General counsel deciding on where to take their legal department need to rely on more than their gut.
That was the take-away from a session titled, "What have you done for us lately?" that took place last week as part of the Association of Corporate Counsel Colorado's Fall Frenzy event.
"You're going to have your gut feeling, sure," said Bernadette Bulacan, who speaks on legal department technology for Thomson Reuters. "But you can better advocate for your department if you have metrics to demonstrate that need."
Her talk centered on how to utilize statistics in graphic form to deliver better reporting to management, or, as she said, "how to showcase your value to the C-level." She said when she went in-house, she didn't speak the same language as the business development personnel or the head of sales.
The first step toward speaking that language is collecting concrete numbers about the department. Bulacan displayed a chart she received from a current general counsel that listed 16 data points, including total matters and total spending, broken down by the previous month, year-to-date and the previous year's totals.
Asked if anyone currently collected this data, none of the 50 or so in the audience raised their hands.
"It's daunting," she said. "But broken down, he has a good sense of what his legal landscape looks like."
And that can translate to better business decisions that make general counsel look good to the higher-ups on every front of the business from litigation management to employment to outside counsel choices.
Bulacan put up a bar graph produced by an in-house lawyer that showed litigation trends by division. She noted a point where the bars started going down. It was roughly the same time counsel implemented a series of trainings on limiting liability.
As for litigation, growing a numbers-based decision process can help with employment matters as well. In another graph, one line represented human-resource matters, another represented employee trainings. As the line for trainings went up, HR matters dropped dramatically.
"The picture tells the story," she said.
Those two examples illustrated how charts can help counsel make the case for future trainings.
But they can also help make decisions in the moment. She recalled how one general counsel she spoke with wanted the company to fire its star salesman. But all upper-management saw was the employee's sales numbers, "which were superstar." So the general counsel gathered numbers on how much the salesman was costing the company for outside counsel and HR matters. Taking into account those figures, the salesman was actually at the bottom of the sales team. The company ended up letting him go.
"There are hard decisions to make, and arming ourselves with great numbers can help protect us," Bulacan said.
She said the best ways to collect data are to create practical workflows to regularly collect from all employees on all projects and to connect directly with outside counsel through e-billing and other matter-management software. Before taking the numbers to the chief financial officer, however, she recommended previewing the results with business clients to verify the accuracy.
Maybe the collection doesn't produce results right away.
"But even if we're able to move the needle ever so slightly," she said, "we're better able to speak the language of our CFOs, we'll feel better about how we manage our legal departments."
Reprinted with permission from the September 17, 2012 Internet edition of Law Week Colorado, Vol. 10, No. 38. Further duplication without permission is prohibited.