Although this might be considered as regretful, performance has become a kind of mantra in modern society, affecting all of us—whether individuals or organizations.

Companies are mainly affected by the increasing demand for performance: they are probably even largely contributing to this demand. Whereby this trend seems to dangerously dominate our life in general, focusing on performance may be seen as legitimate in the area of business: in an unstable and globalized environment where future is uncertain, there is hardly room for rentier models.

But what exactly does “performance” mean? Three different but complementary meanings are traditionally attributed to “performance”: (1) the execution of an action, (2) the outcome achieved, and (3) the successful achievement of it. In the business field, “performance” often refers to the extent to which something is accomplished according to the targeted objectives (i.e. effectiveness) as well as to the ability to perform under optimized conditions in terms of quality and costs (i.e. efficiency). For the purpose of this chapter, the term “performance” will be used to refer to the achievement of company objectives (whether such objectives are strategic or operational) as well as to the processes that enable such achievement.

Within companies, performance has become a common criterion for assessing value creation, and there is no reason for legal teams to remain excluded from such a pervasive development. Here are some of the basic reasons that should motivate general counsels to use KPIs:

1. Performance measurement has become a standard business practice. It is proba­bly the most basic consideration: “everyone is doing it, so we will too”. At least, it is about standardizing communication, which requires a certain level of normalization.

2. In-house legal counsels themselves increasingly tend to act, think and speak like their chief executives, chief financial officers, and any other company executives with responsibility for P&L. By sharing the same language and using the same tools, legal teams can properly reinforce their positioning as real business partners within the company.

3. There is ongoing pressure on LDs (like any other departments in business organizations) to reduce costs, improve efficiency and demonstrate value. It is also vital for LDs to cope with the need to be “smarter-better-faster”: in our fast­paced, changing and competitive business environment, LDs have no other choice than to embrace this significant transformation. This need to be “smarter-better-faster”, combined with the ongoing focus on reducing costs, has led to what Richard Susskind, in Tomorrow’s Lawyers (Oxford, 2013), calls the “More-for-Less Challenge”: deliver more and better legal services at a lower cost. Responding to all these challenges (by demonstrating that the LD does more for less) requires the increasing use of relevant tools and metrics.

LDs have certainly neither the need nor the interest to measure everything they do, but they have much to gain from using robust analytics to demonstrate their working efficiency and the effectiveness of their results, i.e. to what extent they contribute to strategic, operational and financial corporate goals.

This being said, the implementation of KPIs within LDs may serve different purposes (all of which answer the question: why measure?). KPIs can help LDs to:

• develop a self-diagnosis of the legal function and therefore improve its management;

• demonstrate and communicate the value generated by the legal team;

• improve LDs' effectiveness and efficiency;

• align Legal & Strategic objectives;

• reinforce the role, positioning and influence of the internal legal function.

Each of the above aims underpinning legal KPIs (except the last point— reinforcing the role, positioning and influence of the LD—which is the natural outcome of all the previous achievements) can be analyzed in more detail as follows:

2.1