Performance Management in Legal Departments

What gets measured gets done. Legal departments must deliver results and service like all other business units. They must do so as a team and with each member of the department. Our firm's experience is extensive and covers

	measurable goals for legal departments
	stretch goals for business plans
	balanced scorecards
	key performance indicators
	competencies for counsel
	performance goals for law firms
	knowledge management

For further information on Performance Management, contact Richard Stock at rstock@catalystlegal.com or (416) 367-4447.

Articles on Performance Management

"Performance Management"
Lexpert, Vol 11, No 1, October 2009

The article summarizes the findings from an extensive survey of 11 large law departments from public companies. Topics included the use of 360° processes, internal user satisfaction surveys and formal surveys by law firms. The survey dealt with chargebacks, cost allocation systems, knowledge management, and programs to "fast track" the best lawyers in the law department. Finally, there were findings about the use of benchmarking surveys, cost controls, in-sourcing, and multi-year agreements with law firms.

"A Valuable Asset?"
Lexpert, Vol 10, No 9, July/August 2009

Three reasons are given why General Counsel should develop a working definition of the value of the legal department to their company. The question is posed about whether corporate counsel that have "clients and a practice" find it more difficult to make a strategic contribution. Five business competencies are defined and essential for corporate counsel of intermediate experience to master: customer focus, an achievement orientation, resourcefulness, critical thinking, and a strategic business sense.

"Are General Counsel Too Risk Averse?"
Lexpert, Vol 10, No 5, March 2009

A number of surveys of corporate counsel are referred to in addressing the severity and urgency of reducing total legal spend. The need for legal departments to acquire project management and other business skills is emphasized. Yet, there is a palpable reluctance in the corporate counsel community to initiating a substantive review of the legal economics of retaining external counsel.

"Competencies for Lawyers?"
Lexpert, Vol 9, No 7, May 2008

Legal departments are not captive, full-service law firms, and they are not the place for the in-house generalist. The article outlines six personal attributes, three leadership and development skills, and four business and client competencies that effective corporate counsel should master. To these are added functional / technical legal knowledge and skills required by the specific employer. CLOs must work hard to acquire, develop and promote team members who can demonstrate the full palette of competencies.

"Should the Legal Department Be Audited?"
Lexpert, September 2007, Volume 8, No. 10

Comprehensive “audits” of legal departments are rare. They are designed to provide a reasonable assurance of the adequacy, effectiveness and efficiency of the management structure, process and controls of the department. The Institute of internal Auditors has produced a Development and Practice Aid to assist internal auditors. Audit criteria and principles are described for seven areas: strategic positioning, structure, six elements of the management framework, workflow management, information systems, external counsel, and client satisfaction.

"The Five Pillars"
Lexpert, November/December 2006, Volume 8, No. 2

Five functions must be well managed for a high performance legal department. They include organizational alignment with the corporate business plan and the deployment of human resources for maximum leverage of legal intellectual capital. legal departments should maintain multi-year forecasts of demand for legal services and they should rely on formal competency-based tools to achieve the desired influence. The third function consists of criteria for and the careful selection of initiatives that will keep the legal team focused on priorities. The fourth function is strategic communications and the fifth is a focus on best practices coupled with innovation.

"Lawyers and Retirement Planning"
Lexpert, July/August 2006

Smaller rather than larger firms will experience more acute financial consequences for failing to plan for succession in their partnership ranks. The article discusses the applicability of department payments and some of the factors that must be taken into account. Planning for the retirement of a partner should begin 5 years before the scheduled departure.

"The Peanut Principle"
Lexpert, January 2006

The article examines the alignment of workflows and work allocation with law firm pricing and billing practices. The trade-offs between cost and effectiveness in the delivery of legal services are core to explicit conversations which legal departments should have with their preferred law firms. Good data, clarity about intended results,and fair pricing will improve the odds that everyone gets and gives their money's worth.

"Key Performance Indicators for the legal department"
Lexpert, March 2005

There is malaise about whether legal department contributions are well communicated and appreciated. Results are now critical for effectiveness. The article describes 8 Key Performance Indicators (KPI's) in four categories for use by a legal department: (1) Service Levels (department) - accessibility, turnaround, teamwork / morale; (2) Service Levels (customers) - results, overall satisfaction; (3) the Strategic Impact on external clients, and (4) Efficiency - cost of legal services, Budget performance.

"Reporting Results from the legal department"
Lexpert, January 2004

Too many legal departments get the annual goals wrong. The goals lack strategic value and the measures and indicators do not drive performance. Activity tracking is superficial or only financial. The article suggests countermeasures.

"Auditing in Legal Services"
Lexpert, October, 2003

Auditing is a process which few lawyers welcome when applied to legal services. The article outlines the framework being used in a number of public companies to establish value for money. The focus of the process in on resource consumption. The methodology has not evolved to correlate efficiency with effectiveness indicators such as risk management. The use of critical success factors and key indicators is described as a means of staying ahead of the standard techniques for measuring performance.

"Performance and Service Standards"
Lexpert, October, 2002

Many legal departments have figured out how to integrate legal service standards with corporate performance management programs. Four guiding principles are presented. The application of a balanced scorecard architecture to legal department goal setting is described.

"Symptoms and Solutions for the Ageing legal department"
CCCA 11th Annual Conference brochure (1999 Annual Meeting)

Symptoms of the "ageing " legal department; why an ageing legal department presents problems for the organization and for the lawyers in the department; things General Counsel can do to re-engineer the ageing legal department, using positioning statements, measurable goals and variable compensation.

"Competencies for Counsel"
CCCA 10th Annual Conference brochure (June 1998)

General Counsel wanting to position the legal department strategically within the organization must demonstrate that members of the department are "best-in-class" performers. Based on substantial benchmarking, this article discusses the array of competencies corporations require of their lawyers for each of personal attributes, leadership and development capabilities, business and client competencies, and functional / technical knowledge and skills.