Performance indicators: how important are they for the legal department?

“If you can't measure it, you can't manage it.”Peter Drucker??

There is no leadership spirit, goodwill, and hard work that can replace results-oriented management. And there are no results with no data. Specific paths must be taken to get to the targeted outcome of data-driven management. Imagine being able to keep track of how much was paid in labor settlements in a specific county and year. It is about this journey of turning data into information. That's what we will address in this article.

We must first define, even if loosely, what "performance indicators" are. Performance Indicators, Key Performance Indicators, or KPIs (key points of interest) are metrics organizations use to evaluate their activities' performance and efficiency. Commonly, these indicators are translated into targets or parameters in the form of absolute numbers or percentages and monitored through a graphic layout.? It is also typical the grouping of correlated indicators together in the form of a dashboard or table of indicators.

Fig.1 (Paralegal Report, quantitative dashboard of processes registered in Legal One)

Why are performance indicators valuable? Because without them, you don't know when, how, and whether you will eventually reach your goal, whatever it may be. It doesn't mean that you can't "work" without indicators. Actually, this is still the case for most legal organizations, public or private, corporate or law firm, small or large. Every day, hundreds of thousands of legal activities are performed in Brazil. However, a tiny amount of such reality is converted into data, given a structure, meaning, and purpose, so that it can be turned into accurate information. Most of the time, what happens is the completion of an activity, generally a deadline tied to a process or administrative demand, and then moving on to the next one. There is no thorough consideration of the data set produced and its analytical richness. The focus is on task execution rather than on strategy and planning. As a result, tasks are executed mechanically, and innovation is rarely ever noticed along the process.

?Fig. 2 ( Quality indicators with accredited office comparisons)

Legend: The figure's indicators are intended to qualitatively evaluate the results of two accredited law firms. Considering a minimum target for the number of agreements and a maximum target for the number of convictions, we have established a comparison scale, and the differences between these two are shown.

After analyzing the information presented, the conclusion is that the A & B office is stable organization-wise and keeps a standard and results follow up at all times.

On the other hand, the C & D office does not have a standard of performance and results follow-up, revealing an organizational difficulty and only submitting results when required or demanded.

This basic framework for the legal sector in Brazil, including corporate legal, is counterproductive, expensive, inefficient, and failure-oriented. There is no more room for random case management, no matter how many hours we work a day in our legal practice. We must understand that work does not mean efficiency; it is not just a matter of more working hours and more headcount but adopting management based on data and outcomes. No more "You see"! There is no corporate board that is willing to listen to a medley of adverse statements and half-baked conclusions to justify errors. We need to raise the bar in our profession, taking the legal department to the same level as other company areas such as finance, marketing, commercial, operations, etc., which have their perfect figures. Good or bad, they have information and can set up presentations with a beginning, middle, and end, bring along logical conclusions and justify their mistakes, achievements, and decision making through data.?

Remember: “Without data, you're just another person with an opinion''. W. Edward Deming.

The criticism is harsh but honest. The good part is that there is a solution to relieve this pain. You can put an end to the travails of lax data management, strengthen your department's results and image, and at the same time jumpstart your legal career. Lawyers capable of drafting briefs, conducting hearings, and submitting opinions have not been a novelty for a while. However, there are very few analytical lawyers capable of running a legal effectiveness think tank, setting up processes and flows that optimize and rate the data generation, and mastering business intelligence tools. The professional of the future is analytical. Those who have data at their disposal and are unable to cross-reference it for the best outcome are running a significant risk of being replaced by professionals who have already developed this ability.

Where to start? Culture and Strategy, Systems and People. First, establish a data-driven culture in your legal department. This is not the work of a lone wolf - you need your team's support and at least your leadership's support. It shouldn't be challenging to persuade your board of directors that the legal department needs to adopt data-driven management. If convincing them is hard, change jobs. That mindset will only slow down your career, and there is no time to waste. Culture is not impactful jargon and a team photo to "slay" on Instagram. Culture is strategy combined with recurrence, presence, and purpose consistency. Assess your woes and use a simple rule to rate them: cost x benefits. What critical points require less effort to generate the most significant result? You can brainstorm with your team, select the best ideas, apply this simple rule, and start working on the ones that have the biggest impact with the least organizational effort. Don't start a plan that attempts to tackle all the problems simultaneously; create a clear sequence of activities, understand your current level, and state a clear, attainable goal that you can monitor through indicators.

Fig. 3 (One Page Executive Report, dashboard with the? most important indicators)

Legend: An executive dashboard is meant to be objective and straightforward; one page is optimal. One Page, the key indicators should fit on this page so that the executive can quickly get a brief assessment of the results and manage the legal department accurately. Slides presentations are outdated. Assessing one indicator at a time takes time, and it makes it hard to get the whole picture.

