Note: this post was compiled and edited by a team.
“Until you know what your objectives are, you can’t come up with metrics.”
So said Kris Satkunas, director of Strategic Consulting to a room full of corporate legal professionals yesterday during the CounselLink Annual Conference, they should focus first on identifying their objectives and use that information as the basis for developing key metrics for the legal department. In spite of this, she said attorneys often ask her, “What should I measure?”
Metrics, she said, are important because they provide proof that the legal department is making significant improvements to the business. They are also helpful, she added, because they can identify trends and patterns in business as well as to identify areas of inefficiency. However, she stressed, unless you can identify what goals are important to your legal department, they won’t provide much use. In other words, objectives serve as the foundational element with which to development a measurement program.
This starts by having a conversation with members of the legal department about what is important to them. She used the example of law firm panel consolidation as an objective. If that is something the legal department wants insight on, then she advised a department a metric be developed around the number of firms the department uses and the amount of legal spend that corresponds with those firms.
She also recommended separating metrics by individual legal matters (e.g. developing a metric for litigation, commercial law, intellectual property, etc.) to avoid lumping too much information together. The key is to focus the metrics so patterns can begin to emerge with respect to those individual matters.
Using Charts and Dashboards to Gain Insight
One of the most important things to think about when using charts and dashboards based on key metrics, said Ms. Satuknas, is how to best present the information to various audiences. While she admitted most corporate legal attorneys love the look and feel of dashboards, sometimes a traditional pie chart, will do just fine.
As she put it, “It’s all about understanding what the chart will be used for and who the audience is.” In other words, if the information needs to be formatted quickly or, if it is going to be used for internal operations, then a traditional reporting pie chart will likely fit the bill, versus a more detailed and time consuming dashboard.
Dashboards, on the other hand, she said, are most useful when the legal department is looking to track things visually and make comparisons that need much more detail. There are four areas according to Ms. Satuknas, where dashboards best lend themselves to the measurement process, they include:
- Key Performance Indicators (KPIs)
- Vendor Scorecards
- Risk Management Assessment
- Self-Service/Informational Purposes.
In these scenarios, a dashboard will provide the level of detail needed to analyze the data accurately and make calculated decisions based on the information (also see: 3 Outcomes of Improving Legal Department Operations).
However, cautioned Ms. Satkunas, the data contained in these charts is only as good as the information being implemented into them. This means the whole legal department needs to be disciplined about implementing information into them in a timely fashion.
4 Practical Tips Prove Business Value
Here’s a brief summary of four practical tips she offered for effectively identifying metrics and using dashboards and charts to prove the value of the legal department:
- Identify key objectives first and foremost, then develop metrics in the dashboard to support those goals.
- Don’t opt for sizzle over substance, sometimes a straightforward pie chart is the answer.
- Know your audience. Most executives like to see information laid out in a straightforward and concise format.
- Dashboards lend themselves best when making comparisons, but they can be confusing and ineffective if they contain too much information. Practice restraint, if and when possible.
Finally, Ms. Satkunas stressed that the most important part about the measurement process really begins with doing your homework at the outset. The key to communicating effectively, she said, starts by knowing what point you want to convey.
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