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Legal Data & Metrics

Forum: Measuring what matters most for corporate law departments

Audrey Rubin  Senior Advisor / BarkerGilmore

· 6 minute read

Audrey Rubin  Senior Advisor / BarkerGilmore

· 6 minute read

In a time of tight budgets and uncertain economies, it's more important than ever to be measuring what matters in order to assess how your law department is performing

“Data analytics” is one of the current hot phrases in business, and there may be good reason for that. Lawyers, general counsel and corporate law departments as a whole benefit from understanding their key metrics, in order to assess where they are and implement improvements to get them where they want to be.

However, in uncertain and hectic times – like now – only so much time and resources can be used to take measurements and assess results.

With budgets under rigorous scrutiny, a dearth of affordable talent and cost containment becoming a mantra, it’s important for law departments to determine what data matters most. First, department leaders must make the time to identify and measure the most impactful information.

Simply put, measuring what matters most is intended to prove your department’s value to the business. Most other divisions of any company analyze revenue, profits and their spend in a variety of categories, as well as new business, lost business, the cost and retention of talent, and diversity inclusion. The law department needs to be part of this effort, speak the same language, and prove that it is tracking according to clear, measurable targets of the same type. The general counsel who measure and prove that they are meeting defined numeric targets, and speaking the language of the business and business leaders, are the general counsel who become integral to leadership.

Additionally, measuring a few key things can really boost morale of your teams. People who understand their goals and the goals of the department are more open and productive. They suggest improvements or new approaches in order to reach a collective goal. They feel that they are working toward something specific, rather than just working. And communicating and striving for transparent, measurable goals enhances respect for the leaders pursuing such goals.

The fact is that metrics prove where we are and whether we are improving. For instance, if a company has a goal of increasing diversity by 5%, the law department should measure its diversity and work to also increase it by 5%. If the general counsel is tasked with reducing spend, a measurable goal will be assigned – it could be a spending reduction of a certain percentage or a set amount of money, but it is undoubtedly a measurable number. Understanding this aids in attaining measurable adjustments.

People who understand their goals and the goals of the department are more open and productive. They suggest improvements or new approaches in order to reach a collective goal.

How can you identify the most important metrics? Match your metrics to those of the company itself and of the C-suite. If the company wants to grow sales, the law department should prove that it shortens the time to sign sales contracts. If the company wants to improve diversity, the law department should prove that it has increased its diversity hiring, leadership, opportunities, and pipeline. If the company wants to reduce head count, the law department should assess its own headcount, its organizational structure, and the internal resources it uses. Then the law department should study a restructuring of roles and responsibilities, or determine how to rearrange work so that less full-time employees in the law department are needed. Align what you measure with the most important objectives of the company to prove that you are a key contributor.

Some of the most important measurable goals of today’s business world are geared toward talent retention, enhancing productivity, hiring for the right roles, measuring the legal team’s performance improvements via 360-degree input from the in-house clients, cost reduction, and outside counsel reviews and measuring the legal team’s performance improvements via 360-degree input from the in-house clients. Imagine if a GC was able to show the corporate board the law department’s legal spend has decreased by 10%; or its retention of diverse employees has been 100%; or it was able to reduce other vendor costs by 5%. Those statistics are powerful in proving the law department is valuable to the overall business.

Fortunately, these measurements aren’t that hard to accumulate. For example, the amount spent on legal fees is already known. Most GCs probably even know what is spent on legal fees per business line or per types of matters. Because that information is easily available, it is also easy to discuss with the department’s outside law firms in order to negotiate for cost reductions. Most law firms would be happy to keep your fees flat for a year rather than lose all your business, and keeping fees flat saves a calculable amount of money. Or, ask firms how they think the law department could be better structured in order to reduce fees.

For example, one of my clients and its firm realized, upon investigation, that time and expense could be reduced by training an expert in the company’s IT department to handle discovery responses, rather than randomly asking anyone in IT to handle these requests.

Another example is a law department I advised that educated a particular HR employee on how to search for lawyers, achieving quicker and better hires and reducing search firm fees, rather than simply assuming that anyone in the recruiting department could do excellent legal searches. The department was able to record and communicate how much money it saved on recruiting fees by investing in that particular HR colleague.

These success stories, fortunately, are not rare – they just take some initiative and collaboration.

Additionally, when a department has the ability to make a new hire, they should be sure to hire for the right roles. Just because a senior contract lawyer just left doesn’t necessarily mean there is an immediate need to hire another senior contract lawyer. Perhaps a mid-level contract lawyer can take on more responsibility, undoubtedly at a lower cost than going to market for a senior person. This is the kind of measurement that is sure to please – it saves thousands of dollars and allows a junior lawyer to develop vital skills.

If a law department doesn’t have the time or resources to embark on these types of key measurements, then it should hire a consultant for help. Believe me, the cost of hiring an expert to prove your worth and meet measurable goals is tiny compared to the progress that will be achieved and the savings that will be realized.

The bottom line is this: Data analytics is just another way of saying you can measure where you are and therefore track your improvement. Almost anything can be measured – all you need to do is figure out whether the law department and the overall company will benefit by improving these metrics. Then, it’s just a relatively simple matter of looking for easy-to-find numbers, working with your teams and figuring out ways to improve.

And most importantly, GCs should be sure to use the measurements and improvements that are achieved to make the case for their departments’ value to their corporate boards.

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