March 27, 2019

By Sandy Owen, Connie Brenton, Kevin Clem, Peter Eilhauer, Vince Vetri

Page Reading Time: 7 minutes

The goal of the CLOC Metrics Initiative was to deliver a core set of metrics and a common language to be used within law departments to measure performance. The resulting set of metrics should be easy to implement and are based on readily accessible data using a number of common underlying systems such as eBilling, matter management or contract management. Over time, the broad adoption of a standard set of core metrics such as these will support more accurate benchmarking across the ecosystem.

The CLOC Core Competency Reference Model provides the steps to build an effective legal operations function. The CLOC Core Metrics Initiative summary presented below focuses on the following critical and impactful competencies when developing the metrics needed for your legal operations function.

• Strategic Planning
• Data Analytics

The CLOC Metrics Initiative cohort presents a high-level introduction to a core set of metrics and a data dictionary and glossary. In this document, you will learn why a core set of metrics and processes matter and how you can build and implement these practices into your legal department.

It seems that all of us, especially those in the corporate space, are being asked to do more and more with less. Being more efficient is something that we all want, but how should we quantify it? Can we measure the changes we are driving? How do we determine if we’re operating efficiently or measure the impact of the changes we’ve already made? Can we, or should we, compare ourselves against others in the same space? What data points are most important to measure and how do we gather data on those points? These are just a few of the questions we’ve been asking ourselves.

Metrics are a big topic, too big to define completely in one initiative. The Core Metrics Initiative worked to establish a core set of metrics that could be universal to everyone, today. This, they hope, will form the basis for a common language and taxonomy that, over time, will evolve into a standard.

Why Standard Metrics Matter

Metrics not only allow law departments to measure their performance against internal standards but also, when there is a common language, against comparable external benchmarks. HBR Consulting’s 2018 Law Department Survey indicates that legal organizations continue to deal with increasing demand; however, budgets are flat and in many cases are declining. Law department leaders are often looking for external measurements to see how they stack up on key operational metrics such as spend, additional uses of technology, outside counsel, and many others. The need for consistent metrics is critical across those data points. Whether you need to evaluate how your department stacks up in its current state, as part of a broader operational review, or just to identify ways to take the department to the next level. Metrics must be used objectively to quantify, analyze and report on performance over time.

A large majority, 81 percent, of departments reported an expectation that their legal needs will continue to increase in the next year, citing commercial contracts, regulatory compliance and mergers and acquisitions as the top practices areas likely to require legal attention next year.
– HBR Consulting’s 2018 Law Department Survey.

A thorough benchmarking analysis can be a critical tool to determine best practices; however, if a law department’s metrics are not clearly defined, and in writing, the information may not be reliable. There are a growing number of surveys in the industry; yet there is also a lack of consistency in the types of companies that participate, as well as in the specific areas of focus of the benchmarking surveys. Gaining alignment on which data points are the most important and, at a minimum, creating an inventory of the metrics that should be used by law departments is a gap addressed in the CLOC Metrics Initiative.

Part of the CLOC Metrics Initiative goal was to identify a core set of metrics that could be incorporated into underlying systems like electronic billing, matter management, etc. to allow for a common taxonomy regardless of which software vendor used.

“Intel’s legal department grew up around a number of different tools across the practice areas and we never had one central place for data that was similar. Whenever we wanted to benchmark it was really difficult to pull together the data with high confidence. We would typically start off with our finance team to get our financials. But, since the finance team couldn’t see into our e-billing System, they could only give us our spend totals. The spend totals couldn’t give us any real insight into whether we were being efficient. I was constantly looking for ways to show the results of the programs we are running.”
– Sandy Owen, Director of Business Services, International Legal and Operations, Intel Corporation

Finding ways to accurately capture data the right way, and benchmark it, is a fairly common refrain amongst all legal operations professionals. Everyone is trying to collect data and metrics on their law department performance. Each person, in their own silo, is capturing data in the way that they deem best for their own use. While that works for the individual, it doesn’t always create a common standard that can be used to compare department performance with peers or with best practices.

Creating a Standardized Language

We began to see metrics as a kind of language. What we’ve seen in our industry is that each person is creating their own language. We were determined to take all of the metrics – the languages that have been created – and use them to create a common language with common words and common definitions. The CLOC Core Metrics Dictionary and Glossary was created to provide a foundation for any legal operations professional to generate a financial profile and communicate key performance indicators about their law department. The Dictionary and Glossary ensures that there is consistency in how all legal operations professionals are calculating their core metrics.

