Please enjoy the Spanish verison of the blog below authored by Matías Avila Nores, Founder and Managing Partner, OneLegem.
It is a fact beyond dispute that the objective of the legal department or area is to advise the business units, the managementand guide them in all the legal issues that may exist to achieve their business objectives, minimizing risks. Modern legal departments, however, have recently come under pressure to provide a higher quality service. Whether they provide services directly to any of a company's business areas or whether the service is provided indirectly through an external legal firm or provider that they contract, delivering the service on time and within budget is key. In this way, with the obvious and necessary knowledge of the applicable law in relation to any matter that they carry out, there are two elements that the legal departments have begun to consider essential to fulfill their objectives, and neither of these is legal.
The logistics is related to evaluations and decisions taken time to (i) analyze the legal and business impact of any legal issue, (ii) the internal management or requiring an external advisor to the management of a subject and (iii) bring such matters to completion, ensuring that they are managed from start to finish and in reasonable times, aligned with the business area in question. In this way, legal logistics is related to everything that happens from the moment an issue is referred to the legal department or external office, until the moment it concludes. On-time referral and return decisions are essential here.
The Metrics , likewise, are related to measuring the performance of the law firm, external provider (or the legal department) in relation to the management of the matters assigned to it. The metrics provide valuable information regarding the efficiency and quality of the service received, ultimately determining if the choice was correct. Whether efficiency or quality is paramount, metrics provide hard numbers in relation to the adequate performance of everything that allows the decision to derive to be measured. The metrics therefore allow us to analyze the data regarding how good the quality of the logistics decision was made.
The metrics must be established in relation to certain objectives, so that the standards to be achieved can be set. If goals are set across the entire spectrum of legal work, it is easier to measure the performance of an external legal provider and the department itself. In this sense, communicationIt is closely linked to the metrics because once the expectations are set, it is decisive that the legal departments work with the external legal provider to communicate what their goals are and work on a plan to achieve that it meets the expected performance. This is essential to maintain since many external legal service providers do not have the gymnastics or do not make adequate or sufficient focus on the metrics and therefore the guidance of the legal area is very important.
In relation to this, there are at least three essential questions that must be answered in order to calibrate and sign the expectations or standards:
- What areas of external legal vendor derivative work should be subject to metrics?
The metrics to be used to measure the performance of an external provider should consider any type of derived tasks.
- What should the metrics focus on, quantity or quality?
This certainly depends on the nature of the issues or issues arising. Those where cost and response time are essential will focus on efficiency metrics. And those related to analysis and depth, in quality.
- What are the most relevant metrics? These are the most relevant performance metrics:
- Legal expense metrics , through which the billing records of law firms and external providers are measured and monitored in relation to their hours, cost and seniority of the professionals involved in the derivative work, and with which these variables are crossed with (x) the accuracy of the information provided by the law firm, and (y) the expectations established by the legal department.
- Issue management metrics , in relation to (i) day-to-day issues, in which the response time and the cost related to the management from beginning to end of the contractual documents in relation to the drafting is measured , review, negotiation and closure, (ii) projects that comprise a large volume of documents, in which the speed and efficiency with which they are analyzed, the response time and cost are measured, and (iii) the topics or issues strategic, in which the quality of the work provided is measured against the seniority of the professionals involved. It should be noted that while (i) and (ii) refer to cost and time metrics, (iii) it is quality oriented.
- Case management metrics , by means of which the processing time of any derived legal matter is measured, using intuitive and easy-to-use platforms that are already seen in the market, and avoiding reactive but proactive action.
All of this is fed and fed back by KPIs ( Key Performance Indicators ), which provide a delivery standard that the external legal provider must achieve through the creation of processes or other patterns to achieve established and communicated goals. Ultimately, this results in being able to preset, as far as possible and with the passage of time and experience, the response times and costs for most of the derived legal issues, which will allow the legal areas to meet their goals. efficiently. Thus, any legal area in time will be able to know what is the standard of response and cost of a certain variety of contracts, lawsuits or other externally derived matters.
The metrics are ultimately valuable elements to be used to enhance the performance of both external legal providers and the legal area, thus adding value to the business areas and integrating legal knowledge with management of response times and costs.