You Can’t Manage What You Don’t Measure.
“You can’t manage what you don’t measure”
….so said a General Counsel in a recent discussion we had about the use of data in their legal department.
Better use of data should be a continuous improvement goal for every General Counsel and their wider legal team. Increasingly, we are talking to our General Counsel customers about the importance of data and how one can go about using it more effectively.
Firstly, some context for the data drive. The ongoing fallout from Covid-19 is that the “efficiency” imperative is being pushed more than ever. The digital transformation of most businesses is now also well underway, with remote working and more dispersed teams commonplace. Many General Counsels are looking at how they can future proof their department, to make it more resilient and responsive to the business needs. To guide these decisions, they need information that only quantitative analyses can provide.
Legal has generally been slow to ‘adopt’ data. Lawyers traditionally refer to experience and/or precedent and many decisions are taken based on qualitative rather than quantitative inputs; lawyers generally prefer to look at the world through words rather than numbers and sometimes are reluctant to explore or even acknowledge the depth of data points that exist within the legal function. This reluctance, however, leaves lawyers disadvantaged compared to business teams; reliant on a limited supply of unstructured information on which to inform their decisions.
Why is a grasp of data important?
A grasp of data enables the legal department to speak the same language as the business teams and even to operate as more of a business-like unit. With it, a General Counsel can describe the team’s activity and measure its contribution to the business - the way the sales or marketing directors would. It can be used to anticipate future needs and justify investment, all in a way that the business can understand.
Having quality data at your fingertips can promote faster, more informed decision-making and can help to identify, predict and manage risk. It can provide greater insight into how time and money are spent to steer efficiency initiatives and continuous improvement and can also play a part in talent retention by optimising work allocation and tracking job satisfaction.
What can data be used for?
Short answer: whatever you want. You can measure the type of work that your team engages in and where it originates; how much time is spent on strategic activity vs day to day processes like customer contracts or NDAs. With contracts, you can also look at the contracting process itself or the underlying value or risk, by building up a picture of things such as exposure to contractual indemnities and liability thresholds or limitations; this can be used to develop triage or allocation systems. You can track your external legal spend vs use vs response vs value, which can help you make better decisions about what work is allocated externally vs retained by the team. You might use it to track litigation and better predict outcomes or manage IP portfolios. It’s down to the individual and whatever he or she finds useful to support or guide decision-making.
How do you get started?
Before looking at some examples, it’s worth highlighting that this process often involves a mindset shift, both of the General Counsel as well as team members, so be thoughtful about change management and obtain buy-in from your team by ensuring they understand the objectives and impact on them.
To begin, ask yourself what you want to measure and why – what is the insight it can provide? Then you can move on to looking at the related activities or processes to identify the relevant data or, if no data exists, how you might generate or capture it.
Some straightforward “quick win” examples include:
- An analysis of the customer contracting process. It should be quite straightforward to take some basic measurements such as the number of days it takes to close, legal team turn-around time and input in hours and the underlying value of the contract. From just those basic data points you can start to build up a more detailed picture of the overall contracting process which could help inform whether there are opportunities to speed that up. Or, you might want to test whether senior team members are spending too much time on lower value contracts. If you want to go a bit deeper, you could gather data on which agreements or specific clauses are most frequently negotiated and time intensive.
- Satisfaction levels of the business team. Its slightly more abstract but a periodic assessment of your department on a scale of 1-5 and/or for specific aspects of the service they provide would be a start. That alone, over time could be useful in terms of measuring the impact of changes to the team or helping to identify improvements that legal can make to have a tangible impact on the business.
- Tracking legal spend and external service provider efficiency. An obvious one but with a growing range of external options, closer monitoring over who does what, time and cost can help General Counsels manage spend and better allocate budget throughout the financial period.
Don’t be put off by what you perceive as a lack of the right tools as you can make significant progress without anything particularly sophisticated - although requiring manual input, spreadsheets can be effective for storing and analysing your data. Be content to start small and be prepared to experiment and change. Pay attention to the quality of the data. It is also worth speaking to your IT team or any data analysts to explore whether there are existing business tools that the legal department could adopt (hint: there usually are).
Over time you can expand to specific tools or AI to help gather and present data in a way that makes sense to you and the needs of your business partners. If budget allows, consider external help from legal operations specialists, or bring someone in to carry out that role.
In the digitised world that we live and work in, legal departments will be forced to acknowledge the role data plays in management and decision-making and so being comfortable handling and interpreting data will very soon become an essential skill. If you haven’t started out on this development journey yet, make it a priority now. Start with small steps and test and learn; you will be surprised at how much data you already have access to and the insights it can give you.
Aug 27, 2020