Defining consistent criteria for measuring quality in delivering legal services is usually a challenge for any organization.
Senior corporate management applies ever-greater scrutiny to legal services, which highlights the importance of metrics for law department operations. The company is likely to use metrics to discover and analyze the relationship between the law department activity and its current achievements. Besides, department metrics are becoming a common touchstone for the determination of executive salary, which is reflected in the internal counsel's compensation as well.
Law department metrics are typically a set of standard measurements which can be expressed in quantitative figures. Such metrics should be based on correctly organized and represented measurement data about from the litigation process (including its sub-processes and steps). Metrics are an attempt to extract information about legal work in numerical form and from its display derive useful insights about the law department operations (both in-house and external counsel).
Metrics consist of two type of analysis: legal benchmarking (comparing data about one law department with data from other departments) and self-analysis. Typically, benchmarking metrics are based on surveys conducted by various consulting organizations. However, the methodologies of some of the benchmarking surveys conducted in other law departments may be difficult to discern. Besides, most surveys provide a snapshot of what was true some time before the completion of the survey. Such information may be at least a year old by the time the survey is available; in many cases, the survey does not even disclose the time it was conducted.
Self-analysis metrics are focused inwardly. They provide an understanding of how the law department operates, at the present moment and for a specified period of time. Self-analysis metrics requires information to be collected consistently over time. That is why trends that appear from these metrics are more reliable and can become the foundation for ongoing and periodic research aimed to continuously improve the management of the law department. Such analysis can be extremely useful to a general counsel whose compensation depends on improved results revealed to the senior management.
To create a set of litigation metrics, it is essential to determine several key performance indicators (KPIs). Defining an appropriate list of KPIs helps the law department to narrow down its data collection efforts and focus on particular law department performance on some scale or in respect of some specific area of performance.
Therefore, key performance indicators should focus on considerations that can be used to obtain feedback to guide change in law department operations, as well as provide assessment and baseline data, and present a business case, or a diagnostic tool to identify areas for improvement and set priorities.
Key performance indicators are typically based on the following four categories: Cost-effectiveness (the effectiveness of the law department cost management, including allocation of personnel resources); Productivity (the productivity of the law department staff, including attorneys and legal assistants); Process efficiency (the smoothness and effectiveness of the organization's internal processes); Cycle time (the time required to complete a task, usually measured in hours).
Litigation metrics is not solely a framework for continuous evaluation against the company's strategic objectives. Good metrics program serve as a solid platform from which to show the company clients what results have been achieved in litigation by the law department attorneys or external counsel.