A well-known business quote states:

The objective of developing a General Counsel Dashboard is to provide meaningful metrics that the law department can use to measure its performance. This effort provides important benefits:

• Agreement as to the data needed for the law department to provide effective support to the organization
• Comparative data for peer “best practices” review
• Confirmation of what the law department is doing well
• Identification of targets for improvement

These metrics are sometimes referred to as “Key Performance Indicators,” or KPI. These indicators or metrics can, and will often, differ from one department to the next. One common thread for every law department, however, is that the metrics can almost always be categorized into three groups:

• Law Department Metrics
• Outside Counsel Metrics
• Business Partner Metrics

Some examples of metrics within these categories are:

Law Department Metrics

• Lessons Learned – Review of Closed Matters
• Claims / Matters managed in-House vs. Outside
• AFA as % of Total Spend

Outside Counsel Metrics

• Time by Matter Analysis
• Settlement vs. Spend
• Outcome Success Report
• Flat Fee vs. Actual (Shadow Billing)

Business Partner Metrics

• Cycle Time on Contracts
• Root Cause Analysis
• Division Revenue vs. Legal Spend

KPI’s are important to ensure understanding of how success is defined for all stakeholders. Measuring within the context of department goals, client goals, organization objectives and industry best practices ensures effective and efficient legal services. KPI and analysis of the underlying data can sometimes result in changes to processes outside of the legal department’s purview.

A striking example of the power of legal matter data was the experience of KONE elevators, a worldwide leader in escalators, elevators and moving walkways.   Analysis of claim data by KONE resulted in changes to customer store layouts providing dispute avoidance by reducing accidents.   United Technologies Corporation (UTC) is another example of the effective use of measuring and managing legal data to achieve organization goals. Analysis of matter vendor and spend data was the cornerstone of UTC’s outside counsel program. UTC Legal was tasked with reducing the number of law firms used, in addition to implementing alternative fees.   With a 50% reduction in firm count and 70%+ of outside billings under alternative billing arrangement, UTC has met and exceeded their organization’s goals.