Eyal Iffergan of Epiq Global explores how in-house legal teams can use and manage data effectively in order to support their business's strategy and inform key decision-making.
Hyperion Research’s benchmarking data from 2022 shows that 63% of corporate legal departments have formal metrics and analytics programs (https://insights.hgpresearch.com/legalops-benchmark-metrics). However, only 9% describe their metrics as well-defined, curated and easily accessible with audience-specific dashboards.
With general counsels (GCs) under pressure to provide real-time insight and movement towards achieving organisational goals, a well-organised and clear approach to using data can create efficiency and provide a clear picture of where attention needs to be focused, both now and in the future. Good data collection and presentation can also help to engage the wider business in the work that the legal department is doing, demonstrating return on investment (ROI) through effective metrics and data-backed storytelling.
Identifying the relevant data
The first step for GCs to consider when building a metrics programme is to identify what data the business already has access to. Financial, operational and service performance data and risk management measures will be helpful for benchmarking the department and creating measures and metrics. By fully understanding how accessible, accurate and complete these data sources are, it will be possible to establish goals and metrics for the business. Piloting the approach with a relatively small number of metrics relative to a specific baseline or a target will help to show whether the business is improving or on the right course.
Setting objectives
The next step for GCs is to define key performance indicators (KPIs) for the business, which should be balanced across four objectives:
Financial control.
Outcomes and risk management.
Operational efficiency.
Service optimisation and quality.
When evaluating potential KPIs, GCs should use an impact-to-effort matrix in order to build a metrics programme around the most valuable data. For a legal department, data on areas such as the most and least litigated contracts and litigation ROI, that is, cost versus exposure, can help to inform future strategies and trends in dispute resolution. Data can also help to predict costs much more accurately. In addition to internal data, GCs may also wish to track judgments in order to establish a clear picture of likely litigation outcomes.
Making use of the data
Building a successful metrics programme is an exercise in change management that engages leadership early and often in order to build advocacy and to ensure that the data gathered will facilitate key decision making. Therefore, GCs should provide important stakeholders in the business with access to the pilot set of metrics and explain how success in one category will lead to being able to replicate this result in similar areas. GCs should aim to sequence the metrics programme for early wins in order to gain initial support from stakeholders, which will foster long-term success.
Presenting the data
Truly valuable data interacts with the wider business. It is important that, once the relevant data has been identified, is being collected and is starting to work, effort is put in to ensure that the data is presented in an accessible way and not in a vacuum. This is where investment in data visualisation and dashboard tools can be helpful.
A dashboarding tool can integrate critical information to produce meaningful metrics and provide a holistic view of legal department performance and effect. For example, Epiq offers a “Metrics That Matter” legal performance management program that includes commercial contracts dashboards for M&A due diligence, and data privacy and security. This enables in-house legal departments to understand the opportunities and obligations in their contracts so that they can quickly determine what actions need to be taken.
Nearly every legal department has a variety of systems that provide helpful reports, for example, in relation to e-billing, matter, contract, intellectual property, document management and workflow automation tools. However, these are rarely used to their full potential as they often exist in disparate platforms and are difficult to interpret, meaning that just a handful of people regularly access that data. A dashboard that integrates the data will immediately make it more accessible and, therefore, more valuable.
Meaningful data
In addition to using dashboard tools and data visualisation, it is useful to construct a narrative to accompany the numbers. This can be a simple explanation that explains the goals that the department is working towards and how this data tells the story. This will help bring the data to life and ensure that even those with the least technological expertise understand why the data is being collected and the story it is telling. Of course, context is important here, for example, a legal performance management solution that includes dashboards that not only give important context to data but provides a holistic view of legal department performance and impact.
Evolving metrics
Once the answers to these questions have been worked through, and a useful set of data is being interacted with and presented to stakeholders across the business, it is also important to recognise which metrics need to keep evolving. At every step of the metrics programme, GCs should engage with key stakeholders to ensure that they are focusing on actionable metrics that are aligned with organisational objectives while looking ahead to build a programme that informs strategic decision making.
Eyal Iffergan is the managing director of Epiq’s Legal Business Advisory group.