LegalDashboard
The visualization of the legal function can be a starting point for configuring a legal dashboard. The term legal dashboard is used in a broad sense here: a support tool for legal management that grants insight into key aspects of the legal function through performance metrics for which data is periodically collected, thus providing a dynamic view on the legal function.
Most legal departments will have some performance metrics in place, at least on internal headcount and on legal spend. However, various surveys (cf. Blickstein 2015) indicate that most legal departments still have a long way to go in professionalizing their legal management in other areas. Configuring a legal dashboard that does not only focus on costs, but also on performance metrics that improve legal quality and thus enhance the legal function, is a first step towards professionalizing legal management. A dashboard can become more balanced and refined as management of the legal function professionalizes further. A basic legal dashboard should at least incorporate core legal issues: issues that are critical to mission and strategy of the organization. If Volkswagen were to set up a legal dashboard now, they would surely have to incorporate targets on complying with emission standards. For a research organization, non-disclosure agreements on a particular new product could be a core issue, for which a 100 % target may be desirable. For a financial institution, training all staff on new regulations may be essential. Once all core issues have been covered, the dashboard may be expanded to other areas.Information and data for the dashboard may be collected from a variety of systems, such as HR systems, procurement and contract databases. With the continuing digitalization of organizations, the possibilities of collecting important data without much effort will continue to grow in the coming years. Big data and preventive e-discovery techniques open up possibilities to use unstructured data as input.
Although objective data and performance indicators are essential elements of a legal dashboard, it is important to remain vigilant about whether they are truly representative of the actual state of the legal function and do not have unintended side-effects. Performance indicators always bear a risk of acting as so-called “perverse incentives”: producing results that are contrary to the intentions behind the indicator. Under French colonial rule, a bounty was introduced for rat tails in Vietnam, which did not lead to the extermination of rats, but to people breeding rats. In the context of a legal department, a performance indicator rewarding fast handling of claims could lead to a reduction in legal quality, or unwanted settlements.A critical approach is also important because performance indicators, even if not acting as perverse incentives, can have a ritualizing effect and create the illusion of being in control. The most important advantage of a legal dashboard is not insight into the state of the legal function that it offers, however valuable. The biggest plus is the constant communication within the legal department and between the legal department and other departments necessary to keep the dashboard up to date. This communication enables the legal department to be truly proactive, anticipate changes in strategy and external developments, and constantly attune its services to the needs of the organization. Quality management within organizations sometimes has a tendency to develop into “tick-box exercises”. The founding father of quality management, William Edwards Deming, would have been horrified, as he always stressed the importance of cooperation and collaboration as the most important precondition for true quality to emerge.
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