June 26, 2020
By CLOCReading Time: 3 minutes
June 2020 | Jamie Wodetzki, VP, Contract Strategy, Coupa
A fundamental question for any Legal Ops team is this: how do we know if we’re doing a good job? What would we measure to answer this question? More importantly, what would we measure to compare our performance to that of our legal peers?
To answer these questions, you need a legal data strategy. You need to start collecting and tracking data that measures various performance measures, and how these change over time. And where possible, you need to use data models that are normalized or standardized, such that you can compare contracts and contract performance against your departmental or corporate benchmarks.
But what is Legal Data? Where do you start? What sort of things can you realistically measure?
In no particular order, there are several obvious things to track:
First, internal legal team process and productivity. How long does the team take to complete common tasks? Who’s got what on their plate and are there any painful bottlenecks? Measuring these and other process data allows you to benchmark internal productivity, understand where incoming requests are allocated, and focus on actual problems rather than vague complaints about legal being too slow.
Second, external legal performance and value. How much legal work is farmed out to external counsel, and how do they perform in terms of speed, cost and outcome. What are the trends in terms of rates, billing models, and are you paying more or less than the market? Data not only helps you optimize your own process and performance, but that of your contractors, as well. Eliminating outsourced work in some instances and reducing cost and increasing value of external legal services in others.
Third, legal and compliance risks facing your company. Do you have trusted data on third party relationships and risks? Are you tracking golden customer and supplier data that satisfies KYC and other regulatory compliance demands? Do you have trusted data about your contracts and the obligations they contain? Can you measure the risks buried in your contracts, including liability risk, termination risk, IP risk and price risk, to name just a few? Are you able to foresee concerns before they become big issues? Can you identify provisions within contracts that put your organization at risk, including liability, termination, intellectual property ownership, and price? The role of attorneys is to minimize exposure and risk to the company, but are forced to become reactive instead of proactive when litigation matters arise. Since legal operations engages with each practice area, they have visibility into data that other practice areas may not know exists, and therefore are able to identify gaps without our processes and systems.
It’s safe to say the legal data landscape can be complex and confusing. Some data could reveal an existential threat to your business. Other data could save you a few bucks. You need to sort through and figure out what matters to your business.
Luckily, you don’t have to start from scratch. In some cases, there are industry standards you can adopt. In other cases, there are technology suppliers that offer well-designed data models out of the box (with the added bonus of being connected to a community against whom you can benchmark). And you don’t need to get everything perfect on day one.
Coupa has spent two decades drilling into these questions and developing a blueprint for getting your legal data strategy started. Our goal is to set you on the path to making your legal ops team a top performer, and to give you the data to prove it. To learn more about Coupa’s approach to operationalizing data, visit us online at https://www.coupa.com/products/contract-lifecycle-management/.