There’s a good case to be made that leading companies avoid benchmarking the competition. By definition, a company that follows what the competition is doing cannot be the leader.
That’s in part, the gist of Mike Haysley’s point in a pitch published in the Metropolitan Corporate Counsel titled I Don’t Know What You Should Be Measuring, But You Do: Best Practices And The Theory Of Reporting Relativity. While best practices have a place, corporate legal departments, he argues, are better served by building or adopting them to meet to meet their own unique needs:
“Instead of trying to determine what others are doing or looking for a standard list of reports, it would be more beneficial to determine what’s most important to you, your legal department and your company. Those are the kinds of things to measure and track.”
Mr. Haysley, an attorney, who prior to joining the LexisNexis® CounselLink® team spent a decade in corporate legal department operations points out that internal dynamics are also a driving force – no two businesses are alike.
“Customer visits have shown me how diverse legal departments are in staff resources, budgets, matters handled, priorities, strategies and other parameters. What is important and meaningful to one group is relative to its own operating conditions (place), which are subject to dynamic changes from year to year, or even quarter to quarter (time).”
He lays out five guidelines legal departments can follow to adopt their own best practices for reporting and analytics. The complete article (link above) includes three matrices for establishing baseline legal department goals, KPIs, initiatives and reporting over the course of three years – the first of which is posted nearby.
His five guiding principles are:
1. Vision. Have a high-level vision statement for your department that’s forward thinking, aspirational and fairly static. It should directly align with the corporate vision and strategic business initiatives.
2. Define goals that support that vision. On an annual basis, define three to five department goals that support your vision statements and corporate goals. Goals will change over time; the alignment should always be maintained.
3. Identify KPIs to measure those goals. Identify KPIs that are specific, achievable and measurable to help you reach stated goals.
4. Create an action plan for improvement. Add further clarity to your planned actions by detailing initiatives for each KPI that will improve performance.
5. Analyze and refine. Determine which reports and metrics will help you measure progress, prove success in reaching a goal, or support a necessary change in direction to get better results. (Use caution with metrics and ensure your measurements encourage the right behaviors. For example, if faster resolutions on employment litigation matters are the goal, your tactics should not result in paying more than is necessary in settlements.)
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If there’s a common thread year-to-year reducing outside counsel spend is the trend. What goals and KPIs do you think are most important for corporate law departments that seek to improve alignment with the business?
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