Part 2: Leveraging Analytics to Optimize the Allocation of Department Resources

In our prior post, we answered the question of how to save time and money while strengthening vendor relationships. Here, we turn to the question: Are the resources in my department working effectively and efficiently? The answer means more than just matter management, it encompasses other aspects of in-house work and legal department management. The answer starts with analysis, then turns to considering options to reallocate work.

Analyze the work. The legal department should analyze two key elements about work:

1. Identify which parts of the organization generate the most work. Legal ops should understand where all work requests originate, whether those requests are handled internally or by outside counsel. To do so, they can use the ELM to tag each request, where the tag represents a business unit or type of work (or both). Tagging requests makes it easy to identify the volume of work by source and type. The process of tagging is typically done by the requester at the time of submission. It does take time and the legal ops team should define a rule of thumb for when to track a task. For example, it does not pay to track the task and effort to respond if that effort is less than the time to submit the request.
2. Determine the ratio of strategic issues vs. other issues. In-house counsel adds the most value when they focus on legal issues of strategic importance. To understand this, legal ops can use the ELM to track in-house effort spent (or volume of tasks) on routine matters versus high-value ones. Some legal departments also code matters and tasks on a subjective (but quantified) scale of impact or value, which can provide even more useful insight for allocation decisions.

Evaluate options to reallocate work. With this analysis, legal ops can consider different strategies to reduce cost or increase value by reallocating who does what work.

1. Consider different ways to handle certain work. For high-volume matters or non-strategic work, legal ops can consider self-service options. These include training sessions that address FAQs, portals with legal guidance (short documents or FAQs), automated systems for self-service creation of frequently used documents, expert systems that answer certain common questions, formal playbooks that guide internal clients on common questions, a collection of PDFs, or even a laminated card. Teams can point some requesters to self-service options and, for the rest, designate them as standard, urgent, or strategic.
2. Revisit the mix of work between in-house, outside counsel, and alternatives. Some legal departments use the work analysis to monitor volumes so that when a specific work type exceeds a threshold, they hire another in-house lawyer for it. Others use the analytics to disaggregate the work and assign components to lower-cost options such as automation using alternative legal service providers (ALSP), or shifting to lower-cost law firms. In general, “right sourcing” is a mindset and analytic framework to decide consciously, based on prospectively set metrics, to what resource each type of work should be allocated.