Skip to content

By the numbers: How metrics can help tell the in-house story

|Written By Jennifer Brown

CALGARY — Having tools to demonstrate the value legal brings to an organization can help in-house counsel tell their story and illustrate their contribution in an appealing way to a chief financial or operating officer.

Bindu Cudjoe, BMO and Kristi Lalach, Mark’s Work Wearhouse
Bindu Cudjoe and Kristi Lalach are all about the data. (Photo: Jennifer Brown)
When it’s not enough that in-house is taking on more legal work over time, some general counsel are advocating tracking spend and internal hours to paint an on-going story of performance.

Speaking Monday at the Alberta chapter of the Association of Corporate Counsel’s Law Department Leadership 2.0 conference, Kristi Lalach, vice president legal and compliance, FGL Sports Ltd & Mark’s Work Wearhouse Ltd., and Bindu Cudjoe, deputy general counsel and chief administrative officer at Bank of Montreal, addressed the ways they track what their departments are doing internally and with external counsel.

Lalach, based in Calgary, says tools such as billing and matter management, which FGL and Mark’s recently implemented, can help justify hiring and growth opportunities in a legal department. For example, engaging a real estate firm on a regular basis may signal the need for an additional person internally in that area of law.

“It gives me oversight and transparency. It allows me to understand what my lawyers are doing, what our compliance people are doing, and frankly it allows me to understand those parts of the business that engage external counsel themselves in terms of what they’re looking for advice on,” said Lalach.

“It also keeps the law firms honest, frankly. It’s a lot easier for me to dig down into the descriptors when I have it on an e-billing system,” says Lalach.

BMO has had an e-billing system for about three years that to-date has been largely used for work with external counsel. BMO bolted its e-billing system onto the accounts payable one to take in all things tagged as legal spend.

Where Cudjoe sees the bank taking its system to the next level is to use it to create “discipline for internal lawyers.” BMO has almost 200 lawyers globally — 120 in Toronto in Montreal. Its system requires there be a budget before the law firm can submit an invoice.

“One place for us to go is to ask how accurate were the budgets? Who is following the system, and who is doing it better?” she said.

The bank is also using the system for matter management to see how files are staffed and managed internally or externally.

Lalach also likes that with the e-billing system the detailed bills come to her and not directly to the accounts payable department.

“I felt there was a risk of privilege,” she said. “That doesn’t happen anymore because once I sign off the accounts payable department doesn’t see the long descriptors on the bills. That’s giving me a lot of comfort.”

Once you are getting numbers out of a system the next stage is often using the metrics to benchmark. Cudjoe noted a good place to start is using data to benchmark the department over time.

BMO compares data from the accounts payable department to the numbers in the e-billing system.

“There is no one system that puts those numbers together so it’s up to us to build a story that says, ‘This is what internal legal cost you over time and here is what external cost and the two together comprise an aggregate,’” she said. “I think you have to trust the data will tell you a story but you have to be open to interpreting it.”

The systems can also help when in-house counsel are confronted with the common refrain that “legal costs so much” or “legal keeps growing.”

“We measure things like the aggregate quantum of legal spend over a particular period of time and we break it down by line of business. We compare how much we spent externally with costs internally (headcount/salary/benefits),” she said.

While she doesn’t advocate for time tracking internally in the legal department, Cudjoe says there is important information to be gleaned from using systems to look at where resources are being used.

“I urge you to dig in and look at what are you area doing internally and where you are spending your time,” she said. “Are you actually able to get to projects or are you responding to fires? Maybe you are prioritizing things not important to the business.”

Be prepared that your metrics don’t back the story you’ve been telling, she added.

“Not because you were trying to be disingenuous but sometimes the numbers don’t hold true.”

For example, foreign exchange forecasts can throw off legal costs if you are paying firms in U.S. dollars. But that can prompt a question about whether you have the right mix of external Canadian versus American lawyers working on a matter.

“The numbers are really useful but they’re not a panacea. You do have to think critically about how you’re using them and who sees them,” she said.

The panel also explored the challenges of managing external counsel including having a common approach to risk management, understanding organizational values, and how to better handle the cost of litigation.

“There are things we stand for at FGL and at Mark’s that we can’t bend on — competition law is one of them. We are willing to take some risks in other areas. So that’s why a law firm knowing what we stand for is important to me because I don’t have time to read opinions that aren’t aligned with that,” said Lalach.

Cudjoe also noted the importance of “tell your story regularly.”

“Lawyers are well placed to tell that story thoughtfully, strategically, responding to the circumstances. So don’t get in the way — they are the facts behind your beautifully crafted speech.”


SPECIAL REPORTS



Save

SUBSCRIBE TO LEGAL FEEDS

BY EMAIL

AWARDS

  • clawbies 2015
    clawbies 2014
  • clawbies 2013
    clawbies 2012
  • clawbies 2011
    clawbies 2010