MetricsandAnaly/csMaturityModel:MovingfromtheEarlytoIntermediateStage

ACCWebcastMay24,2018

WorkingGroupSponsor:

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Agenda: - Welcome & Panel Introductions

- Session Objectives & Industry Dynamics

- Introduction to Metrics and Analytics / Recent Trends

- Panel Experiences: What does it mean for Legal?

- Metrics Framework

- Toolkit Overview

- Tips for Success

- Q & A

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Working Group Members:

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LaurenChung*ManagingDirectorHBRConsulDng

Ma>Harmon*ManagerHBRConsulDng

Aus/nHydeManagerHBRConsulDng

DanYoung*ACCLegalOperaDonsMetrics&AnalyDcsCo-ChairLegalOperaDonsManagerBostonScienDfic

JayWimberley*LegalOperaDonsManagerAbboKLaboratories

LaurieHansen*ACCLegalOperaDonsMetrics&AnalyDcsChair&LegalOperaDonsDirectorMutualofOmahaInsurance

VanessaLozziAVP,SeniorLegalTechnologyandLitSupportAdministratorFlagstarBank

EwaBoguckiLegalOperaDonsManagerAbbVie

SamRanganathanACCLegalOperaDonsCo-Chair

MaryJoGeorgenAssistantCorporateSecretary&Director,LegalOperaDonsCDWCorporaDon

TrevorTokerGlobalLiDgaDonPricing&FinancialAnalystShell

JoanTagliareniLegalOperaDonsDirectorAkamaiTechnologies

*Panelist

Objectives and takeaways for today’s session:

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1Understand the

importance and benefits of metrics and analytics

2Learn what to capture and

how to most efficiently leverage data to manage

your department

3Gain insight into tools to

assist in capturing, analyzing and reporting

your department’s performance

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Industry Dynamics •  Law departments face intense pressure to do more with less.

•  For many, the demand for legal services has increased but the resources to fill the needs have decreased.

•  The challenges on the minds of law department leaders today include:

ü  Cost control and budget constraints

ü  Maximizing efficiency and optimizing internal and external resources

ü  Enhancing legal service delivery and strengthening client alignment

ü  Leveraging technology to enable data-driven decision making

ü  Measuring performance and demonstrating value

ü  Compliance and legal risk management (including law firm data security risks)

ü  Running the law department “like a business”

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What do we mean by Metrics + Analytics?

Analytics Process of transforming data into insights for the purpose of making better decisions. The goal of analytics is to gain knowledge which can be used to make improvements or changes.

Metrics Standards of measurement by which efficiency, performance, progress, or quality of a plan, process, or product can be assessed.

“What”

“Sowhat”

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Poll #1

Where does your department fall in this Maturity Model?

Possible Answers (select one):

1.) Early 2.) Intermediate

3.) Advanced

Why Now? Survey¹ says…

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¹Conductedat2018ConseroConference–Pasadena,CA

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Early Intermediate Advanced

90%

78%

Poll#1

Poll#2

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Create Visibility Expose patterns, trends, correlations that may not be easily discovered or tracked.

Gauge Performance

Show progress and improvement – internally and compared to peers.

Identify Opportunities

Uncover opportunities for improvement and support establishment of goals.

Drive Call to Action

Drive discussion and serve as a basis for key action steps.

Why Metrics and Data Analytics Matter

Objectivity Bring objectivity to your assessment of your department’s performance

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Our Panelists will now describe where they are / their experience & road map using this outline:

Panel Experiences

•  Self-assessed maturity level (early, intermediate, etc.)

•  Key objectives, what we have implemented thus far and the reception from the department

•  Future plans to take things to the next level

…stay tuned for Tips for Success (at end of presentation)

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DanYoungLegalOpera/onsManager

BostonScien/fic

Metrics&Analy/csMaturityLevel Early

CurrentState

•  Movingtoanewe-billingplaborminQ32018•  Currentlytrackingforecasttobudget,totaldepartmentandbyindividual

pracDcearea

•  NewMetrics:

•  MaKerbudget(over,under,ontarget)

•  OutsideCounselusage-quarterlyandyearly(forecastvsactual)•  %ofrevenue

•  Savingsandcostavoidance

•  Firmscorecards

Planstotaketothenextlevel

•  Developmentofdashboards•  PracDceGroup

•  Regional

•  LegalOperaDons

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JayWimberleyManager,Opera/ons–Legal&Compliance

Abbo>

Metrics&Analy/csMaturityLevel Intermediate

CurrentState

•  Departmenthasanestablishede-billingsystem•  ConsistentdatacollecDon

•  Haveproducedandsharedmetricsforanumberofyearsnow;self-servicemodelfordepartmentstaff

