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Vendor Management Goals and Metrics for Claims Legal Professionals

Matching Organizational Goals with the Right Metrics to Get You There

There’s an old Sufi tale in which a wise man comes upon an elderly man searching the ground under a street lamp. He inquires what he’s doing, hoping to help ease the man’s distress.

“I’m looking for my lost keys,” the older man replied.

After some time searching the ground without success, the wise man finally asks, “Are you sure this is the spot where you lost your keys?”


“Well, no,” the old man said, pointing to a spot further down the street. “I lost them over there, but I can’t see very well, and the light is better here.”

What does this famous old tale have to do with measuring the success of vendor management and metrics?

If you’ve ever been the person searching for the right data to measure the success of your vendors, chances are, you might have asked yourself at one time or another, “Am I looking in the right place? Are these really the metrics that will help shed light on the goals important to my organization?”

If the answer is no, it’s important to step back and remind yourself that you don’t have to use the metrics that are readily available to you.

Likewise, you shouldn’t rule out reaching for a particular goals just because you’re not sure how you’ll measure or report on it.

For example, it’s perfectly acceptable to measure satisfaction with an attorney’s performance on a scale from one to five. Once established, it can be collected and reported on, and if the metric becomes part of a scorecard, it can be weighted accordingly.

Claim legal professionals are always looking for ways to measure whether they’re doing a good job of understanding and controlling their outside legal costs. They want to know if they’re getting the best results from their defense firms, but they don’t always know how to tell the story about the journey and the results.

They face two challenges: First, it may not be immediately obvious what is most important to measure, and second, they may not have an easy way to collect the information. You should select a set of important goals and focus on the critical few, and this should be the first step.

These can be related to rates or outcomes, or they may be based on operations or compliance. You can also orient your goals toward relationships or communication.

Once you establish your goals, you need to pick a relevant metric, then figure out how to collect it.

It’s important to recognize that lawyers and other related providers – such as experts and court reporters – are vendors. They provide services to your policyholders for a fee, which you in turn pay. The best vendor relationships have clear guidelines and transparent measurements. The guidelines support the goals, typically to provide the best defense and results for the policyholder. As a carrier, your duty is to know which firm is best for the job.

For example, responsiveness and communication may the most important metrics If your goal is to be able to call a lawyer with a notice of suit just filed and have their firm leap into action with all guns blazing that same day.

For firms you’re hiring to handle fairly routine high-volume matters, hourly rate may be most important. In that case, the right metric may be average cost of case to resolution, or median time to resolution.

Whatever your first goal, your next goal is matching it with the appropriate metric.

Modern legal eBilling systems like CounselLink will help you capture all this information automatically. From there, you’ll need to make sure that the vendor’s professional services group can help guide you to the best processes for capture and reporting. Professional consultants – whether third party or as part of the vendor’s service team – should help you both articulate your goals and uncover the right metrics.

My colleague Kris Satkunas has written an excellent white paper about how to create a vendor managemetnt program for claims legal professionals. You can access her white paper here.

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About Dan Ruderman

Dan Ruderman
Dan Ruderman is responsible for business development in the Strategic Consulting Group at the LexisNexis Business of Law and Litigation Software division. With over 25 years leadership experience Dan advises Fortune 1000 corporate legal clients on operational excellence, matter and legal spend management, and outside counsel management, with particular expertise in helping insurance company claims departments. He has helped some of the country’s best-known claims legal departments institute techniques and programs that led to dramatic process improvement, as well as significant control over litigated claims’ costs.