The CLOC Core Metrics Dictionary The ultimate common language which all legal operations professionals should speak along with calculations, formulas, and how to interpret the results.

The CLOC Core Metrics Glossary Explanations of the data elements and what other law departments typically include.

The CLOC Core Metrics Dictionary and Glossary also shows how to generate reports, what systems to generate reports from, and how to apply filters. In keeping with the language analogy, the dictionary contains the word and the glossary defines the word.

Getting Started with Your Department’s Metrics Program

We put together a suggested set of metrics to develop – what we consider to be the baseline, or foundation. In reality, if you’re capturing the 5-6 data elements that make up these core metrics across the categories of spend, resourcing and demand, you can create a much more robust metrics program across various practice areas for your organization.

This is by no means the end of this effort. Much like a “normal” dictionary, words will continue to be added. We look forward to growing a common dictionary across the ecosystem, but for today let’s get started with what we have!

Step One – Gather the Data

Starting a metrics journey may be a little daunting at first. The key is to take baby steps and know where to look for the data that you probably already have. We found that the key core tenet of metrics is related to spend. Spending and staffing are most often the areas that people look to for their key core metrics.

Many law departments have already implemented an e-billing system. Consequently, data on spend by firm, by practice area, or by region can easily be obtained. However, the core metrics that we’re really looking for rely upon a higher-level category of spend data — internal, outside counsel, and other non-law firm vendors.

Look for other sources of data that will provide any missing information. For example, every company should be able to gather information from their AP system, even those that may not have an e-billing system or are in the early stages of technology adoption. It doesn’t take a significant amount of work to gather some of the core elements needed to begin a metrics journey.

Step Two – Cleanse Your Data to Ensure Accuracy

Our goal in developing the Core Metrics Initiative was to simplify the process and only require a handful of data points to be captured. However, it’s important to keep in mind that your metrics are only as good as the data that you’re able to collect. We all agree that you can’t manage what you can’t measure. But if what you can measure is based on bad underlying data, your management decisions will be negatively impacted.

You’ve got to start somewhere. However, you also need to complete a thorough review of your data to get a sense of whether your data is clean, or needs additional cleansing. Make sure to identify incomplete, incorrect, inaccurate or irrelevant parts of the data and then replace, modify, or delete the dirty or coarse data. Cleansing your data on a regular basis is an important step in accurate data analytics.

Step Three – Analyze and Interpret the Results

Once you’ve captured your data and ensured that it’s clean, you’re only a few steps away from viewing your law department’s core metrics. There are many options to analyze, visualize and communicate your results.

The CLOC Core Metrics Dictionary includes calculations that you can use with a few data points and minimal effort. By using those formulas, you can recalculate your core metrics in a basic tool like Microsoft Excel or Google Sheets. As you begin a more advanced metrics evaluations and link to the rest of your data, you may want to consider utilizing a business intelligence platform designed to consolidate and analyze data. The goal is to put the power in your hands.

Calculating core metrics is something that you can easily do on your own, but it’s important to know that you have options and that you’re supported by the CLOC community.

So what’s in it for you and why should you care?

It can be a challenge to undertake a metrics project. However, we hope you’re getting excited about the benefits that data metrics can bring to your legal operations and that you’re starting to think about what you can do with your own data. If you’re just beginning this journey remember to start small. Take small steps with incremental improvements.

The benefits to metrics collection are huge. Not only will you have a tool that you can use internally, but you’ll have the ability to share data and benchmark your results.

“Probably one of the most immediate benefits we got from our metrics project at Intel was to identify areas we were operating inefficiently and put programs in place to fix them. Starting small with the data we already had allowed us to deliver immediate value and build credibility as we expanded our metrics program.”
–Sandy Owen, Director of Business Services, International Legal and Operations, Intel Corporation

Key Takeaways

1. Download the CLOC Data Dictionary and Glossary (Access for Members Only) so that you can begin to understand the data that you need to collect, and then you can begin to identify the data that is easily accessible.
2. Take small steps with incremental improvements.
3. Identify data streams and determine how to collect and cleanse the data.
4. Use programs to analyze, visualize and present your findings.

Attend a CLOC Institute to learn more about this, and many other topics of interest to legal operations professionals. Are you an in-house legal professional? Join CLOC as a member and be part of the discussion!