•  UseMMsystem’sbuilt-inreporDng;AlsobuiltdashboardsusingdatavisualizaDontools

•  IntegratedindustrybenchmarkingtobringperspecDve

Planstotaketothenextlevel

•  Expandaccessibilityofmetricdatainwaysthatarerelevanttoourlegalteams

•  IntegratefirmevaluaDonprocessesintoourdecisionprocesses

•  ConDnuetoevaluatecurrenttoolsandnewertechnologies

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LaurieHansenDirector,LegalOpera/ons

MutualofOmaha

Metrics&Analy/csMaturityLevel Intermediate

CurrentState

•  EarlyadopterofelectronicmaKermanagementsystem(1996);Migratedtocurrentsystemin2003andwillbemovingtonewsysteminQ4,2018.

•  Noe-billingsystem–invoicesprocessmanually,inputintoMMsystem.

•  Currentlycaptureapproximately300+fieldsofdata,includingDmekeepinganddataforareasoutsideofthelawdepartment(regulatoryandactuary)

•  Developedanduse~90reportsthatsliceanddicedatainvariousways.•  DataanalyDcshasbeenchallengingandweneededtofindawaytoanalyze

ourdatainameaningfulwaythatwouldtrulyaddvalue.

Planstotaketothenextlevel

•  BeganimplementaDonofanalyDcsplaborm(HBR’sCounselCommand)inearly2018

•  LeverageindustrybenchmarksaccessiblefromwithinanalyDcsplaborm

•  WillhelptoaddresstheaforemenDonedchallenges.

OverallPerformanceandValueMetrics

Demand

Resourcing

SpendQuality

Results

Metrics + Performance Management Framework

Demand:Measuringwhatcomes inandoutof the lawdepartment intermsofrequests,bytype,bywhom,etc.

Resourcing:Measuringwhodoeswhatworkanddeterminingthebestfit(internalorexternal)resourcingtosupportit

Spend:Measuringhowmuchisspentinternallyandexternally.

Quality: Measuring the businesses’ saDsfacDon of how the serviceswereperformed.

Results:Measuring the value contributed to thebusiness, in termsofoutcomes, cost savings/avoidanceor revenuegeneratedasa resultoflegalservices.

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IDENTIFY REPORT APPLY

PRIORITIZE MONITOR

Basedonperformance,determinekeyareasofopportunitytopursueandidenDfyacDonablestepstoachievegoal.

Reportonperformanceofthekeymetricsonaperiodicbasisinternallyandexternallytocompanyleadership.

Defineyourlawdepartment’sobjecDvesforperformancemanagement–whatdoyouwanttomeasureandwhy?

Trackperformanceonaregularbasis–monthly,quarterly,annually.

Useexternalbenchmarkingresourcesasapointofcomparisonandinternalprocessyearoveryear.

DeterminethemostrelevantkeymetricsandprioriDzebasedonalignmentwithcompanyanddepartmentperformancemanagementobjecDves

Metrics + Performance Management Process

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Capture the Data Points

Calculate the Metrics

Report the Results

•  Totaloutsidecounselspending

•  Totalinsidelegalspending(compensaDon,tech,etc.)

•  Averagechargeablehours(calculateinternallyORtakefromabenchmarkingsurvey)

•  Totaloutsidecounselfeesbasedonhourlyrates

•  TotaloutsidecounselfeesbasedonAFAarrangements

•  Total/outside/insidelegalspendingasapercentofrevenue

•  %ofinternalvs.externalspend

•  Fully-loadedinsidehourlycost

•  %ofhourlyspendvs.AFAs

•  CirculatedreportsonDmedbasis

•  Dashboardviewswithontheflyaccess

•  PeriodicpresentaDonofresultstoBusinessandInternalLegalLeadership

Toolkit + Spend

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*Advancedmetric

Capture the Data Points

Calculate the Metrics

Report the Results

•  #ofOpen&ClosedCasesbyMaKerType

•  #ofCasesonBudget

•  #ofCasesunderBudget

•  #ofCasesoverBudget

•  TotalBudget

•  AnnualSpend

•  %ofOpenvs.ClosedCasesbyMaDerType(considerCycle/me)

•  %On/Under/OverBudget•  TotalBudgetvs.Actual

•  CirculatedreportsonDmedbasis

•  Dashboardviewswithontheflyaccess

•  PeriodicpresentaDonofresultstoBusinessUnits,OutsideCounselandInternalLegalLeadership

