Experience and dozens of engagements with corporate legal indicate that most law departments fall between somewhere between the third and fourth levels of the corporate legal maturity model. Few organizations fit squarely in any one stage, but we find most in-house teams have some technology deployed and are working towards integrating information.
“Growing up is hard to do,” as the legal trade publication, Corporate Counsel recently put it. Yet it’s important to note the maturity model isn’t a letter grade. The goal here isn’t merely to “score higher” as if it were an LSAT exam; rather it’s a basis for evaluating opportunities for continuous improvement. At the same time, there is considerable recognition, acceptance even, to suggest a clear demand for improving legal department efficiency.
1. Current state of maturity. When we say most legal departments have some sort of “deployed technology” in some cases this might mean the organization has the maturity to request a budget. However that budget is probably managed by spreadsheets as opposed to being maintained in a system that allows for (automation assisted) tracking. The benefit of keeping budgets in a system comes to light in vendor management. For example, corporate legal can apply (ideally built in) analytics to a spend management in order to make objective decisions about preferred vendors or in evaluating whether or not a legal service provider is meeting expectations. Legal departments can be mature in one area, and less mature in others, which is why the persistent goal is continuous improvement.
2. Questions for getting started. The first step in beginning the maturity process is evaluation. When we consult with clients, we begin with a questionnaire that includes both corporate lawyers and legal department operations and ask them rate the organization in a given area. Next we’ll identify the areas in which they’d most like to improve. The delta between these two findings is usually a good place to focus projects for improving process, technology or analytics projects.
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3. Choose specific objectives. We often use alternative fee arrangements as a hypothetical example – a legal department might decide, over the next 12 months 20% of all matters will be invoiced under an AFA model. The point isn’t to focus on AFAs, but rather to illustrate sharp focus on specific objectives. Rather than attempt to boil the ocean it’s important to break objectives down into details that can be improved. A legal department may be perfectly fine with the billable hour – the goals set should meet the specific needs and remain within reach of the limits and resource constraints of the organization.
4. Establish and measure KPIs. KPIs, or key performance indicators, are measurement tools for evaluating performance. Common KPIs include using creative pricing, reductions in hourly rates, and law firm panel consolidation. Often legal departments surface data or metrics internally that could be useful – but they don’t establish KPIs or resist measuring them over time.
5. A visionary is required. Many of the technology projects we see implemented are executed by legal operations. It’s an appropriate role and probably the right function to lead such projects, given the task operations is usually charged with in efficiency. Where legal operations sometimes get derailed is in the day-to-day – they occasionally lose sight of the big picture and the overall corporate legal strategy. This is an important role for senior leaders – ideally the general counsel – to fulfill. If corporate counsel does not have a resource that can objectively help assess legal department maturity and suggest ways to advance – it’s worthwhile to consider a strategic consulting resource. The key is to have someone who takes a step back and ensures not just that the legal department is marching in unison – but that it’s marching in the right direction.
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The upside side is every step towards maturation is a step towards making better decisions with the information available. That’s the path towards developing the maturity for predictive results and delivering more value.
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