6 Ways to Prove Your Legal Department Adds Value: A Modern Approach
Legal departments are no longer expected to be merely cost centers. Instead, they’re increasingly expected to demonstrate their value and contribute financially to the organization’s bottom line. General Counsels (GCs) now manage their departments much like a business within the business, where their customers include the C-Suite Executives, other departments, and even end-users. Disclaimer: we ALL know that there is only one client for an in-house lawyer: the entity.
To effectively show your department’s worth, consider focusing on several key areas. Whether you’re new to in-house practice, or seeking to enhance your existing reporting, here’s how you can showcase the value of your legal team:
1. Contract Reporting.
Your work on agreements offers a straightforward way to demonstrate your department’s value. If you haven’t been tracking metrics, start with basic data, such as the number and types of contracts, contract values, and turnaround times. Start with a simple spreadsheet, and as your department evolves, consider using tools like ALOE for real-time reporting.
2. Risk Management.
Data-driven risk management is a key expectation from the C-Suite. Yet, according to law.com, 68% of GCs report a lack of accurate, current information on legal risks. Keeping abreast of risks, and their potential consequences, is crucial. If budget constraints are an issue, link risk management and legal processes to tangible business outcomes to justify investments in technology that supports this reporting.
3. Governance and Compliance.
Reporting on governance and compliance highlights the critical aspects of your department’s work beyond contracts and litigation. Effective reporting in these areas demonstrates how your efforts support business continuity and mitigate potential disruptions, emphasizing the value of your department’s role in maintaining regulatory standards.
4. Litigation.
Litigation can showcase both challenges and opportunities. Transparency and systematic reporting are essential to keep stakeholders informed. Key points to cover include:
· The schedule and amount of outside legal fees.
· Strategies for risk mitigation.
· The potential costs of litigation and the impact of settlement options.
· Any savings achieved through strategic decisions.
Even when litigation requires spending, good reporting and strategic management can still highlight how your department has delivered value.
5. Intellectual Property (IP).
Your organization’s IP is a significant asset, whether you have an aggressive IP protection strategy with licensing revenue and enforcement, or simply consider the value of the entity’s trade secrets and business methods in your IP valuation. Regular reporting on IP value can illustrate how your department contributes to the organization’s overall worth. Provide insights into whether continuing to invest in existing IP, or pursuing new IP (patents, for example), is more cost-effective, and offer context on competitive value to aid strategic decision-making.
6. Client Satisfaction.
Client satisfaction is a critical measure of success for legal teams. While clients may not always agree with decisions, they should be satisfied with the service provided. Tailor your reporting to meet the needs of different stakeholders. Use client satisfaction surveys to gauge perceptions and incorporate your questions into broader company surveys to enhance response rates. Report on survey results and outline any adjustments based on feedback.
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· Understand your stakeholders and their information needs.
· Customize your reporting to fit different audiences.
· Establish a process for generating comprehensive reports.
· Justify legal tech investments by linking risk management to business outcomes.
· Regularly track and report on client satisfaction.
By focusing on these areas, you can effectively prove the value of your legal department and reinforce its strategic importance within the organization.
Schedule a demo and find out how you can use legal software with AI technology like ALOE to create seamless workflows, improve quality assurance, and maximize your team’s potential.
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