Our 2022 ELM Amplify user conference gave attendees the opportunity to hear from legal operations experts across industries. These knowledgeable professionals shared their experience and insights on many of the functions legal ops teams are responsible for. The subject of the “How to provide proof of value for your law department and law firms” session was one of the most broadly applicable for any company.
Our four experts – Daniel Decker, Senior Technology Product Manager at Wolters Kluwer; Vincent Venturella, Product Line Director for Insurance Solutions at Wolters Kluwer; Scott Schafer, Vice President, Litigation Management Services at Gallagher Bassett; and Sowmyan Ranganathan, Senior Director of Legal Operations at AbbVie – offered practical, salient advice on how legal teams can generate and demonstrate their value. Here are their top five suggestions:
Choose the right law firms: Gather and compile the data you need to compare the performance of your outside counsel firms. Run analytics to show which firms have the best outcomes, lowest cost, and shortest duration for similar types of matters. Those that deliver the highest value for your spend should be rewarded with additional work on future matters.
Decrease the denominator: Value is an equation. The numerator is driving outcomes and business objectives; the denominator is the cost to the organization and the business “friction” caused by performing legal services. In addition to meeting objectives to raise the numerator in the equation, you can also decrease the denominator by driving cost savings and efficiency. Reducing negatives drives your value up just as much as increasing the positives does.
Cut costs, but in the right places: Every company occasionally has high-risk, long-cycle matters to manage. At first glance, it might seem prudent to emphasize cost control on those matters that generate the most cost over the longest period, but it might not be. These matters often pose the highest reputational or financial risks. When this is the case, the additional costs may be worth it. Be sure you understand this balance before cutting down spend on these matters.
Share performance data with firms: Many legal operations teams collect scorecard data on firms to help with internal decisions about firm assignments and relationships. Sharing this information with law firms can help them to deliver the value you are looking for. When firms understand how you evaluate them and which aspects of their performance you are happy or unhappy with, they are better able to meet your expectations.
Provide value-based analytics: When you report up to senior managers, be sure your reporting focuses on value, not simply the easiest numbers to gather. For example, budget data doesn’t mean much on its own, but if you can show that you kept budgets down, didn’t exceed them, and still achieved great outcomes, then the value you’ve delivered is evident.
