Putting the value of your legal department on the spot

A three-part plan to show the value of your legal department
Sterling Miller
Hilgers Graben PLLC

Many in-house lawyers focus exclusively on numbers and metrics when trying to show the value of their departments. But a metric-centric plan misses the fundamental, subjective notion of “value.” Trying to use a solely quantitative approach to solve a fundamentally qualitative equation is a mistake. Value is earned over time, and demonstrating it requires a multi-prong and multi-year plan — part marketing, part charm, and part numbers.

Our three-part plan can help you show the true value of your law department.

Part 1: Show them

As the perception of value is largely subjective, a top priority should be ‘marketing’ the legal department to the rest of the business. A long-term goal to build your brand as a team of helpful, hard-working value creators and value protectors will take some effort.

Focusing on “soft skills” — like listening, empathy, and a desire to be helpful — can go a long way in helping how the business perceives the legal department. Everyone matters but focus on who matters most — CEO, CFO, etc. — and ensure they are happy with the department by offering a “service-first” attitude.

Take advantage of the fact that most people within the business have very little idea, technically speaking, of how good a lawyer anyone in the legal department actually is. Creating a positive impression requires a lot of “getting things done” results and client service, but also some deft salesmanship on your part.

The legal department's value also relies on its attorneys' understanding of the business operations, including familiarity with the company's products and services; its business model; and its top customers, competitors, and vendors. That involves reading the company’s strategy and business plans and staying current on the marketplace. Your knowledge of the business will reveal itself at crucial times and help show the business they have a legal team that does more than just push paper around. Few things are more valuable to an organization than having a legal team engaged and invested in the business's success because it understands the issues, threats, and opportunities it faces.

A legal department that demonstrates value is one that makes things happen — consistently and with urgency. Good lawyers are hired to exhaust all their creativity to find ways to get things done. Everyone on the team needs to buy into this goal.

Part 2: Tell them

If you wait for the business to spontaneously recognize the value generated by the modern law department, you may be waiting a while. Sometimes, you just have to tell them what value the team delivers. For example, prepare a report detailing some of the significant legal team achievements and share it regularly with senior leaders.

If something really good happens, ensure that the right business people know about it immediately. Use leadership staff meetings to report on big contracts, litigation, acquisitions, problems avoided, compliance matters resolved, regulatory issues solved, etc. Leverage crises to your benefit by proactively taking up the cause to demonstrate immediate value. Eventually, the perception of the department will grow more positive as the business learns what the law department is doing.

Part 3: Prove it

Use numbers to demonstrate value. The language of business is numbers, so smart in-house lawyers must speak that language fluently.

While difficult to create, measurements like key performance indicators (KPIs) can show the value generated by the legal team. If the business is asking for KPIs, give them what they are asking for. However, you are not limited to generating only and exactly what they are asking for; often, the business wants you to create some type of KPI so they can cross it off their list. What you actually come up with can be less important to them than just getting them something that looks like a KPI.

The bottom line is that legal departments are often free to create whatever KPIs they want as long as they provide information the business is interested in, like legal spending and contracts. Take this opportunity to tell the story of the legal team the way you want to tell it. For example, the best KPIs focus on value generators like legal spending discipline, contract completion, litigation success, compliance, and intellectual property generation.

Businesses love benchmarking data. This data can be internal, such as year over year, or external, like something you find or purchase. The latter is challenging because finding other legal departments with characteristics similar to yours, your company’s business and complexity, and the exact types of legal work expected from you is difficult. But if you don’t develop benchmarks, someone else will — and it may not be helpful. So, make it a priority to locate or create your own benchmarking data. When used properly, benchmarks tell you where you are within the market and whether you can target things that need fixing. Importantly, you can use data to show the business that the department is taking action to fix something or improve.

Internal client satisfaction is critical to actively showing the legal department's value, which is done by regularly measuring satisfaction levels to ensure the department focuses on what matters most to the business. You can do this via a client satisfaction survey that, for the purposes of measuring “value,” should cover several core questions, such as:

  • Does the law department add value?
  • Is the law department focused on the right things?
  • What should the law department focus on next year?
  • Is the law department easy to work with?
  • Rate key “value” attributes on a scale, like speed, helping with business terms, practical solutions, etc.

You can use the results to determine business concerns and develop a plan to address those. More importantly, based on the feedback, you can report the results to the business along with your plan to improve the delivery of legal services. That’s what the business wants to hear — constant improvement supported by the numbers.

There is no magic bullet when it comes to showing the value of the legal department — and one bad experience can undo months of effort.

True value is an accumulation of many different steps taken persistently over time. You must be patient and work at enhancing the perception of your value to the business every day. Everyone on the legal team needs to understand that their value is dynamic and constantly changing and that working towards proving that value is so vital to the success of the department.

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