Times are changing for law departments. Increasingly, companies view them as a cost centre that must demonstrate value and justify expenditures. This makes it crucial to have a systematic approach that shows that a law department’s use of resources is delivering results. With the department’s budget and headcount on the line, law department leaders must have the data and metrics that prove their organisations provide value.
If analytics are a necessity, how should a law department without them proceed? The first step is to take a step back: rather than rush headlong into mapping out an analytics process, stakeholders need to reach a shared understanding about analytics. Organisations must measure what matters, and therefore, metrics must tie into departmental strategy and goals. That strategy and those goals must, in turn, reflect leadership’s vision of the law department’s purpose and mission. If those five elements –vision, mission, purpose, strategy, and goals – do not link together, it is impossible to determine the right metrics to use to show how a company benefits from its law department.
This crucial first step is part of Elevate’s six-part methodology when working with customers on using data, metrics, and analytics. First, we work to define the appropriate metrics. Next, we establish the means necessary to capture the data and information in question. After that comes the work of measuring results and then analysing them. Finally, an organisation must continue to monitor its metrics and improve–both what it does to deliver value and its analytics process.
When it comes to the first step–developing suitable metrics–those involved should all understand that metrics share four qualities. First, they are objective (subjective measures prevent coherent analysis). Second, useful metrics are measurable and normalised (otherwise, apples-to-apples comparisons are not possible). Third, they are targetable and linked to clearly defined goals (if they are not, they cannot provide enough information to be useful). Finally, and crucially, they support active decision-making (because that is how a metric helps drive value).
Armed with this understanding, developing metrics centers around ‘the why’. Every metric must serve a purpose that matters for assessing value and optimising operations. Using an agile process, the law department should gather feedback on what metrics matter to whom and why. Then, as the department begins to zero in on specific metrics, it should obtain more feedback and refine its metrics as appropriate. Once that is complete, the other steps–data capture, measurement, analysis, monitoring, and improvement–can proceed.
As things go forward, potential roadblocks lurk along the way. Sometimes, there is a lack of clarity concerning goals and objectives. Other times, issues arise concerning the availability and quality of data. Almost always, a critical factor is the ability of department leaders to drive the cultural change necessary to integrate analytics into how the organisation operates. Finally, those involved can fall into the trap of “thinking more is better,” whereby an organisation seeks more information or uses more metrics than are necessary to best and most efficiently measure value and guide change. Staying alert for these pitfalls will go a long way to avoiding them.
The scrutiny of law departments by senior management will only intensify in the coming years. With that in mind, data, metrics, and analytics are no longer a luxury but rather essential to a law department delivering –and proving that it is doing so.