According to the Dashboard in the figure above, we made the " Bullet Points" topics, using the legal management principles by indicators, as shown below:

Volumetry for understanding macro-management issues such as active caseload, status, types, and? the total provision.?

Formulation, in this case, assesses the first topic's quantitative division into a geographical (space) and administrative (standard in most companies) analysis.

Evolution aims to understand the way this information was gathered in specific periods (time), distribution analysis, and completion.

Qualitative assessing the result of all the effort invested by the legal department is the most crucial thing; no work is justified if it does not have a satisfactory result tied to it. Assessing this effort payoff is vital, and it's a question that every 100 out of 100 executives are likely to ask. We have analyzed the result regarding the number of convictions and settlements in a given period and the amounts paid in that same period.

Each economic segment has its own more specific indicators, but the dashboard above would hardly fail to meet any of them. The main thing is to have a primary benchmark and then evolve this as the information is increasingly integrated.

Your ultimate ally on this journey is your legal department management system. None of what we have been discussing is new in the business world. Scientific management emerged at the turn of the 19th century, and most of the current maxims were set during the 1970s and 1980s. The significant change is not in knowledge but in systematization, easier access to databases, processing capacity, and more user-friendly platforms for the general public.? This is not an elective item; creating and maintaining a results-oriented legal department through management indicators with an excel spreadsheet and notes in a notebook is nearly an impossible task, or at least much more burdensome than using a good Legal ERP system integrated with a powerful Business Intelligence module.

The challenge here is finding the appropriate system that allows management by indicators. Most systems on the market are good organizers for the main activity flows of a legal process and consulting activities, such as time entries. However, the organization in folders, typical of the procedural setting, brings little visibility to the central management or the management of essential parts. Try posing some "basic questions" to the system: how much was paid in labor agreements in the district of Campinas for Alfa Company during the third quarter of 2020? Have you recalled the beginning of this article? Now, request it to compare this outcome with the fourth quarter of the same year; include another district in Ribeir?o Preto/SP for the sake of comparison, also have the value variable ordered, request it to change the graphic style to stacked columns, and change the color palette to those of the company's brand guidelines. Finally, request this data be updated daily, shareable through the platform with third parties not members of the legal department, and converted into a "one-page report" executive report format. That's right... things can and will get more complex when you take a few steps further on the journey from data to information.

??Fig. 4 (Geographic comparative - labor agreements in the state of S?o Paulo)?

Legend: The above comparison illustrates how Legal One Analytics, using Business Intelligence methods, solves the problem of information flow that the case management system cannot solve on its own.

Information's raw material is data; Legal One has the task of structuring the data and managing it one at a time, a role accomplished with mastery. Extracting complete information from one piece of data at a time is impossible, though, so Legal One Analytics steps in and presents an analysis of that structured data and converts that into information for the recipient to have a good enough understanding to make better decisions.

The task of merging BI with process management systems is not a trivial one, first because the primary purposes are different. Second, because of all the technologies utilized, finally, the demand for data analytics emerged after most of the management platforms were in place. Changing the entire systemic architecture to create a new system practically was not a simple task. An alternative would be to use market BI systems. No doubt they work. However, in most cases, they must be complemented by a "headcount" specialized in data science, which is a resource that few departments can afford. And even if you have such a professional in the team, it is often a third party that does not belong to the legal world, a lot of time is lost in parameter setting, there is no actual technology transfer to the department, and when this professional is no longer in the area, the project collapses.

It was so huge of a task that it took a global leader in the industry, Thomson Reuters, to team up with a startup specialized in legal data, Juristec+, to unite a team of PhDs in Computer Science, Mathematics, legal managers, administrators, financiers and designers, almost three years of research and testing to develop the first Business Intelligence system in Brazil and probably one of the most sophisticated in the world for the legal sector. We are talking about Legal One and its BI module, Legal One Analytics. It is the first system in the field that, in addition to allowing the unrestricted creation of indicators and dashboards, has integrated legal metrics and ready-to-use legal intelligence through a menu of templates covering the main management verticals in the legal area. The platform teaches the user to navigate the BI world and become a true Legal data scientist.

To wrap this up, you will need exactly that: capable professionals. People who are committed to changing their conceptions about the Legal organization, briefs, hearings, and memorials will continue to be indispensable; legal knowledge is the core of our work. Nevertheless, the best process specialist in the world could be a rather average case manager. A thesis solves a case.

Rui Caminha.