We continue our blog series, “In Practice", in which we look at how corporate law departments can apply the lessons learned in 2020 to their legal operations going forward
In this installment of In Practice, Rose Ors, CEO of ClientSmart, speaks with Dana Rao, Executive Vice President, General Counsel, and Corporate Secretary of Adobe, about the cascading benefits of a robust metrics program that offers an objective basis for running the department effectively, efficiently, and in alignment with strategic goals.
Rose Ors: Why is it vital for you to have a law department metrics program that tracks more than legal spend?
Dana Rao: Spend metrics alone are not a very interesting or fruitful conversation to have with your CEO when you want to communicate the law department’s strategic value or make the business case for increasing headcount, or investing in technology and other key focus areas. If you go into the CEO’s office and talk about how much the law department spends, the CEO’s questions will be around why we don’t spend less. That’s not a productive discussion if you are trying to demonstrate you are a value center and not just a cost center.
At Adobe, we make business decisions based on a data-driven operating model. We leveraged that model to incorporate metrics into our own decision-making process, and through that we’ve been able to maximize our efficiency, more effectively evaluate how we do our work, and identify key areas of opportunity for the business at large.
Rose Ors: When and how did the law department go about launching its metrics program?
Dana Rao: We started the process about two years ago when I made the business case to my legal team about why the metrics program mattered. Our pitch to them was that the right metrics would help us get the resources we needed in order to perform our jobs in service to the company. Everyone immediately understood it would be a weak argument if I went to the CEO saying that the department needed to hire more people because the overall number of people in this company has gone up. They knew that our engineer-educated CEO would not be persuaded. What would convince him, however, was to show him meaningful trends and insights derived from our data. The team agreed — not without some reluctance — that we needed to up our game.
For more, check out Sidebar: How GCs can make the business case for tracking metrics beyond legal spend here
I then asked my direct reports to identify the things that demonstrated that what we did mattered — the why, what, and how. They spent a year collecting data, analyzing the impact of their work in adding business value, and then we decided on the metrics that got to the heart of the value equation.
Rose Ors: What were the key questions you and the team asked during the process of identifying what matters?
Dana Rao: There were several overarching questions, such as: How do we determine if we are focused on doing the most important work? How do we spot critical trends? What metrics do we launch to align our work with business objectives and communicate that alignment to the C-suite and other business leaders?
Rose Ors: Did you also talk to the business units to align your metrics to theirs?
Dana Rao: Our metrics are different than their metrics, and taking them in combination can give us important insights. For example, the sales team for each of our three business units tracks the number of contracts they create. We track the number of legal-assisted contracts. Only the latter matters to us because we need to know if the percentage of contracts generated yearly and the percentage of legal-assisted contracts are going up together linearly. If the trend is going up linearly, our internal costs increase when instead we want these costs to be flat or go down. In that case, we need to consider drafting better playbooks, deal thresholds, and automation to design a class of self-service contracts to reduce the number of legal-assisted contracts. The answer can’t just be to add lawyers whenever the number of deals goes up.
Rose Ors: Who on your team was responsible for data collection?
Dana Rao: It was a team effort led by the heads of each of our practice groups and one “metrics czar” from each of these groups. Each metrics czar was a person with subject-matter expertise who was comfortable with numbers and systems. The czars worked closely with our operations team, who were the hub on this initiative. In the beginning, I attended all the meetings where the team was selecting our metrics but stepped back when the team moved to data collection.
Rose Ors: Did the law department have a ticket-based system that tracked the work coming in and going out of the department before you began data collection?
Dana Rao: We’ve never had a ticket-based system. We have historically tracked the inbound-outbound workflow via individual database systems for items like contracts, patents, customer relations management, etc. Having these systems greatly facilitated the collection process, and over the course of this project, we’ve actually implemented a new tool to make that process easier for other teams like HR and Compliance.
Rose Ors: What other metrics do you use to drive strategic conversations with the business?
Dana Rao: We are focused on using hard data-driven analysis to show the underlying truths of our business. For example, like many other companies, investing in artificial intelligence capabilities is critically important to us. So, our patent team tracks the number of AI patent products they file in conjunction with the engineers from our three business units in a given period. We can then see whether the filings trend up or down from target, have conversations with the business units about these trends, and determine specific areas of the business where we want to drive more innovation.
Another example is on our Government Relations team, which falls within our Legal department. Since the implementation of our metrics program, Government Relations has been tracking what they spend their time pursuing. They document the meetings they have with government officials, the nature of those meetings, and their outcomes. Their efforts have resulted in initiatives like supporting governments’ digital transformation, affecting COVID-19 policies, and furthering public sector opportunities for Adobe.
Their metrics are shared with the C-Suite, and in one instance, the data prompted our CEO to ask the team to meet with the head of sales to discuss improving public sector engagements in various regions to increase company revenue.
Rose Ors: What are the meaningful shifts in how the law department engages with the business?
Dana Rao: We are far more proactive, impactful, and visible. Because of our metrics, the C-Suite and unit leaders have a much better understanding as to what we do and the value we add. With the help of these metrics, we are no longer a back-office risk mitigation unit — we are their strategic partners.
Rose Ors: You are now demonstrating your value story in the language they understand.
Dana Rao: Exactly. Once you move from spend and operational efficiency metrics, you can focus conversations on how the law department helps the business achieve its strategic objectives. Data is the language business leaders trust.