What did we learn about law firm data in 2024? Find out more with Iron Carrot
Data continued to be the focus of law firm thinking through 2024. Many people found it surprising that some people didn’t realise that they were considering data opportunities or had data concerns because they were hyper-focussed on specific challenges that they needed to solve for their firm. Much of the conversation was about topics that (when you dig deeper) have data and data governance at their heart.
I have picked out the four topics that I think best reflect data in 2024:
- GenAI
- ESG Reporting
- Taxonomies
- Workforce transformation
GenAI is still on everyone’s mind
The 2024 conference season has illuminated the incredible potential of Artificial Intelligence, especially Generative AI, as a pivotal component of law firm strategies. A fascinating ongoing discussion revolves around the decision of whether to build or buy AI solutions. It’s heartening to note that the focus remains on the “why” and “what,” as we collectively seek deeper understanding and share insights about implementation and its positive effects on firms.
Conversations about the ways Generative AI can bolster productivity and efficiency are flourishing, with the catchphrase “supercharge your data” capturing attention. However, with the multitude of Generative AI products available, it is essential for law firms to craft a thoughtful AI strategy and gain a clear understanding of their unique needs to maximize the benefits of this technology.
Moreover, many firms are recognizing that Generative AI, while powerful, is not a panacea for challenges related to filing, tagging, and retention practices. Encouragingly, 2024 has witnessed the inclusion of Data Governance teams within AI working groups and committees, demonstrating a commitment to harnessing AI responsibly and effectively.
ESG Reporting is a competitive advantage
The rise of laws and regulations regarding environmental, social, and governance (ESG) reporting requirements has become increasingly evident. In 2024, many law firms recognized that their clients and potential recruits are showing a strong interest in the firms’ commitment to environmental sustainability, human rights, and workplace fairness.
Embracing ESG reporting has now become a vital component of a firm’s competitive advantage. In response, many firms are proactively hiring in-house experts or partnering with specialised consultancies to integrate key ESG principles into their operational frameworks and business strategies.
While it’s true that the legal sector has been navigating ESG reporting more slowly than some other industries, there is a wonderful opportunity for law firms to be nimble and innovate in this area with strong senior leadership support. Central to these advancements is the capacity to effectively capture, analyse, and utilize ESG data, allowing firms to track their progress and identify strategic enhancements.
Similar to the adoption of AI, Data Governance teams are vital participants in ESG initiatives, collaborating closely with ESG reporting leaders to ensure that data quality is top-notch. This collaboration enables the creation of insightful dashboards that can reveal valuable intelligence — like identifying which offices have the highest printing needs, or areas where energy efficiency can improve.
Taxonomies
As we witness an exciting shift in the emphasis on GenAI and ESG reporting, Data Governance teams and other stakeholders are passionately championing the evolution of law firm’s vocabularies. The importance of embracing a unified language—or at least developing a comprehensive synonym table—is becoming ever more apparent. By addressing the challenge posed by a lack of common vocabulary, firms can significantly reduce errors and enhance their effectiveness in GenAI, technology, and reporting.
We have also observed a reinvigorated commitment to the centralised management of essential taxonomy elements, typically spearheaded by the Data Governance team. These elements, which include office locations, practice areas, countries, regions, business sectors, industries, types of law, and legal jurisdictions, are fundamental to the smooth operation of a law firm.
Moreover, there is an inspiring trend among firms to adopt established external standards such as SALI or NosLegal to strengthen their taxonomy. These frameworks can be utilized as they are or serve as a springboard for creating tailored versions to meet our firm’s unique needs. Efforts are dedicated to crafting a robust taxonomy governance operating model while fine-tuning a firm’s vocabulary. This initiative thoughtfully balances the terminology used by people outside the firm, with the preferred terminology used by people inside the firm, ensuring effective and meaningful communication.
Workforce Transformation
Law firms thrive on the strength and dedication of their people, making the integration of Generative AI (GenAI), a commitment to Environmental, Social, and Governance (ESG) reporting, and enhancements to the firm’s taxonomy truly transformative. These advancements need to be supported by fee-earning teams who need a sense of accountability for the quality of data – a vital ingredient for exceptional client service and operational efficiency.
Firms embrace these opportunities by providing robust change management support to facilitate the adoption of GenAI and streamline processes. Additionally, incorporating data literacy training and engaging communications into the firm’s practice curriculum ensures that everyone is equipped to thrive in this new landscape.
Data literacy, often referred to as data fluency, is being actively managed by dedicated Data Governance teams. These teams, having been focused on business support areas, are taking this opportunity to raise awareness and enhance data collaboration within practice groups. This is often in the form of practice inclusion within the firm’s data governance frameworks.
What does this mean for 2025?
Firms have recognised that GenAI is not a cure-all for data management issues, leading to a strengthened mandate for Data Governance and Data Management teams.
There will continue to be an increased focus on effective ESG data capture and analysis, whether that’s supported by an internal expert or a consultancy.
Law firms which commit to centralising and improving key taxonomy elements, whether or not they adopt external standards, will improve their operational effectiveness.
None of the above will have an impact without a successful transformation to a data literate workforce.
Final thought
Overall, the legal sector is recognizing the need for robust data strategies and data governance to leverage these advancements effectively.
If you want to chat more about any of these topics, please get in touch.
