Data-Driven Law Firm, Financial Performance and Growth
We recently discussed the elements of a data-driven law firm and what Stephen Butler, CEO of Red Rain and developer of the RedView suite of applications, is observing among the firms he works with regarding financial performance and growth.
Financial Performance
Performance Trends and Uptick in BI Tool Activity
Butler noted that RedView’s clients are generally growing or maintaining performance, with no observed downturn. From a Business Intelligence (BI) perspective, there has been a marked increase in client activity with RedView’s solutions over the last six months. He also mentioned that the company has seen an uptick in introducing BI capabilities to new law firm clients, which is positive and seems to be an emerging trend among law firms that are becoming more focused on data and performance.
Increased Performance Visibility
He also noted that while they have around 1,000 users per month viewing their dashboards, the average number of accesses per user per month has grown significantly, from 14 in the first six months of 2025 to 25 in the last six months of the year—almost an 80% increase. The exact cause of this increased usage was unclear, but it suggested that clients may be developing a habit of relying on data for decision-making.
Law Firms’ Attention to Performance Data
His most significant observation, however, is how little attention most firms pay to performance data, despite their intentions to be more productive, improve profitability, and improve cash flow.
WIP Lockup Days and Lack of Budgets
He cited an example of a firm whose lockup days stood at 65. This is the period between when work is done and when the invoice is raised. Focusing solely on improving this metric will significantly strengthen the firm’s cash position. He also noted that many clients lack clearly defined staff budgets, making it difficult to monitor performance for both the firm and the fee earner. He suggested that the challenge lies in law firm practitioners’ ability to manage their businesses financially.
Top Tips for Practice Transformation: Focus on Financial Metrics
When asked for top tips for transforming a practice, Butler emphasised the need to “get serious” about it, using systems such as RedView’s BI tool to inform assessment and action. He also suggested that firms often acquire technology and assume that this alone is sufficient, whereas “good clients” actively utilise the solutions implemented.
He cited the example of a client with an average debtor day (the time between the invoice being raised and cash being received) of 60, costing them $120,000 in interest per year. To illustrate the financial impact of poor processes, improving debtor days to even 30 would save this practice $60,000 annually.
Case Study of a High-Performing Client
A UK firm of approximately 90 people was highlighted as one of RedView’s most active and effective users. The firm’s financial controller is committed to maximising the use of the RedView solution and was a finalist for an industry award for performance improvement, with the BI tool as a significant component of the submission.
Growth
Law Firm Growth Strategies and Digital Marketing
Butler noted that progressive firms are investing more in digital marketing, while most still rely on referrals, word-of-mouth recommendations, and their websites. In digital marketing, clients are increasingly using Google Ads and Meta (Facebook) page integrations to generate and track leads.
Sophisticated Marketing and CRM Usage Case Study
A Brisbane-based client is particularly progressive in this area, building and promoting their website as a legal knowledge base with extensive articles written by their lawyers. This firm has integrated its website’s numerous “Contact Us,” “More Information,” and “Feedback” forms with RedView’s API to log the interaction, merge it into attractive email templates using an EDM solution, and send immediate, conditional response packs to the contact and then RedView generates reminders and follow-ups. This client also engages in traditional marketing, such as billboards, and secures strong PR, including television interviews with lawyers, all of which drive interested parties to their website.
Measurable Growth and High-Performance Metrics
He confirmed that this firm tracks these activities through the CRM dashboard to assess ROI. Since their engagement four years ago, the firm has grown from 50 to 80 people, a significant increase in headcount. In the last 12 months, they have achieved 15% growth in fees and 12% growth in the number of new matters. At the same time, they have maintained an impressive debtor days figure of 15, just outside their trading terms of 14.
RedView’s Value Proposition and Practice Management System Integrations
Butler explained that RedView’s strategy is to add value to existing practice management systems (PMS) by providing features such as management reporting and business development, which PMS platforms typically prioritise less than time recording and case management. His view is that PMS providers often focus R&D on mandatory or high-demand areas like AML, AI, and jurisdictional issues, leaving gaps in business management expertise.
Specific Value Adds through Integrations
RedView’s BI and CRM tools are designed to integrate as “best of breed” solutions alongside PMS platforms. He talked about examples of how RedView complements specific PMS platforms, such as adding staff budgeting and performance tracking to Smokeball and providing extensive functionality where Affinity, a client-server solution, may lack the capabilities. The current integrations include LEAP, Affinity, Smokeball, Actionstep, PracticeEvolve, Aderant, and Inprotech. Other integrations exist with legacy solutions such as OpenPractice and Infinitylaw.
Absence of Holistic Data-Driven Law Firms
RedView can present combined CRM, BI, and task management data on a single dashboard, creating a holistic overview; however, no clients utilise this functionality. LPI observed that there seems to be a fragmented, non-data-driven approach in the sector. Butler pointed out that RedView primarily serves the small- to medium-sized market, where business management expertise is often lower.
Role-Based Permissions and Key Metrics
RedView’s dashboards feature role-based permissions, allowing different groups, such as practice managers or legal secretaries, to see different information. A critical feature is the ability to prevent lawyers from seeing their peers’ statistics, a trend observed in 95% of their client firms, often because targets are linked to salary.
Fostering a Data-Driven Law Firm Business Approach
The key lessons learnt from more than 100 implementations were:
C-suite commitment. Partners and management teams need to support data-driven business decisions through ongoing conversations and review, and by advancing data-driven initiatives.
Build internal enthusiasm. Championing a data-driven culture with team member participation and buy-in is critical. Celebrate achievements and milestones, and recognise those whose efforts are paying off to motivate the wider team.
Repeat and refine. Data collection, management, and communication are an iterative process. Invite others to share their experiences and thoughts to help engage your team members in developing a data-driven performance culture.
Reward. Clearly define targets in line with your business. Reward achievement and make it visible.
The Distraction of AI and Neglecting the Business of Law
Butler stated that law firms face competing priorities and that focus has shifted to Artificial Intelligence (AI) in the “practice of law” rather than the “business of law.”
He noted that low-hanging fruit for improving law firms’ performance is being overlooked and that there is an opportunity for firms to investigate AI benefits while simultaneously addressing aspects of the business of law, as the two are not mutually exclusive.
Stephen Butler, CEO of Red Rain
Stephen has been providing software solutions for professional service firms for 30 years, including more than 25 years with law firms. He has an extensive background in software operations, professional services sales, and marketing leadership.
Contact Stephen to discuss your plans to improve the business aspects of your practice. He will share his extensive law firm experience working with partners and the C-suite to transition their practices, driving growth and increased profitability.
About Red Rain
Red Rain provides systems consulting and software development for the legal profession. It develops RedView, the legal system used by over 1,000 lawyers and their clients.
