The recent conference that provided snapshots into the evolution of corporate legal operations maturity – also provided a glimpse into metrics and measurement.
It’s important to note, as the CounselLink consulting team is quick to point out, legal departments metrics may vary based on the unique needs of a given company or industry.
Sometimes legal departments fall into the habit of adopting metrics that another company is using and while this may produce interesting metrics, they are not necessarily tied to your company objectives, according to Kris Satkunas. The key is to find out what’s really important, she says.
Here are the metrics some legal department operations leaders said they were looking at during the conference:
1. Plans for law firm scorecards
One legal department is looking to the future with plans for a law firm scorecard and an objective means of evaluating outside counsel, according to a legal operations manager at a biopharmaceutical company. The department plans to look more closely at efficiency and total cost weighed against hours which will also be broken down by staffing partner versus associate.
Also since much of the organization’s work is contract-based, she said, another goal “is to shorten the work to contract time.” Client satisfaction and total cost per hour from in-house attorneys versus outside counsel are other areas of focus, she added.
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2. Diversity and client communications matter
“In terms of staffing, we measure based on diversity,” according to a senior executive who leads legal operations support for a financial institution. “We measure firms in terms of how diverse they are, and we measure diversity of individuals within those firms.”
Diversity seems to becoming an increased area of focus for corporate counsel both internally and externally. For example, diversity was measured for the first time in the 2015 CLO Survey conducted by the ACC and one general counsel recently told Bloomberg Big Law Business his company “has made significant progress, and he’d like to see the law firms he works with do a better job keeping up.”
For the financial institution at this conference, client communication was also an important area of measurement. This company’s legal department measures firms on how well it communicates with the legal department and they ask their law firm partners to measure the legal department on that too.
“We ask the firms we work with to measure us in terms of how well we are communicating and provide input on that,” he said. “We also measure firms on how well they perform on matters and how often they collaborated with the legal team.”
3. Value of relationships
It’s not just numbers that metrics can measure. As D. Casey Flaherty pointed out previously on these pages, metrics strengthen inside and outside counsel relationships. At the conference a legal operations director for a communications company described it this way:
“We want to see the value of the relationship represented by more than just the quality and the cost of the relationship. We also want to know what we are getting from the relationship. So, we measure firms on providing continued legal education to their staff and we factor in that value proposition on our end by doing the reverse, sending our attorneys back to the law firm so they can see what the issues look like in that environment.”
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What wasn’t recorded during this discussion is equally as important as what was said: the references to “cost” were few and far between. Therein may be the common denominator on the myriad of metrics – legal departments are focused on value.
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Photo credit: Flickr, Philadelphia Night Skyline, Chris Hunkeler (CC BY 2.0)