Today’s legal departments are tasked with accomplishing and contributing more than ever before. Not only do they need to provide legal advice and oversee compliance, they must also anticipate threats, collaborate across teams, contribute towards shaping the strategic direction of their organisations, and more.
Still, most legal departments are measured against just a fraction of what their job really entails. Because, while most legal teams are using metrics-driven approaches to manage their departments, most are only reporting on external spend, turnaround and response times, and quality of work. In fact, this year 90% of departments reported that they used some form of metrics in 2021, compared to just 75% in 2015 (Thomson Reuters Institute 2022 State of Corporate Law Departments Report).
Those metrics are just the beginning of what we should be reporting on. If we stop there, we’ll end up boxing ourselves in, forever stuck as a department that is primarily looked at through the lens of cost and efficiency. Don’t get me wrong, these are great data points, and at Thomson Reuters we are still refining our reporting in these areas. But to show our real value we need to be measuring and reporting on the less tangible, longer-term, more strategic areas that go beyond the efficient churn of legal advice.
In other words, we need to measure and report on our effectiveness. These are the things we do that impact the overall business in a positive way and that contribute to driving the organisation’s purpose and annual goals. While effectiveness is harder to measure, I believe that it is far more important and indicative of the true value that the legal team brings to an organisation.
Defining effectiveness
Before you can measure anything, you must define what it is. And while your version of effectiveness might be different to ours, it should be tied to how it contributes to overall company goals. Put simply, being efficient is getting through the work more quickly, but doesn’t address whether we should be doing it, someone else should be doing it or no one should be doing it! At Thomson Reuters we are thinking of how effective we are by looking at how preventative and proactive our work is.
Measuring preventative work
Being efficient is great; being effective is better. But while efficiency is relatively easy to measure, effectiveness is more difficult. One way we try to be more effective is through the lens of preventative work. Consider this: in some areas of China, doctors will only bill you if you don’t get sick; they see their job as keeping you healthy and if you’re not sick, they’re doing their job well.
Likewise, at Thomson Reuters we are looking to put in place initiatives to measure preventative success by what doesn’t come to Legal (rather than what does come and how quickly you do it). If requests that used to hit our desks are decreasing, that means we’re doing a great job on our preventative work.
This work includes providing training to our business co-workers so that they don’t unintentionally create easily avoidable legal issues or ask us for guidance that they could give themselves. In a sense, we’re helping to make the business the first line of legal defence, rather than using the legal department as a catch-all. Proactively protecting our company is a team sport.
Measuring proactive work
From anticipating threats, to acting as business partners to disparate teams, to creating new workstreams to solve business challenges, proactive work is as valuable as it is difficult to measure. Because it is broad, at Thomson Reuters we make the metrics we report on as connected to the overall business goals as possible. A big part of our proactive work is focused on helping the business to help us use our time in the most effective way possible. As a department you want to be spending it in the places where you’ll provide the greatest value and be the most effective in driving the business forward. It’s a big shift.
It’s likely that your team is spending a disproportionate amount of time on low-risk, low-value, high-volume tasks. And if your department is siloed, as many are, it’s hard to know if the tasks that are keeping you all so busy are the best use of your finite (and expensive) time. In other words, are you sacrificing the long game of effectiveness for the short game of efficiency?
We’re increasingly asking ourselves that question. By measuring what we were working on, and the volume and value of that work, we found that the answer for our legal team was largely “yes”. To really add value and be effective, we need to alter where we spend our time, which is increasingly necessary as we try to do more with less. That said, our low-risk work wasn’t reducing and, if anything, it was increasing. So, we made the decision to shift to a self-serve model for low-risk, high-volume requests such as:
- NDAs.
- Forms.
- Basic contracts.
- Standard contract variations.
This shift has been hugely beneficial to our peers as they can now get on with business without waiting for Legal, but it didn’t happen without ongoing communication and training. Gathering feedback and looking at data helped us to gauge what was working (for example, which self-serve tools were being used) and identify opportunities for improvement (for example, which low-risk tasks were still being sent directly to Legal).
Not only has this freed up the legal team’s time to focus on more strategic work but it has also helped to strengthen relationships across departments, further positioning us as real partners. We are no longer “the people who say no” but are rather business enablers who will work with you, collaborate with you and help the business move forwards.
Next steps
In November, Thomson Reuters is hosting Legal Leaders Europe 2022, where we’ll be sharing strategies on how to operate as a successful, efficient and trusted strategic business adviser. I hope to see you there.
