Without data, you are just another person with an opinion ! (W. Edwards Deming)

“Without data you´re just another person with an opinion”  (W.Edwards Deming*)

This quote is perfectly fitted to the need of a numerical and objective base in decision making (be it strategic or operational) by the companies’ managers and mainly by the partners who perform the role of managers in law firms.

As an engineer, I feel impelled to use the metaphor of a building and its foundations, much used in several areas, including the religious one, where one makes a reference about the stability of a building in relation to the quality of its foundations (a house and a building raised on a fragile support structure are destined to become deformed, cracked or may even collapse).

The decision made by the managers of any company are made up by two very important elements to achieve success: firstly, in objective information contained in all existing material reports and by the knowledge transformed into accumulated experience; secondly, in a given higher or lower dose of the manager’s feeling, which involves an entrepreneurial and market strategy views and in its affinity or dislike to risks (a specific subject that we will not develop in this present discussion).

And now bringing the discussion to the universe of the corporative firms, I can state, with no mistake, (due to almost 30 years of experience I have had) that there are in those offices some factors that traditionally hinder this decision making process and which I will only stick to two of them, which I consider to be the most relevant ones:

The first and most representative one is the concept that almost all partners of offices have in their minds, that is: “a law office is not a company”! If we follow this reasoning and focus on a medium-size corporate office (of about 20 to 30 professionals) and we ask ourselves the following questions: what is, after all, a company that has 50 people working in it (including the staff) that has a client portfolio of around there-digit number and which has revenues of amounts that reach six/seven digits a year? The answer, in my humble opinion, is: Yes, it is a company and it is bigger than the vast majority of the Brazilian small and medium-size companies and also with all the problems and challenge of those!

The second is the intrinsic characteristic related to the attorney’s profession, in which all of them are trained for the “clash”, with strong focus on the skill to argue (verbal and writing) and in the capacity to search and find details on which they can base their arguments or weaken the arguments of their opponents. Again, in my opinion, the company’s decision which are of interest by the institution cannot be addressed this way and shall transcend the personal behaviors and can neither be based on opinions that may be in the deviations that are “out of the statistical curve” of the management data.

And, again, going back to the discussion of the elements of the decision making and concentrating ourselves in the first of them, that is, on the groundings, it is fundamental for the companies (and again the law firms) to have correct, reliable, relevant, information and obtained in a quick manner so that the uncertainty that follows all and any decision is limited only to the “feeling” that was mentioned before and not due to errors in the compiled data and information.

In order to obtain the robust, relevant and reliable management reports, it is necessary that the foundation of this building (the decision) is correctly dimensioned and built and this can be achieved with:

– a client record file with correct and relevant information for the business (not only names, addresses and contact persons).

– a record file of topics (cases, contracts, etc) with the description and characteristics defined in details, the engaged areas and professionals, etc.

– a correct record file of all the professionals, their seniority, their experiences, the charging fees and remuneration (form and amount).

– elaborated detailed budgets and the respective proposals generated (with mode of charging).

– a correct timesheet and timely filled out by all professionals and again with the relevant information of each work.

– a control and identification of all documents elaborated and involved in each work.

–  detailed information contained in the issued invoices (amounts, professionals, hours charged (or not), granted discounts, terms and payments dates, etc.

The analysis and the intelligence matching of those pieces of information may (and should) produce reports that show the scenario of the business, said scenario generated by magnetic resonance (making an analogy to the best quality of this exam in the medical diagnosis and treatment, as compared to a simple X-ray that is much less detailed and precise).

The support by an outsourced consulting firm, that is experienced and exempt from internal interactions and relationships, may really help in the generation of those pieces of information and reports and in a more effective and professional management of the companies (mainly in challenging times like the one we are living.)

José Paulo Graciotti, is consultant and founding Partner of GRACIOTTI ASSESSORIA EMPRESARIAL, engeneer by Escola Politécnica Universidade de São Paulo, with Financial MBA at FGV and specialized in Knowledge Mnagement by FGV.  Member of ILTA since 1998 (International Legal Technology Association) and ALA (Assosiation of Legal Administrators), managing Law Firms for more than 27 years in Brazil – www.graciotti.com.br.