SPONSORED SECTION
What Story Will Your Metrics Tell? By Samantha Green
40
I
n our metrics-driven society, law firms turn to data for a quantitative way to demonstrate business value. These tangible proof points provide a high-level view of your team’s capabilities, capacity and contributions. But metrics tell us far more than the numbers. They help legal teams uncover critical opportunities for in-house and external spend management as well as long-term structural
efficiencies and growth. They also help you recognize unmet needs, initiating a smarter redistribution of work across inhouse and outside counsel. It’s important to remember, however, that metrics don’t perfectly measure the human element that plays such a crucial role in strong attorney-client relationships. The need for analytics was spurred by the 2008 financial crisis. Legal spend was
seen as overhead and a necessary evil. To better manage expenses, corporate clients became laser-focused on cutting costs for their organization’s legal services. This triggered the rise of flat fees for outside counsel, where metrics were used to determine if these arrangements made sense financially and generated the best work. In-house teams also used metrics to reassess how they were using outside counsel. The results often led to a greater emphasis on building up internal expertise to deliver better value to their company and clients in a more cost-efficient way. Today, the use of metrics continues to evolve as legal teams rely on them to prove their business contributions, maximize resources and get the most value for their legal spend. By defining key performance indicators (KPIs) and mapping them back to concrete goals and objectives, we can spot shortcomings and drive performance and client satisfaction. While KPIs will vary by organization and goals, these are some common criteria legal departments measure: Spend In-house teams must take a good look at their own effectiveness in addition to what is spent on services by outside counsel. Running regular analytics on budget identifies areas where you may be able to cut costs or reallocate resources, and helps you gauge how your outside counsel is performing. It is also helpful to track spending by matter type, as some matters require more money and manpower. Rather than guessing, you’ll know what budget is necessary. Additionally, by monitoring your budget over time, you’ll be able to make incremental changes and report progress. Workload How much work do your attorneys have on their plates at a time? How long does it take to complete a case? What is being handled in-house and what’s being outsourced? Metrics uncover answers to these questions. They help companies identify ways to optimize their in-house