Legal departments are under increasing scrutiny to deliver strategic value to the business. Like any other function, in-house lawyers are asked to demonstrate their contribution to the business. At the same time, many legal departments are requesting additional budget to tackle increasing workloads with new technology. These requests are typically decided based on legal data, which poses a challenge for legal departments that don’t have numbers to report.
To address this, in-house legal teams need data. And the only way to get the data is by tracking activity against metrics. This article will explain how you can track data within your legal team.
Time is Not Enough
Traditionally, the metric that lawyers have focused on is time. However, in the in-house world, the common shortcut (activity tracking = time recording) is unlikely to go far enough.
How much time someone spends on a task does not provide an insight into how valuable that input is. Furthermore, the time spent on a task says little about the performance of the lawyer. Time input can vary depending on factors outside the lawyer’s control, such as the quality of the instructions given. Poor instructions can result in additional in-house time required to complete tasks. If time is the only metric that you are measuring, this can reflect poorly on your team’s efficiency.
Measuring time as an indicator of performance can also incentivise the wrong type of behaviour. It can also give the impression that you are creating targets to achieve. This can lead to a toxic environment that is not necessarily productive. In-house lawyers should aim to spend a proportionate amount of time on legal work that delivers value to the business in the most efficient way.
What’s in a (Legal Piece Of) Work?
As time is not enough to drive decisions, other variables must be analysed to track the lawyer’s activity.
Six different factors influence the effectiveness of an in-house lawyer:
- volume of the activity;
- quality of the instructions;
- quality of the output;
- process methods used;
- complexity of the task; and
- priority of the task for the business.
Priority and importance are too often considered to be the same thing. When a task has an immediate deadline, we often drop everything to complete it. This can lead to rushing through a complex activity, which subsequently impacts how effectively the work is delivered.
This is why it is crucial to move away from the traditional model of tracking time. By doing so, we can better accommodate the notion that time doesn’t necessarily mean value, and priority doesn’t necessarily mean importance. Tracking the activities of your lawyers and capturing these additional metrics will enable you to assess whether the lawyers are spending time in the right way.
How to Make It Work
Even if your in-house team can agree that data is important, it can be challenging to implement the right system to track it. Most in-house lawyers have been freed from the burden that is common at most firms of having to track their daily activity.
However, if you want your lawyers to begin tracking their activity, you must ensure that these tracking activities are:
- efficient; and
- not focussed on performance management.
If your legal team already has a matter management system in place, this likely provides you with much of the data that you need to know. If you don’t, you have the option of acquiring a purpose-built software that will track your team’s activity.
However, both options will require an investment. This could lead to a chicken and egg situation because you need the data to justify investments but cannot collect the relevant data in the first place.
It Can Be as Simple as Excel
A snapshot of the activity levels in your team over a certain period of time can be enough to prove that investing in a data tracking system will be worthwhile. In this situation, a simple exercise in Excel can produce everything you need. Here, you can pick which data you want to monitor and track metrics that other management systems can’t.
However, this process will take time to set up and implement. You will want to set up the framework in a way that minimises the time and effort required from your team to input data. Here, creating scales or using pre-filled forms is useful to minimise their effort.
It is likely that time will still be one of the metrics you will be tracking. However, instead of referring to minutes, we recommend allocating percentages of time to different tasks.
Tracking time as a percentage can help remove any worry about being performance managed and the impression that it’s about how hard people are working.
You should also consider tracking the factors that impact the amount of time an in-house lawyer spends on a task. For example, you can record the:
- quality of the instructions;
- business unit responsible;
- quality of output expected;
- time spent on the task;
- expected value of the legal work;
- type of work required (advice, drafting, review, etc.);
- complexity of the task; and
- priority for the business.
Running this exercise will enable you to identify any inefficiencies or inconsistencies by making correlations between the time spent on a task and other factors.
The Power of Data
The in-house lawyers we work with are always busy. However, while managing your in-house team, you need to measure whether they are busy with the right work. Measuring the strategic value of legal activities will enable you to make data-driven changes.
To make those changes, you need to highlight the value of your team and build a business case based on the set of data. This will unlock a unique opportunity to engage in a meaningful dialogue with the business and demonstrate that your legal department is a powerful instrument for generating value and securing a competitive advantage.
By referring to a set of objective data, in-house lawyers can demonstrate their strategic value to stakeholders. As the outcome of legal work is subjective, tracking legal activity is the best way to capture data on performance. Tracking time on its own is unlikely to get you to where you need with your data. For the most useful results, in-house teams should keep track of the different variables that affect how much time lawyers spend on a task, such as the:
- quality of instructions;
- volume of activity;
- quality of output;
- processes used; and
- the complexity of the task.
If you have any questions about using data within your in-house team, contact LegalVision’s legal transformation lawyers on 1300 544 755 or fill out the form on this page.
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