Published on:

Wisdom about law departments and metrics from a GC serving as an interim CEO

Tom Kilroy, the General Counsel of a UK company has another role: “For the past three months, I’ve occupied a line management rather than a legal role, as acting Chief Executive Officer of a publicly listed company with 4,200 employees, operating in over 100 countries and making hundreds of millions of dollars in annual sales.” He wrote a long piece on his blog, GC’s Eye View, May 20, 2012, about metrics. I have quoted it extensively below but also omitted large portions and interpolated a few responsive thoughts.

“After discussing metrics with a large number of senior legal colleagues over the past year, I’ve concluded that metrics are widely distrusted by the legal profession. The topic certainly polarizes opinions. The most common charge made against metrics is that they provide a reductivist view of an activity which involves complex interactions that aren’t really capable of or susceptible to numerical measurement, such as the giving of legal advice.” [two paragraphs omitted]

[Rees Morrison: To state a person’s weight could be “reductivist” but it is more a description of one aspect that says what it says, and doesn’t claim to encompass the whole of the person’s being.]

“But, in business management roles, almost everyone believes that metrics and their variance can bring insight. I want to repeat those three words … can bring insight. It’s important to understand that metrics are not, in themselves, insight. But they can facilitate insight. [omitted portion]

So, when we all know that metrics are so widely used by others, why do lawyers remain suspicious of them? I think the answer lies in a misunderstanding that you most commonly see between accountants and lawyers. Accountants believe that words (for example in a contract) are very precise. They will often seek a definitive legal opinion on their meaning. Lawyers know, from long experience, that words are malleable and can have different meanings. Meanwhile, lawyers are convinced that numbers are very precise and often take them at face value, whereas accountants know that numbers are malleable. You will often see accountants asking questions about the assumptions that underlie a set of numbers.” [paragraph omitted]

[Rees Morrison. A nice point. Anyone who works with numbers comes to realize how squishy they are. You do the best you can, acknowledge the mis-steps inherent in gathering and massaging numbers, and rely on medians, directional trends, transparency, and unceasing efforts to improve.].

“Some legal metrics are “internal” and will help the GC run the legal function, but not provide insight to business colleagues. An example might be the time it takes to process a contract into the department’s contract storage mechanism. Other metrics are “external”, useful to business colleagues. In a company relying heavily on export licenses, an example might include the measurement of cycle times in applying for and securing those licenses.

I don’t believe that many legal functions have metrics which are genuinely critical for running a business. If they did, legal functions would be generating more metrics. But legal teams could probably generate more useful metrics than business leaders currently realize, if GCs were prepared to offer them.

My advice to GCs is not to be defensive. You and your business colleagues may not know what a particular metric means. To decide, you’ll need insight. But metrics are a powerful tool in running any business and the legal function is no exception.”

[Rees Morrison: Metrics, good ones, should stimulate insights. Whether internal or external – and comparison benchmarks are most instructive to executives about the efficacy of the law department – law department metrics have a constructive role.]

Posted in:
Published on:

Comments are closed.