In a previous blog post, my colleague Kevin Clem provided an overview of six unique maturity models that we laid out to participants in HBR’s educational program at CLOC’s 2018 Corporate Legal Operations Institute. Our invitation in that initial post was to study these models and conduct a self-evaluation to determine where your department fits, then challenge yourself to take your operations up a notch.
In this second post in our three-part series, we will dive into specific insights for how departments in the “Foundational” category can take the next step toward operating as an “Advanced” corporate law department.
I. Strategic Planning
There are a few concrete actions that a law department can take to progress to a more advanced state when it comes to strategic planning. First, expand the focus of your strategy to include stakeholders across the entirety of the department and outward to clients. This can be done with internal surveys to identify opportunities for improvement and client satisfaction surveys to gauge performance. Second, establish a metrics-driven planning approach and measure your progress (e.g., establish a preferred provider panel and drive 80% of our spend through those panel firms). Third, increase both the visibility and the accountability of the department. This can be achieved by enlisting a broader team of people in your planning process, establishing clear team and employee expectations, and sharing the final plan and quarterly progress reports with the broader department.
II. Financial Management
The key to advancing your department from the Foundational stage with respect to financial management issues is getting a clearer picture on your spending by benchmarking your department against peer companies when it comes to the core financial metrics for legal spending and staffing. First, understand the core set of metrics for internal and external financial management. This will allow you to benchmark where you stand today and then incorporate those numbers into your regular reporting. Second, ensure the proper tools and reporting are in place to monitor and manage your spend proactively. For example, most — if not all — external spend should be flowing through a centralized e-Billing platform and your standard metrics should be reported in a “push-button” format. And third, leverage technology to automate and enforce financial controls. This will require you to set clear criteria for when budgets are required, then use tools to enforce those requirements and assist in managing performance against them. Here is an illustrative example for consideration:
III. Vendor Management
If your department is still in the Foundational category when it comes to vendor management, there are three practical things you can do to make progress in the maturity model:
- Get to know your vendor data. Analyze the number of law firms and outside vendors you are using (including your spending with each and the mix of vendors by area of practice), benchmark some external metrics — such as the number of firms per $1 million in spending — so you can identify opportunities for consolidation, and utilize benchmarks to rank your outside vendors in areas such as rates and attorney satisfaction.
- Establish goals based on your metrics. Select specific and measurable targets that align with your analysis. For example, you may want to determine what percentage of your spending should be going to preferred firms, what level of increase you want to obtain in internal satisfaction scores, and a target decrease in billing cycle time.
- Enforce compliance with targets. Build reporting systems and tools to provide visibility on your progress against those vendor management goals, and then incorporate controls to monitor and enforce compliance with your pre-determined targets.
IV. Technology Management
This is perhaps the area in which there is the greatest variation in capabilities from one law department to the next. Indeed, there were several participants in our CLOC session who felt their department was Advanced in other categories addressed in the maturity models, but slipped to Foundational when it comes to technology management.
For those law departments seeking to take a step forward in this area, there are some important things you can do to make incremental progress this year. First, evaluate your current state and identify opportunities for improvement. This may require utilizing internal technology surveys to identify the largest gaps and prioritize implementations (or enhancements) based on real data for your users. Focus on opportunities for increased integration and reduced manual workflows. Second, establish a three-year technology plan, based on these prioritized items. Plan for the necessary effort, duration and costs, and then revisit the plan often so you can adjust your course as needed. Third, focus on continuous improvement. Develop a program to capture user feedback, prioritize enhancements on a regular basis that reflects that input, and execute refreshed versions of the internal technology survey each year so you have that annual feedback loop in place.
Moving your law department operations from “Foundational” to “Advanced” will not happen overnight, but just bite off a few specific action items in each of these four key areas and you will see progress take shape in the year ahead.
Stay tuned for the final post in our three-part series, when my colleagues Lauren Chung and Wafik Guirgis will offer practical suggestions for how to take the next step from operating as an “Advanced” to a “Mature” corporate law department.