Performance and Service Standards

Author: Richard G. Stock, October 2002 issue of Lexpert

For the second year, Harvard Business School Publishing sponsored the Burning Questions conference in Martha's Vineyard. The conference brought together business leaders, academics, consultants and even a Pulitzer Prize-winning poet to talk about leadership, strategy, and customers. One valuable outcome was a case study by Loren Gary (lgary@hbsp.harvard.edu) dealing with innovative processes as a source of value creation.

Law departments in the corporate and government sectors have to make choices about how their lawyers can best add value. There simply is not enough time to respond to every need, and it is myopic to not plan for rapidly changing demands in services. The mix varies from risk/loss management to legal services and strategic business advisory services. Established companies and government departments need all three, usually simultaneously. Gary's case study concentrates on two of the four components of the innovation and value creation process: the generation of ideas and deciding which ideas get developed into business plans.

The Value Proposition

Value balances quality and price. In turn, quality is a trade-off between service and results. Moving past the concepts, general counsel and their lawyers have to deliver measurable value every day. There is ample evidence that metrics and the satisfaction of internal "clients" affect how legal talent and priorities line up. The same demands for accountability, service and results are being made of other corporate departments - human resources, information services, finance, etc.

A good number of law departments have figured out how to integrate legal service standards with corporate performance management programs. The approach generally begins with four guiding principles:

• innovation as the anchor for strategic value;
  

• value enhancement, which clients can measure;
  

• compatibility with benchmarked best practices in positioning law departments within corporate settings; and
  

• service standards reflecting a set of balanced expectations with the major internal users of legal services.

The Performance Architecture

A good number of companies and government departments use a planning and alignment mechanism called the Balanced Scorecard ( www.bscol.com ). It calls for goals in ( at least ) four quadrants - clients, costs, internal processes and learning / development - arguing that all are essential to yield superior results. The methodology " enables " the company's business strategy, beginning with a few high-level goals in each area. For example, the goal for the internal processes could be to make service the performance driver for the law department.

Each goal anchors several objectives or initiatives that must pass the SMART test. The objectives are:

• specific - based on a single theme;
  

• measureable - based on the four cornerstones of quantity, quality, cost and timeliness;
  

• achievable - in the upcoming fiscal year, even if a stretch objective;
  

• relevant - linked to business unit sucess; and
  

• time-bound - targets and pacing throughout the year.
  

Each initiative has measures or indicators and a date by which it must be completed.

A law department objective then has to become the objective of one or two lawyers. It has to be broken down into something that a few people will undertake and for which they will be held accountable and be recognized for their contribution. Here are a few examples:

Clients

Costs

Business Processes

Learning and Development

Innovation is the key to adding client value. Law departments can choose their priorities because the legal services portfolio is a universal passport.