on the roles, responsibilities, and level of involvement of diverse team members, law firms leading on this front will work in partnership with their clients to align on diversity goals, learn from each other, and collaborate on initiatives. At the heart of meeting client expectations is data. Law firms are developing comprehen- sive demographic data tracking systems that comply with privacy legislation. Some solu- tions even involve integrating diversity infor- mation with billing software. Client requests are leaning toward more transparency. Law firms achieve this through regular reporting so clients and law firms can see trends, have better-informed conversa- tions about performance relative to a client's diversity and inclusion goals, and discuss opportunities to partner on diversity and inclusion initiatives and programs. Clients now request more specific data and, more importantly, hold firms account- able to ensure they staff teams with prac- tice excellence and diversity in mind. These requests are a welcome catalyst for law firm change. The firms that use the data, bolstered by our clients' voices, to implement short-term actions and longer-term succession plans that support the career success of diverse lawyers are the firms that will truly move the needle on diversity in the legal profession. The diversity of legal teams carrying out work for clients has been traditionally driven by the demographics of the legal service provider more generally but also by specific staffing decisions made by the lawyer leading the project. However, law firms are moving away from "open market" systems where senior lawyers choose which junior lawyers will support them. While the traditional approach may have had its benefits – including autonomy for partners and avoiding delays in assigning work – it also allowed partners' unconscious biases to seep into the decision-making process when delegating work. Providing better support for a firm's diver- sity and inclusion goals is reason enough to rethink how firms make staffing decisions, but structured work allocation systems offer other benefits, including more equitable work distribution, better matching of work to associate skill sets, professional-development support, and efficiency. "Providing better support for a firm's diversity and inclusion goals is reason enough to rethink how firms make staffing decisions"

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