Key Performance Indicators (KPIs): Run Legal with Business Metrics: Will the Legal of the Future Measure Everything It Does?

Abstract

Gone are the days when company lawyers were isolated in their ivory tower. In our fast-paced competitive environment, the aspiration of in-house counsels is to go beyond their specialist role and become relevant business advisors aligned with the company strategy and committed in bringing value to the business. Today, the concept of “legal performance” has become part of both the vocabulary and the practice of many general counsels. But how many of them have engaged in legal performance measurement through figures and metrics? In many corporate functions, performance is measured to ensure that teams contribute to the business objectives and strategy. Incidentally, one can question whether it is appropriate to measure intellectual outcomes such as the results of legal services. Yet, it certainly seems critical for legal departments to understand why they need to assess their performance, what should be measured, and how. Legal KPIs are often defined without sufficient consideration of what they are supposed to demonstrate, and to whom. It is necessary to start from the vision statement of the legal department, thereby identifying the objectives that support this vision, before defining the relevant indicators, which help to monitor the achievement of these objectives. By doing this, the Legal of the future should not measure everything it does, but simply demonstrate to what extent it contributes to business and strategic objectives. The execution of a “program” will actually help the successful implementation of legal KPIs and ultimately facilitate the transition to running legal departments like real Business Units.