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Corporate Law Departments

In Practice Sidebar: How GCs can make the business case for tracking metrics beyond legal spend

Rose D. Ors  CEO of ClientSmart

· 5 minute read

Rose D. Ors  CEO of ClientSmart

· 5 minute read

“In God we trust, but for everyone else, bring data.”

— Michael Bloomberg

Increasingly, the corporate C-suites require that their general counsel be both the top company lawyer and a business executive. Consequently, these law school-trained leaders must now demonstrate their business and operational acumen. Even newly-minted GCs are held accountable for the “performance” of the corporate law department in helping the company meet its business objectives.

So, how can GCs demonstrate how well their law departments perform? How can they demonstrate business value? How can they mirror how other business unit leaders talk to the C-suite about their performance? The answer is through data — specifically metrics based on the department’s and company’s own data. Yet, according to Thomson Reuters 2021 State of Corporate Law Departments:

“While most law departments can articulate a range of compelling strategic goals — for example, encompassing effective legal support to the business, safeguarding the organization for the long- the term, or driving efficiency — most of the metrics departments report are related to their legal spend.”

The focus on legal spend metrics reflects how managing cost is a top priority to the C-Suite and the law department. But solely tracking spend pigeonholes the law department as a cost center rather than a business enabler. And if the objective is to demonstrate how the legal team provides better for less and can act as a true partner to help the company reach its goals, then spend metrics must be coupled with other metrics to give the whole picture of how the legal team proactively protects and enables the business.

The business case for metrics beyond spending

When designed to measure what matters to the law department and the business, metrics are a powerful performance tool that provides insights around how to choose the right people to do the right work at the right time and at the right price. Those general counsel who understand their role as business leaders can offer their legal team compelling reasons to adopt a metrics program that goes beyond tracking legal spend. Some of these key reasons include:

      • Metrics provide an objective basis for deciding how to run the department effectively and efficiently — the who, what, and how to create real business value.
      • Metrics can support the business case for hiring a broader range of talent, investing in technology, and outsourcing high-volume, low-level work.
      • Metrics can also help the law department advise the business units by spotting trends, ranging from compliance red flags to business opportunities.
      • Metrics is the language of business, and speaking the language of business increases the law department’s credibility and stature within the company it serves.

General counsel, armed with these reasons and others applicable to their law departments, should offer their legal teams a compelling case for undertaking a metrics program that tells the story of what the department does and why it matters.

Check out our In Practice interview with Dana Rao, GC of Adobe, about making the business case for tracking metrics beyond legal spend