How to Transform Raw Data into Useful Management Information in 5 Simple Steps

No business can succeed without timely and accurate management information. This is particularly true for law firms. Legal sector changes, such as the trend toward disaggregated legal services and fixed fee billing, have only increased management information requirements.

Law firms have always been good at recording raw data. But how do you take that raw data and turn it into useful management information that enables you to make good business decisions?

What Is the Difference between Raw Data and Management Information?

A dictionary definition of data is “facts and statistics collected together for reference or analysis.” Data alone cannot help law firm managers to make decisions. Indeed, too much data can often distract from a manager’s decision-making process.

Data is only as valuable as the information and insight we can extract from it to help us make better decisions. So, in order to be useful, data must be converted into management information.

Management information is, quite simply, information that can be used to support decision-making by managers. Business intelligence is a term generally used for the set of techniques and tools for the transformation of raw data into meaningful and useful information for business analysis purposes.

Interestingly, BBC Bitesize has a great section for teaching teenagers the difference between data and information, yet there remains confusion about this concept among many adults, even within finance and IT professions.

Here are three examples of key differences between raw data and management information:

Raw Data

Management Information

Fees delivered value per bill

  • Rolling 12-month trend of fees delivered
  • Comparison of fees delivered between departments

Value of time recorded

  • % of fee earner time spent on chargeable activities
  • Number of fee earners who missed target hours in a month

Number of matters opened + fee estimate per matter

  • Estimated value of new business per month / year
  • 3-year trend of total estimated caseload value

Choose the Right Management Information to Report on

Good management information should both encourage desired actions and highlight potential problems and risks. This should be the acid test when choosing the right management information to report on.

Ralph M Stair  gives a good definition of “valuable information” in his book, Principles of Information Systems:

  • Accurate. Accurate information is free from error.
  • Complete. Complete information contains all of the important facts.
  • Economical. Information should be relatively inexpensive to produce.
  • Flexible. Flexible information can be used for a variety of purposes, not just one.
  • Reliable. Reliable information is dependable information.
  • Relevant. Relevant information is important to the decision maker.
  • Simple. Information should be simple to find and understand.
  • Timely. Timely information is readily available when needed.
  • Verifiable. Verifiable information can be checked to make sure it is accurate.

This list is equally valid for good quality management information.

All law firms record similar kinds of data, but the management information they require differs, according to their business objectives. Choosing the right management information to report upon is crucial.

Combine Your Raw Data with Your Business Rules and Context

Creating good management information involves incorporating your raw data with your business rules in the context of your organization.

As an equation: Management Information = Raw Data + Business Rules + Context

Your business rules relate to how your particular business chooses to interpret your data and statistics. So for example, your business rules might be:

  • How departments are organized – are your departments collections of individuals, or are they service areas which may call on the resources of individuals from many nominal departments?
  • The formula you use to calculate lock-up days
  • Your definition of net fees – i.e. is this including or excluding write-offs?

Armed with your list of business rules, you then need to consider your business context, which takes us to the next point.

Decide Who Needs to Know What and Find out When They Need It

To be useful, management information needs to provide insight. To provide insight, it needs to be directed to individuals with the appropriate background knowledge. This kind of context will only be known by you or others in your organization at the departmental and individual level. Put simply: who needs what? And when do they need it? Consultation with all departments is crucial to get this right.

Decide How Best to Display the Information

Everyone’s needs are different, but my experience is that there is a lot of common ground in how law firm managers prefer to receive information. I would advise the following basic techniques for data transformation in a law firm:

  • Use appropriate graphical displays. As a generalization, most lawyers are more comfortable with pictures than tables of numbers.
  • Ensure consistency. If drill-downs don’t add up to summaries, or if the same measure is defined in two different ways in two different places, users lose confidence in the information.
  • Communicate business rules and context. A basic ground rule for good communication is ensuring everyone is working to the same definitions and aims. Make sure everyone understands the business rules and the context used. This increases confidence in the information.
  • Don’t overload individuals with information. Information presented to any one individual should be 100% relevant: provide only that which is required to enable them to perform their role and meet or exceed expectations. Anything additional will simply waste their time.

Build a Good Management Information System

The conversion of raw data to management information should not be an arduous manual task. Management information systems should be designed to automatically transform raw data into meaningful and useful management information – and deliver it to the right person at the right time.

If you have followed the steps above, you should be armed with all the key information you need to build an effective management information system that does all the hard work for you.


Exen is a specialist provider of Management Information software to law firms. Exen SmartEye delivers fast, aggregated performance information to enable law firms to better manage their business. SmartEye dashboards monitor all aspects of law firm performance including fee earner KPIs, marketing, case progress, risk and compliance, and client-matter profitability. Click here for more information.

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