Dec. 4, 2019 – Attorney and technology guru Jeff Krause says the “Moneyball” concept can help law firms see things differently, with data, and improve profitability.
Moneyball, based on a true story (book and film), describes a strategy employed by the Oakland Athletics Baseball Club in the early 2000s. A mid-market team with a limited budget, A’s general manager Billy Beane devised a new strategy: use stats to assess player value, such as on-base percentage, departing from traditional scouting methods.
Instead of big name players like Jason Giambi and Johnny Damon, who left the A’s for high priced contracts, Beane assembled a team of players based on data, at lower cost. The A’s went on to clinch the division title, and changed the business of baseball.
Krause, a technology consultant at Affinity Consulting Group, uses that Moneyball concept to highlight opportunities for solo and small firms.
Many firms may be looking at surface numbers, such as revenue and expenses, without understanding how a deeper data analysis can help them be more profitable.
“The concept grew out of baseball, but it’s about business,” Krause said. “It’s about business because it’s about using data to make smart choices and smart decisions about your business. And in many cases, it’s about looking at data in different way.”
Krause said numbers tell a story, and they don’t lie. When you are thinking in Moneyball terms, you make decisions by diving deeper. “You have to find out what those numbers are, and sometimes we don’t really know,” Krause said.
For instance, most solo and small firm lawyers have a general idea of the firm’s bottom line, the amount of profit. “What they don’t really know is what goes into that. How you get there. That’s Moneyball,” Krause said.
Krause examines how law firms arrive at the bottom line, and it comes down to five things, including generating client leads and conversion rates.
“I have a number of things going at any given time to generate more leads and a number of things going to convert. It keeps me focused on what I need to do,” Krause said. “It’s a simple concept, but it’s a different way of looking at things.”
Krause, a featured speaker at the State Bar of Wisconsin PINNACLE's 2019 Wisconsin Solo and Small Firm Conference in October, said once you have the right data sets, you can create strategies to improve in the areas you may not think enough about, such as realized billing or collection.
“It’s a different way to take action on numbers and not just wish for more clients, more revenue, and more profitability,” he said. “Those don’t happen in a vacuum.”
