How to choose analytics software for law firms: questions, data and traps

Most buying decisions for analytics start from a feature list. For law firms the better start is the questions that come back every month, the files already on hand, and the traps that make a tool look right in a demonstration and wrong in the first board meeting.

Start from the questions

Any tool you consider should answer these from your data, not from a sample. Ask to see it.

The data you already hold

• Practice management system
• Matter intake records
• Billing
• Time and billing
• Cash
• Work in progress and receivables ledgers
• Time records
• Matter budgets

If a vendor needs a warehouse built before it can read these, count that in the cost and the time.

Ten questions to ask any vendor

1. What does it need in place before the first answer? A warehouse, a data model, a modelling language, a partner? Ask for the list and the typical weeks.
2. Who does the setup, and who maintains it? Your team, the vendor, or a partner, and what that costs after year one.
3. Does the AI calculate figures, or choose from computed ones? A language model that writes queries or code can produce a plausible wrong number. Ask what it is allowed to do.
4. Does every total reconcile to a control figure? Ask to see a bridge that does not sum and what the product does about it.
5. Can every figure be opened to its rows? An answer nobody can check becomes a debate in the meeting.
6. What does it cost in the first year, all in? Licences, consumption, implementation, modelling and training, not only the seat price.
7. How does data arrive, and who holds credentials? A file your systems already export, a scheduled drop, or a live connection with the vendor holding keys.
8. What happens to the data, and where is it stored? Residency, retention, deletion, and whether names can be replaced with identifiers.
9. Can we see it on our own data before we sign? A demonstration on a sample dataset tells you little about your own.
10. What does the tool do when it cannot answer? It should say so. A confident guess does more harm than no answer.

Checks specific to law firms

Ask whether the tool enforces these, and what it does when they fail:

• Realisation: Time at standard = billed + written off + written down + open work in progress
• Lock-up: Client work in progress and debtors sum to the ledgers
• Practice areas: Client fees by practice sum to client total; client totals sum to firm fees
• Cross-referral: Referrals sent across all partners = referrals received

The traps

Practice area gaps per client. Reports run by partner and practice. No report lists, per client, the practices it does not use.

Realisation per client over time. A write-off here, a courtesy discount there, and a client is at 74 percent that was at 92 three years ago.

Cross-referral. Origination credit is tracked carefully. Who introduces colleagues to their clients is not.

Measures to leave out

Billable hours as a client measure. Hours are an input. Realised fees and margin are the result.

Number of clients. Most firms have hundreds of one-matter clients that distort any count.

Pitches made. Without win rate by source it measures effort.

A scorecard

Where Covirage fits

Covirage reads the exports above, answers the questions with figures our tools compute and check, and is set up for you within a week. See analytics software for law firms compared, AI analytics for law firms and Covirage for Law firms.

For the measures in full, with formulas and exports, read Client and business development KPIs for law firms.