Communicating the Value
Metrics help executives and directors to understand why and how the role of the LD is key for the company. By increasing the visibility of the Legal function, metrics also help increase its influence within the company.
It is up to the LD to identify the proper metrics—and they are not all of a financial nature—in order for its contribution to be easily understood both by the leadership team and the Board of Directors. Should LDs limit themselves to metrics that are exclusively their own, communication could become challenging. Legal KPIs have to be defined with this in mind: they need to be shared—and also consolidated into the global KPIs of the com- pany—and must therefore be easy to share. It may happen that the LD's internal reporting presents certain shortcomings: whenever it provides the leadership team (or equivalent) with a report of more than 30 pages for example, highlighting ongoing/successful/unsuccessful litigations, the number of projects or contracts managed by members of the legal team, the list of law firms engaged and the amount of legal fees invoiced by such firms, the LD is simply revealing how high its current workload is and how it steers its activities. Yet, what does the LD actually want to demonstrate through such reporting? The significant amount of information and the fact that such information is not analyzed together with the strategic objectives of the company may significantly affect the capacity of others to properly understand the report produced by the LD. This is especially true whenever the addressees and stakeholders have little time to dedicate to such reports and therefore need reading material which is clear and easy to understand. Reporting by the LD on its own performance is an act of management—and therefore also an act of communication and even education. By demonstrating the value enabled by the Legal team based on “state-of-the-art” communication materials, KPIs ultimately allow it to achieve its aspiration to be a relevant and valuable business advisor within the company. In all cases, the value that LDs define and integrate as part of performance objectives and indicators needs to be properly aligned with the strategic goals of the company.2.3