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Business Intelligence (BI) has introduced a new paradigm in legal department management. And the use of BI should be a routine discipline integrated within every corporate law department. That’s according to a new white paper from Wolters Kluwer’s ELM Solutions, titled “Metrics Maturity for Corporate Legal Departments: Five Key Disciplines for Creating Excellent Metrics.”
Wolters Kluwer defines BI as a “technology-based process used to analyze large amounts of data to derive information useful for decision-making, prompting the most appropriate action at all levels of an organization, from executives to operations managers. BI is shared by means of reports, dashboards, and visualizations. BI tools are also used to measure the effectiveness of an organization’s data driven strategies and to identify individuals who are the most or least successful in driving results.”
Having the ability to generate good information does not, however, automatically translate into improved management, Wolters Kluwer experts argue. “To truly leverage the power of BI, it is essential that correct and complete data is carefully captured, including matter descriptive elements that support the strategic segmentation of matter types and characteristics,” the white paper notes. “Then, the available information needs to be carefully analyzed and segmented to address those portions of the law department inventory that generates the most risk or highest cost. Individual performance in the execution of strategic initiatives must be measured in order to ensure improved results. And, finally, senior management needs to drive these disciplines and make resources available to create the information and analytics that generate best-in-class results.”
All corporate legal departments or self-insureds have huge amounts of information about their legal matters. That information represents an enormous opportunity to improve legal management if captured carefully and applied strategically. “Too often, that vast information is either ignored, not captured, or if captured, composed of imperfect data which then generates sub-optimal reports. Worse yet, this wealth of information is too often used to show results as opposed to drive results,” Wolters Kluwer adds. “Just as not all data is created equal, not all metrics are created equal. Metrics generation and analysis needs to be a serious and disciplined process, or those metrics will drive less than optimal results.”
Wolters Kluwer highlights five essential disciplines are needed to generate excellent metrics that will continuously improve legal management. These are access to BI; a commitment to data integrity; effective use of segmented data; aggressive use of five types of reports and senior management buy-in and support.
The effective use of Business Intelligence (BI) is the single most important element in developing a “superb data-driven legal department”, the white paper argues. “The main areas of focus should be the management of cost, loss (if litigation), and matter inventory…BI provides complete transparency into all activity of all outside resources retained by the client, allowing tight management over that activity.”
The second noted metric is a commitment to data integrity, with the company noting three controls that must be in place to ensure data integrity. Firstly every data field used to generate information must be well defined. Secondly, the data populating a data field must be accurate and it must fit the definition. Finally, the data must be consistently entered when available. Arguably, organizations that fail to embrace good definition discipline squander the opportunity to have excellent BI.
Segmentation, meanwhile, deals with the effective use of that information. For example, law suits involving intellectual property are different from breach of contract matters, which are different from product liability injury cases, which are different from government subpoena matters. “Each of those groups of matter is handled differently, often using different disposition strategies and different lawyers with expertise in those disparate areas. The costs and results associated with each segment are likewise evaluated differently,” the white paper adds.
The fourth discipline noted by Wolters Kluwer is the aggressive use of reports, with the company urging firms to consider report categorization. This “helps identify the purpose of and the most appropriate recipients for each report. The categories included in this guide are not etched in stone, but, if adopted, can greatly assist in effectively designing, using, and understanding reports.”
In the white paper the company analyses outcome reports, performance reports, exception reports, combined reports and analytic reports. None of the above disciplines will pay significant dividends without effective implementation and senior management buy-in and support. “Senior management needs to demonstrate its conviction that the use of metrics enhances performance and is an integral part of the department’s culture and performance evaluation,” Wolters Kluwer notes. “Senior management needs to ensure that the appropriate resources are dedicated to generating, enhancing, and maintaining metrics and to assure that appropriate change management techniques are applied as required.
Furthermore, the required resources must integrate analytical skills, management experience, knowledge of the legal process, and report development skills, the white paper continues. “Finally, to assure compliance and to enhance the likelihood of success, the formal HR performance evaluations of in-house personnel, lawyers, directors, and senior management should include results compared against performance metrics. The old saying is true: what gets measured gets managed. If metrics are formalized into performance evaluations, improved performance will result.”
Wolters Kluwer’s ELM Solutions provides enterprise software solutions that facilitate workflow and collaboration across the legal community. Earlier this year Corporate Vision magazine bestowed its Best Enterprise Legal Management Platform Award upon Wolters Kluwer’s ELM Solutions. This is the second consecutive year that Wolters Kluwer has triumphed in the magazine’s Technology Innovator Awards series that celebrates excellence and innovation in technology.
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