Balancing Your Legal ScorecardA Performance Management Tool For The Legal Department
Introduction
Every organization recognizes
importance of measuring performance. It provides means of monitoring achievement of organization’s strategy. As such, it is a vital means of motivation.
That, at least is theory!
However, in reality, many organizations have yet to implement a performance measurement system that adequately fits bill, especially in legal department. They, instead, focus their attention on “after horse is out of barn”, like outcomes and financial performance. Thus, these organizations pay price:
•Most legal matter indicators and financial indicators are backward looking – it has been likened to “steering ship by watching wake” •Legal department performance and financial performance tends to be measured over short term and induces short term ‘fixes’ •Legal department measures and financial measures alone cannot communicate organization’s strategy and priorities to its managers and staff
Although, following approach may be applied to many departments within organization, this article focuses our attention on corporate legal department. As we have found that it is disparagingly referred to by senior management as a “necessary evil”.
With that said, corporate legal departments are now being required to do more than win cases and manage costs. They have a dual mandate, which includes adding value to corporation while providing successful, cost effective legal work to their corporate client. Adding value includes qualitative as well as quantitative measures.
As such, what corporate legal managers increasingly need is a performance measurement capability that supports a long term, forward-thinking strategic view. They need a performance measurement framework that provides a view across a range of measures that encompass all of key issues for continued financial success of their organization. A framework that itself helps improve performance by changing what people do, one that:
