Legal Operations:

Brave New World of In-House Counsel How to Measure Things

Presented by

Keikoh Park, Americas Region Chief Ethics& Compliance Officer, CBRE

Audrey Rubin, V.P., Aon Law

Mona Maerz, General Counsel, Legility

Dec. 10 & 11, 2019

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Agenda• Barriers to Change – the Brave New World of Measuring and

Tracking Legal Department Performance

• Why Measure and Track?

• How and What to Measure and Track - Tips

• It’s Customized

• It’s Agile

Lawyers

Applying

Bespoke

Legal Knowledge & Skill

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What Lawyers (Used to) Do

ACC: Focus Areas for Legal

• Change Management

• Contract Management

• eDiscovery & Litigation Management

• External Resources Management

• Financial Management

• Information Governance (Records Management)

• Internal Resources Management

• Knowledge Management

• Project & Process Management

• Technology Management

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Measuring Makes Sense– The New(er) Face of Legal

“You can’t manage

what you can’t

measure.”Peter Drucker

• Lawyers focus on risk avoidance limits decision-making. Kahneman, Thinking Fast and Slow (2011) p. 227.

• Preference for experiential inside view vs. evidence-based outside

view. Id. at 249.

• Common law deference to precedent and social constructs makes

lawyers reluctant to change. DeTocqueville, Democracy in America (Penguin, 2003) p. 308.

• Attorney work style: equating business with productivity (when in fact doing less creates margin (slack) for creative innovation

Barriers to Change

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• Survey says. Of 20 professions surveyed, lawyers were lowest on change

comfort index. Source: Discovery Learning Change Style Indicator 2019

• Service Creep. High profile projects involve complex planning, bespoke

handling, and unpredictable counterparty interactions, so we assume all

projects should be handled that way.

• Regulatory Restriction. Professional ethics rules

• Disaggregation Difficulty. Since not all issues can be categorized or even

identified, we avoid doing so altogether.

• Asymmetrical Knowledge. Lawyers’ tacit knowledge is not translated into

usable shared knowledge. Source: Kissel, Harvard Business Review 01/23/19

Barriers to Change (cont’d)

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• Your clients or others in your organization are measuring your output & effectiveness, whether you know it or not

• The metrics they’re using might not be the ones you would choose

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“Measurement Is Too Hard”

Where to Start?How and What to Measure

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How to Find Metrics that Work

Almost anything can be measured – think simply and creatively

Pick and customize focus areas (ACC Maturity Model) for your organization

Business and executives appreciate when Law tracks data

Find a helper if you want, e.g.:• Procurement

• Billing manager

• HR

• Finance manager

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10 LEGAL & COMPLIANCE METRICSCBRE

What’s the story you want to tell?• Value Proposition• Understaffed and Under-resourced?• Workload doubled while budget stayed same? • Areas of Risk that the business is ignoring/overlooking?• Pay equity issues that need correcting?

What’s the story your business leaders are interested in?• Did you overspend or underspend to your budget?• How are we doing compared to our competitors?• Were there some Big Wins this year that should be celebrated? • Concrete Action Plans and Business Strategy to gain a competitive edge next year?

What’s the story your data is telling you?• Some staff members overworked while others not pulling their weight?• Paying too much to certain outside counsel despite lacklustre feedback and performance?

WHAT’S THE STORY? Are these different or the same?

11 LEGAL & COMPLIANCE METRICSCBRE

TOP METRICS EVERY LEGAL DEPARTMENT SHOULD TRACK

(BASICS)

1. Spend to Budget2. Staff Workload3. Spend by Business Unit, Spend by Matter Type4. Evaluation of Outside Counsel5. Spend as Percentage of Company Revenue

SAMPLE METRICS 1

CORPORATE LEGAL DEPARTMENTS

Source: ACC Resource Library (www.acc.com), with some modifications

12 LEGAL & COMPLIANCE METRICSCBRE

ADDITIONAL METRICS TO CONSIDER (ADVANCED)

1. Client Satisfaction Survey Results2. Benchmarking against Industry Competitors3. Litigation History over Time, Trends & Hot Spots within Business Lines4. Trainings vs. Complaints & Internal Investigations5. Root Cause Analysis6. Remedial Actions Taken7. Lessons Learned & Best Practices8. Risks Managed/Mitigated/Avoided9. Costs Saved/ Productivity Improvements & Efficiencies Gained

SAMPLE METRICS 2

CORPORATE LEGAL DEPARTMENTS

Wendy L. Rubas, GC, Village MD on Measuring What Matters

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• Regulatory: training activities AND fines or sanctions

sustained or avoided

• Contracts drafted & negotiated AND the resulting revenue

• M&A or investment transactions AND resulting returns or

avoided risk

Measuring Outcome/ Value

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15 LEGAL & COMPLIANCE METRICSCBRE

