How Data-Driven Decisions Can Help Uncover Value in Your Legal Department

While the volume and variety of work for in-house lawyers has increased in recent years, budgets have not always followed suit. In-house legal teams are tasked with controlling costs while improving productivity and profitability, as well as providing a valuable contribution to their organisation’s business goals and strategic vision. This is in addition to the standard day-to-day activities of the legal department.

Challenges resulting from COVID-19 have not only changed the way legal departments operate and undertake business but have also exacerbated existing pressures. It is perhaps more important than ever that in-house legal teams safeguard their organisation and operate more strategically.

Data-driven spend- and matter-management technology can help legal departments control their work and costs, yet knowing exactly what to look for can be challenging, especially when there is so much at stake. A new report from Thomson Reuters, Using metrics to manage matters, spend, and deliver value, will help you understand how data and metrics can help reduce costs and increase efficiency, and provide information on the features your legal department should be looking out for.

Utilising technology to reach your goals

Increasing efficiency through workflow management, spend-reduction, and providing best-in-class legal services—all the while acting as a facilitator of commercial and strategic goals endure as top priorities in any business and economic climate. Ultimately, legal departments, like other parts of your business, need to communicate how the team is driving value and contributing to the success of the organisation.

Leveraging technology and data to help you achieve these goals is becoming standard for many in-house teams. Technology such as automated matter management and spend management is now an intrinsic part of any efficient, forward-thinking legal department. While they provide full visibility over legal matters and help to better track costs and external counsel spend, the real worth in such tools is the data reporting and analytics functionality. This can provide valuable insights into the impact of proposed rates for outside counsel before you enter negotiations with your firms, it can also reveal how client relationships have evolved and expose areas that require attention. Utilising this data can assist in analysing your legal department’s performance against industry benchmarks, ensuring that you have visibility over any gaps in your processes, and that your performance and service levels are truly best-in-class.

Gain transparency through analytics

Quality reporting and analytics of your matters and spend can let you know exactly what is happening in your department. Transforming raw data into a readable formats and reports can assist in breaking down budgets and spending, summarise key information, and identify developing trends in your workflow. To drive your legal department’s priorities and your wider organisation’s business goals, data should be at the heart of strategic decision-making. The ability to visualise and analyse your legal department’s critical metrics in real time enables you to work smarter, better measure exposure and predict where problems may emerge, enabling you to deploy resources much more optimally. All of which supports smarter decision-making on the way to demonstrating to your organisation’s leadership how your department and outside law firms are performing and providing value.

In a business world where departments and business units compete for resources, you need to be able to determine whether budgetary expectations have been met and, if not, explain why. The ability to accurately track your budget and control spend on outside counsel is, simply stated, invaluable to your organisation. Tracking the right metrics is pivotal to you making solid legal procurement decisions and enabling intelligent negotiations. By analysing your legal department’s data on overall spend by law firm, you can identify opportunities to reallocate spend and determine whether you are receiving sufficient value. Data can help you understand fluctuations in spend over time, enabling identification of problems or trends that may contribute to increased spend and thus empowering you to take proactive steps to address or prevent them in the future.

Improve your workflows and processes

Serving your internal clients can also benefit from data-driven decisions will also help to facilitate day-to-day workflows and processes. Tracking performance is extremely important, but it’s equally important to capture lessons learned that will allow your legal department to build up a repository of information on the types of matters you deal with regularly. Whether it’s certain types of contracts that you regularly negotiate, common types of litigation cases, or dealing with regulations and legislation specific to your industry—collecting and sharing knowledge and lessons learned makes for a more efficient and effective legal department. By tracking the number of contracts reviewed or generated, the number of claims over a certain period, or the number of active matters, this information can help to give you a snapshot of which units within your organisation are benefiting from legal department work and spend. Utilising data is the optimal way to offer a true picture of the valuable work being done within your legal department.

Because of the mounting pressures that your legal department and organisation faces—utilising data to measure your in-house legal team’s value is more important than ever. Combined with automated matter management and spend management, data analytics and reporting can help to cement your legal department’s position within the business as one that works smarter and more effectively, provides a best-in-class service to its internal and external clients, and is a valued facilitator of achieving commercial and strategic goals.

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