I Don’t Know What You Should Be Measuring, But You Do: Best Practices And The Theory Of Reporting Relativity

Ask The right Questions

An important part of my job involves visiting with LexisNexis® CounselLink® customers on a regular basis and consulting on operational issues. At some point during our meetings, it’s almost inevitable that I’ll be asked: “What kinds of reports are other companies pulling on a routine basis, and what are they measuring? Do you have a standard list we can follow that will put us on a ‘best practices’ path?”

It’s difficult for me to respond in a way that satisfies clients, for good reasons: These questions do not have stock answers. What works out best for one company is not necessarily true for others.

These are the wrong questions to be asking.

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.

Reporting Relativity

Without getting into rocket science territory, I’ve chosen to use the term relativity as a framework for talking about reports and measurements because it fits well. In relativity discussions, space and time are usually the central points; for our purposes, place and time will suffice. Simply put: Reporting Relativity means the value of metrics and measurements worth pursuing will vary for different groups depending on where they are (place) and when they are (time).

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).

If you want a reinforcement of time and place factors, consider your own priority shifts with the market downturn in 2008-2009. Whatever operating elements you were comfortable tracking in 2007 were quickly replaced by a new focus on cutting expenses and finding business.

Cover The Basics First

The starting point to begin finding your own best practices is to make certain you’re taking care of the basics or normal, day-to-day practices. There are a host of fundamental business activities – usually captured in standard reports – which everyone should track almost as a common sense approach. That doesn’t mean the measurements are unimportant. On the contrary, they’re a vital and necessary part of managing a department well, which represents good practice . . . even if it isn’t necessarily best practice. On a relativity timeline, these kinds of reports help indicate how you’re doing, right now:

• Budget and/or Forecast versus Actual Spend
• Spend & Matter Counts by Litigation Type
• Inside & Outside Legal Spend as a % of Revenue
• YTD Outside Legal Spend versus Prior Year
• Outside Law Firm Ratings / Evaluations
• Litigation Risk Potentials
• . . . et al.

Your specific list may include these or additional metrics meaningful to your operations and important to company business leaders. There’s no shortage of performance items to track. In fact, the CounselLink solution offers more than 60 preconfigured reports that fit into a “standard” category, as well as options to custom build whatever else clients may need.

Moving Forward On The Best Practice Path

Routine reports are valuable for profiling what happened up to the present time. The missing complement is adding other elements to reflect and measure what you want to make happen going forward, which moves you into best practice territory.

From a process standpoint, adopting best practices involves setting goals designed to make changes and improvements to current operating conditions (place) so things will get better than they are right now (time). Having a good idea is meaningless if you are not able to effect change.

As a timely and relevant side note, Seth Godin, the bestselling author and marketing guru, put a good spin on making things happen in his short blog post from August 6, 2014: Analytics without action: Don't measure anything unless the data helps you make a better decision or change your actions. If you're not prepared to change your diet or your workouts, don't get on the scale.

A Plan For Action

One early action item to consider is learning more about goal-setting and the proper way to craft Key Performance Indicators (KPIs). There are worthwhile training programs and textbooks offering detailed how-to instructions, and also coaches who can guide you through the whole process. This article will only touch on the highlights as a template for best practices, which includes these steps:

• 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.
• 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.
• Identify KPIs that are specific, achievable and measurable to help you reach stated goals.
• Add further clarity to your planned actions by detailing initiatives for each KPI that will improve performance.
• 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.)

Reporting Relativity – A Practical Example

As a final contribution to the topic, here’s a realistic example that pulls all the pieces together. It is not a checklist for you to adopt. Instead, use it as a sample and guide to create a best-practice performance and report plan that:

• Aligns all the interrelated parts to be relevant for your business and its priorities
• Covers the fundamentals and builds momentum going forward for your key objectives
• Changes incrementally as progress is made to keep the yardsticks moving
• Adds new goals when old ones are met and process improvements become standard practice
• Is action oriented . . . and uniquely your own.