Legal spend: The right metrics with the right technology platform

21
Nov
2011

Keith Okano

While there’s no doubt that technology dashboards provide valuable insight into a law department’s business processes, it is ultimately the metrics gleaned from analyzing the data that directs a company’s general counsel toward the current desires of his CEO and his CFO.  As corporate law departments continue to emerge as a business center that contributes to corporate growth, their mantra is to improve services while controlling costs and minimizing risks.  And, there’s more to the equation than just controlling legal spend.

For today’s value-added departments, contributing to the bottom line means understanding and leveraging metrics that unlock the hidden value of an organization’s legal data.

Technology and the metrics it provides are literally changing the way savvy law departments do business.  It’s no longer enough to reduce overhead or outside counsel spend, now is the time to improve legal services both internally and externally, lower the overall cost of these services, and become strategic partners of business units.  While some use technology to streamline or automate processes, many do not yet extend the value of their technology investment to help create viable metrics that can be analyzed and used to make the information actionable.  Metrics associated with fixed fees, workflow management, project management, automatic document assembly and evaluating outside counsel spend and performance are emerging as a central theme that goes beyond just automating a legal processes; it’s changing the way legal departments work.

Metrics gleaned from dashboards and established key performance indicators (KPIs) are enabling legal staff to go beyond merely tracking both outside and inside spend. These metrics also provide the transparency necessary to demonstrate the value of the legal service being delivered by enabling legal departments to:

• provide the insight needed to drill down and make critical decisions such as what matters can be in-sourced rather than outsourced – and in the case of outsourcing, if a firm’s offer to take on certain litigation is beneficial in terms of cost and performance
• identify risk and various cost drivers and address those issues in real time
• identify key trends such as specific types of litigation and related performance
• identify when it is beneficial to spend more to protect intellectual assets
• accurately predict annual spending
• provide specific data for compliance reporting, 10K reporting, financial planning

To be effective, a law department must be strategic, and to be strategic a department must first deliver results against a pre-established game plan. The right metrics combined with the right technology platform can help align the department as a strategic asset instead of a cost liability.

However, automating processes and procedures are an important part of legal technology adoption, but it is the disruptive aspect of technology that is truly changing the way legal professionals plan and deliver legal services.