This is the second installment of a series detailing the five disciplines at the core of an effective data metrics program for claims litigation organizations.
In the first article in this series, I explained why metrics are so crucial to any claims litigation program and detailed the reasons why the first discipline, support from senior management, is absolutely necessary for success. Now I'd like to focus on the next two disciplines at the heart of an effective litigation program – business intelligence and commitment to maintaining data integrity.
|Business intelligence
Business intelligence (BI) is a technology-based process for analyzing large amounts of data, shared via reports, dashboards and visualizations, to inform decision-making and evaluate performance. Effective use of BI is the single most important element in developing a strong data-driven claims litigation organization.
To generate BI for a claims department, you need:
- Digitally captured claims information — the more information per claim, the better
- E-billing information from electronic invoices
- An enterprise-quality reporting tool capable of combining claim and invoice information
With these in place, all claims information can be combined with respective invoice information, making claim details readily available for reporting. The focus should be on managing cost, loss and case inventory, all of which are based entirely on someone doing (or not doing) something. BI gives you transparency into all activity conducted by outside counsel, allowing you to carefully manage that activity.
Using these tools and data, you can display, for example, all activity 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 product generated and other data points are all immediately available.
(Photo: iStock)
|Data Integrity
In order for you to be confident in the results you get from your BI tools, you must be certain that you maintain data integrity, meaning that all information in the database is accurate and consistent. To ensure data integrity, you need well defined data fields, accurate data and data that is timely and consistently entered.
Data field definitions are absolutely crucial, even in cases where they may seem self-explanatory. For example, if litigated claims are counted for a report, what is the definition of a litigated claim? When reporting on legal fees, does the reported figure reflect paid fees, fees approved for payment but awaiting processing, fees submitted but not approved, or some other category of fees?
These types of definition questions don't have universally correct answers, but whatever definition your organization decides on, it must be consistently applied across all claims and must be communicated to users so that they record data accurately and promptly.
When deciding what data you should collect, invoice information is fairly easy because the e-billing process makes every invoice and line item detail available. But the decision is more complex for claims-related fields. Keep the following guidelines in mind:
- Capture the data reflected in existing reports. It is fair to assume that historical information serves a purpose. The goal is to improve and build on what exists, not start from scratch.
- Capture the data that is often needed, but sometimes unavailable. This information is generally found in optional fields. Consider making those fields mandatory for at least some segments of claims.
- Capture the data by which you want to segment reports. Segmenting means grouping objects together that share a common characteristic, such as claims designated as "serious." Generally, any characteristic critical to segmentation should be a mandatory data field.
Segmentation is extremely important to using your claims data to gain insights and inform decisions.
In the next installment of this series I will explain why segmentation is so central to any metrics program and how to segment data intended for specific audiences and purposes.
As director of decision support services at Wolters Kluwer's ELM Solutions, Bill Sowinski leads an expert team in the design of legal spend analyses and benchmarking disciplines. He works with clients to structure and evaluate their legal data, helping to develop and deploy strategies that improve legal and claims department performance.
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