Toolkit + Results

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*Advancedmetric

Capture the Data Points

Calculate the Metrics

Report the Results

•  #ofAnnualRequestsbyRequestType

•  #ofDaysfromRequesttoClosurebyRequestType

•  #ofLegalRequestsbyPriorityLevel(High–Med–Low)

•  AverageRequestsPerMonth

•  AverageCycleTimetoCompleteRequests

•  %ofTotalRequestsbyPriorityLevel

•  CirculatedreportsonDmedbasis

•  Dashboardviewswithontheflyaccess

•  PeriodicpresentaDonofresultstoBusinessUnits,andInternalLegalLeadership

Toolkit + Demand

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*Advancedmetric

Capture the Data Points

Calculate the Metrics

Report the Results

•  #ofLawyers/Paralegals/Admins/OtherLegalStaff

•  #ofMaKersHandledbyInternalStaff

•  #ofMaKersHandledbyExternalServiceProviders

•  #ofMaKersHandledbyPreferredProviders

•  NumberofLawyers/TotalLegalStaffPer$BRevenue

•  RaDoofParalegals/AdminstoLawyers

•  %ofMaKersHandledInternallyvs.Externally

•  %ofTotalMaDersHandledbyPreferredProviders(outsidecounsel)

•  CirculatedreportsonDmedbasis

•  Dashboardviewswithontheflyaccess

•  PeriodicpresentaDonofresultstoBusinessUnits,andInternalLegalLeadership

Toolkit + Resourcing

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*Advancedmetric

Capture the Data Points

Calculate the Metrics

Report the Results

•  BusinessUnitsSaDsfacDonwithLawDepartmentbyCategory(e.g.CommunicaDon,Responsiveness,BusinessAcumen)

•  LawDepartment’sSaDsfacDonwithOutsideCounselbyCategory(e.g.FinancialManagement,MaKerManagement,RelaDonshipManagement)

•  %ofBusinessUnitsSa/sfiedwithLawDepartmentinTotal

•  %ofBusinessUnitsSa/sfac/onbyCategory

•  %ofOutsideCounselbyLevelofLawDepartmentSa/sfac/oninTotal

•  %ofOutsideCounselbyLevelofLawDepartmentSa/sfac/onbyCategory

•  CirculatedreportsonDmedbasis

•  Dashboardviewswithontheflyaccess

•  PeriodicpresentaDonofresultstoBusinessUnits,OutsideCounselandInternalLegalLeadership

Toolkit + Quality

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*Advancedmetric

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Poll #2

Which of the 5 Metrics does your department currently generate?

Possible Answers (multi-select):

1.) Spend 2.) Results 3.) Demand

4.) Resourcing 5.) Results

Monitor + Apply

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*TheHBRLawDepartmentSurveyiscurrentlyunderway.Formoreinforma/on,visitwww.lawdepartmentsurvey.com.

Par5cipate in Industry Surveys

Compare with Right Peers

Leverage the Results

•  Onanannualbasis,parDcipateinindustrybenchmarkingstudiesthatprovidecomparisondataonthekeymetricsyourlawdepartmentistracking.

•  ExternalbenchmarkingshouldbecomearegulardisciplineandacoreaspectofaneffecDveperformancemanagementprogram.

•  Ensureyouarecomparingyourdepartment’sperformanceagainstrelevantexternalpeers,considering:

•  Industry•  Companysize

•  Lawdepartmentsize

•  Geography

•  Leveragetheresultstogainabaselineunderstandingofhowyourlawdepartmentcomparestopeers.

•  UsetheresultstocommunicatethevalueofthelegalfuncDon,defendresourceallocaDonormakethecaseforchange.

Legal Department Metrics Tool Goals 1.   Collec/on:Withinthetool,providethelegaldepartmentwithalistdatapointsthat

supportthemetricstobegenerated.

2.   Input:Provideamechanismtocapturethedatapoints.

3.   Presenta/on:AverinpuwngtheinformaDon,provideameanstogeneraDngastandard,oneslideview(dashboard)thatpresentsthekeymetricsvisually.

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Tips for Success •  Understandyourdata(e.g.gaps,sources)beforedeterminingyourmetrics

•  GetalllevelsinvolvedandobtainGCandSr.Staffbacking

•  Donotpanicifyourmetricstellanunexpectedstory…challengeyourassumpDons!

•  Bemeaningful,bothwithwhatyoucollectandhowyoushareit

•  Don’tbeafraidtoquesDontheoldwayofdoingthings

•  Communicatefrequentlywithstatusreportsandfeedback

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Ques/ons?