This is the second installment of a series detailing thefive disciplines at the core of an effective data metrics programfor claims litigation organizations.

In the first article in this series, I explained whymetrics are so crucial to any claims litigation program anddetailed the reasons why the first discipline, support from seniormanagement, is absolutely necessary for success. Now I'd like tofocus on the next two disciplines at the heart of an effectivelitigation program – business intelligence and commitment tomaintaining data integrity.

Business intelligence

Business intelligence (BI) is a technology-based process foranalyzing large amounts of data, shared via reports, dashboards andvisualizations, to inform decision-making and evaluate performance.Effective use of BI is the single most important element indeveloping a strong data-driven claims litigation organization.

To generate BI for a claims department, you need:

• Digitally captured claims information — the more informationper claim, the better
• E-billing information from electronic invoices
• An enterprise-quality reporting tool capable of combining claimand invoice information

With these in place, all claims information can be combined withrespective invoice information, making claim details readilyavailable for reporting. The focus should be on managing cost, lossand case inventory, all of which are based entirely on someonedoing (or not doing) something. BI gives you transparency into allactivity conducted by outside counsel, allowing you to carefullymanage that activity.

Using these tools and data, you can display, for example, allactivity of every law firm, lawyer, paralegal and support person,broken out by claim or a group of claims. Days worked, time billed,experience level of timekeepers, legal rates, work productgenerated and other data points are all immediately available.

Related: How to bring decades of data into the21^st century

(Photo: iStock) 

Data Integrity

In order for you to be confident in the results you get fromyour BI tools, you must be certain that you maintain data integrity, meaning that all information inthe database is accurate and consistent. To ensure data integrity,you need well defined data fields, accurate data and data that istimely and consistently entered.

Data field definitions are absolutely crucial, even in caseswhere they may seem self-explanatory. For example, if litigatedclaims are counted for a report, what is the definition of alitigated claim? When reporting on legal fees, does the reportedfigure reflect paid fees, fees approved for payment but awaitingprocessing, fees submitted but not approved, or some other categoryof fees?

These types of definition questions don't have universallycorrect answers, but whatever definition your organization decideson, it must be consistently applied across all claims and must becommunicated to users so that they record data accurately andpromptly.

Related: 5 steps to building and sustaining a culture ofinnovation

When deciding what data you should collect, invoice informationis fairly easy because the e-billing process makes every invoiceand line item detail available. But the decision is more complexfor claims-related fields. Keep the following guidelines inmind:

• Capture the data reflected in existingreports. It is fair to assume that historical informationserves a purpose. The goal is to improve and build on what exists,not start from scratch.
• Capture the data that is often needed, but sometimesunavailable. This information is generally found inoptional fields. Consider making those fields mandatory for atleast some segments of claims.
• Capture the data by which you want to segmentreports. Segmenting means grouping objects together thatshare a common characteristic, such as claims designated as"serious." Generally, any characteristic critical to segmentationshould be a mandatory data field.

Segmentation is extremely important to using your claims data togain insights and inform decisions.

In the next installment of this series I will explain whysegmentation is so central to any metrics program and how tosegment data intended for specific audiences and purposes.

As director of decision support services at Wolters Kluwer's ELM Solutions, BillSowinski leads an expert team in the design of legal spend analysesand benchmarking disciplines. He works with clients to structureand evaluate their legal data, helping to develop and deploystrategies that improve legal and claims departmentperformance.