BASIC METRICS (Activities Based):

1. Ethics & Compliance Training Completion Rates2. Annual Code of Conduct Certification Rates3. Ethics Helpline Complaints (% of Employee Population)4. Internal Investigations Numbers (Case Cycle Time, Substantiation Rate,

Percentage Anonymous Reports, Types of Allegations)5. Total Spend on Compliance Budget (per Employee, or % of Revenues)

SAMPLE METRICS 3

ETHICS & COMPLIANCE

16 LEGAL & COMPLIANCE METRICSCBRE

ADVANCED METRICS (Outcomes & Results)• % of Employees who understand policies• % of Employees who witness misconduct and report• % of Employees who fear retaliation• Evaluation and Benchmarking by External Consultants• Root Cause Evaluations and Effectiveness of Remediation

LEADING & LAGGING INDICATORS• Leading (Predictive) Indicators: Risk Assessments, Employee Surveys on Ethical

Culture, Focus Groups, Data Analytics• Lagging (Diagnostic) Indicators: Days lost to injuries, Employee disciplinary actions, #

of Allegations and Types of Allegations received

SAMPLE METRICS 4

ETHICS & COMPLIANCE

Example of Metrics that Work – Understanding Budget

Goal “Outcome” Metrics:

• In the last three years, the Law/Compliance Department has come in under target budget by _____Million. This equates to an average of _______% over three years.

• During 2019, the Law/Compliance Department came in under target by _________ Million. This equates to ________%

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Example of Metrics that Work – Diversity & Inclusion

• From 1.1.18 to 12.31.19, department hired __% diverse professionals

• In the global department, diverse professionals represent ________%

• The 2020 goal is that ___% of professionals be diverse around the world

Measurable Benefits/Story:• In compliance with / improvement of clients’ mandates

• Profit improvement

• Better project results/diversity of perspective

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Other Valuable/General Metrics:

Process Improvement

For each process measure:• Time

• Steps

• Hand-offs

• Risk Avoidance

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Real Life Case Study

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Track and report for 90-180 days efforts by employee, practice area, matter and

cost center for overall department of over 100 (NOT another time keeping tool)• Custom dashboards and reports

• Two weeks to implement

Metrics to Track

• Manage demand: What are we working on?

• Cost center allocation: Who is keeping us busy and how much?

• Resource allocation: Who is working on what?

Legility Client Example: Legal Team Manager App

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Use of the metrics drove measurable results for the client including…• Identified allocation of legal resources = enabled rebadging

• Identified demand trends = used to set priorities and right-size the team

• Found areas to consolidate and/or outsource

• Found things to just stop doing!

What Happened Next

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Complete ACC Maturity Model Categories

Exhibit

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• Change Management - A systematic process to enable an organization to

embrace targeted changes in the way work is done.

• Compliance - The set of activities to ensure organizational awareness of

and adherence to rules and regulations in all jurisdictions in which the

enterprise does business.

• Contract Management - The process of managing contract creation,

execution, storage and compliance with contractual obligations

• eDiscovery & Litigation Management - The process of identifying,

collecting and producing electronically stored information in response to a

request for production in a law suit or investigation.

• External Resources Management - Oversight of vendors and law firms

from selection through performance management and payments.

Maturity Model Categories

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• Financial Management - The discipline to allocate financial resources, forecast

revenues/expenses and create/maintain budgets to ensure compliance with accounting

and cash flow requirements.

• Information Governance (Records Management) - The system to manage electronic

and physical documents enterprise-wide to support an organization's compliance and

operational requirements.

• Intellectual Property Management - Operations to optimize the return on investment

in the intangible assets of an organization, such as patents and trademarks.

• Internal Resources Management - The activities to advance the human resources in

the legal department, including recruiting, onboarding, training, work allocation,

performance management, talent development and employee communications.

• Knowledge Management - The process of capturing, distributing, and effectively using

both structured and tacit knowledge assets, from work products (such as legal memos)

to understanding of an issue due to prior experience.

Maturity Model Categories cont’d

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• Metrics and Analytics - The system to collect, organize and use data to

inform decision making and performance management.

• Project & Process Management - The disciplines utilized to plan,

coordinate and oversee multifaceted initiatives and matters, as well as to

continuously improve process efficiency.

• Strategic Planning - The process to set legal department goals that align

with enterprise objectives, prioritize initiatives, allocate resources and define

metrics to assess progress.

• Technology Management - The set of activities to optimize utilization of

technology, including planning, selection, procurement and/or development,

training and promotion of adoption.

Maturity Model Categories cont’d

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