The General Counsel of a large car rental group felt that his in-house legal team’s metrics didn’t adequately present the full business impact of legal strategies and outcomes. He wanted to create metrics that accurately measured the broader impact legal services has on a corporate entity; which could inform legal and business decisions.
We worked with the group’s legal team to develop an impact measurement framework aligned to its core business priorities: revenue, margins, operating efficiency, and risk profile (Business Filters). For each matter (i.e. litigation, transactions, policy management and advice), using our proprietary platform CrossLite, in-house lawyers identify and record the strategic or tactical contribution reported through the Business Filters. We then created algorithms that calculate the impact as a dollar value. The information is recorded in the matter management system and visualized through a dashboard. The new framework identifies the financial and non-pecuniary values from legal services. The Project’s first stage enables the group to collect and report data on business impacts; subsequent phases will enable predictive ROI analyses, which it can use in conjunction with legal analyses to make better strategic decisions, assure the best alignment of legal and business goals, improve client satisfaction and determine the best use of in-house and outside legal efforts. The metrics created demonstrates not only the legal value, but also the commercial value of legal services. The next challenge is to proactively “predict” a range of ROI resulting from a matter.
The new information and custom dashboards provide a clearer picture of the value that the legal function is delivering and elevate the conversation about the legal function’s role; using metrics and nomenclature that are meaningful to Senior Management. In addition, the insight into the value of different legal matters has already enabled the legal team to more effectively prioritize its work. Lower value activity is being reduced or eliminated, allowing the in-house lawyers to focus on more commercially impactful activity. The in-house team is also seeing the potential to use the insights more proactively. Having broader economic information to layer over the legal analysis helps legal and business persons understand the big and small implications of the strategy options related to each matter. The plan is to then use this data to drive further improvements in the legal team’s processes, and the company’s wider business processes, potentially transforming the way in which the legal team interacts with the business and delivering even greater value.