"A lost coin is found by means of a candle; the deepest truth is found by means of a simple story." - Anthony De Mello
Storytelling evokes a strong neurological response in people. This is not a particular surprise, humans have been communicating through stories of upwards of 20,000 years we're hard-wired to respond to them. Research indicates that stories can cause our brains produce the stress hormone cortisol which allows us to focus, while happy endings and humor can create connection and empathy, releasing dopamine. This is why storytelling is such a powerful tool, these responses help create memory, whereas simple stats often produce only glazed eyes.
Telling your legal department story is no different, though making it as interesting as an Elmore Leonard novel can be a challenging task. Here are some tips on figuring out what story you should tell, and ways to go about telling it.
1. Staring at the Blank Page: What Story Should You Tell?
The first step in understanding how to tell you legal department's story is understanding what the legal department's stakeholders consider key performance indicators ("KPIs"). There is often a disconnect between what business leaders want in terms of KPIs and what the legal department considers KPIs. There can also be the question of whether the legal department has the capabilities to provide the KPIs business leadership is looking for. Speaking to each legal department stakeholder is vital to understanding what they want to see from the legal department (and how they want to see it). In those conversations, it's good to bring suggestions about what KPIs you believe are important to the legal department as well not all stakeholders will understand how a legal department works and will be looking for recommendations. Once there is a full understanding of what success of the legal department looks like to stakeholders, the legal department can begin to assess how to get that data, whether that means running new reports or putting a system in place that allows them to collect the necessary data.
2. What Have You Done For Me Lately? Client Surveys.
Creating and distributing client satisfaction surveys to gather feedback about how your internal clients feel about the legal department and its performance accomplishes several things. First, it shows the legal department what they're doing right and what they can improve on. Often times (and this is not specific to legal departments), if there is no feedback from clients, everyone assumes that they're doing a great job. Meanwhile, clients may be complaining behind the scenes to others about your department's performance. These types of survey's can shed light on the legal department's blind spots and help them constantly improve.
This also gives the legal department a powerful story to tell. To internal clients, it shows that the legal team cares about what they think, that they are always working to improve service, and that being a partner in the business, and not just a legal advisor, is a priority. To company management, it shows tangible data that the legal department has the support of internal clients and is aware and focused on improving any areas that need work.
3. The Litigation Missile Crisis - The Near Miss Report.
The near miss report - litigation avoided, claims avoided, money saved through legal department activities tells a story that is seldom heard but is all important for a legal department, which is quantifying problems avoided. It can be easier for in-house legal departments to talk about successful litigation wins than to explain how a heavily-negotiated clause in a 2011 contract avoided a loss or lawsuit in 2016. When no problems arise due to diligent work in the legal department, it's easy for client to believe that there was no risk to begin with.
Admittedly, this can be difficult to quantify. One approach is to report the costs incurred in previous years or lifetimes of the matters for specific matter types or business units, and the reason for the expenditure. For example, arbitrations can be compared to similar matters that were actually litigated. This helps with not only coming up with an effective arbitration strategy, but it also provides an ROI on those types of arbitrations compared to litigated matters. Understanding where HR claims are coming from in the company and providing training to those business units can (ideally) yield a decrease in the amount of claims, which can then be quantified in dollars. Some departments also proactively reaching out to those claimants that are threatening lawsuits (like slip and fall) and using soft skills (quickly paying for medical claims, sending flowers) avoid emotional litigation all together. Again, this avoided litigation can be compared to the cost of fully litigated matters to add to the "near miss" story.
4. A Picture Tells a Thousand Words - Graphs
Many years ago as a rather green employee, I walked into a meeting where I was to present to executives projections and data on our department. I was excited - I'd found a new way to look at the data that I thought was ingenious and would provide valuable new insight. I sat at my computer and pulled up on the big screen an excel spreadsheet. It even had pivot tables. I began explaining my brilliant process of sorting and massaging the data. I discussed my assumptions and process for coming up with the numbers as I scrolled down the spreadsheet. Phones began whipping out, eyes started closing, audible sighs were heard. Finally one of them said, "Pat, I trust you know what you're doing, I just want to see the final results, do you have this in a graph that we can look at?" Alas, I did not.
While it's important to know exactly how your stakeholders want to see the data, most of the time they do not want to see how the sausage was made. They want to see the story you're trying to tell in pictures and graphs. For busy executive teams, they want to see the most relevant numbers in an easily digestible form. Now, you need the spreadsheet in case they want to drill down, but people don't remember the spreadsheet, they remember the graphs - they remember the story. So make sure your reporting system, ebilling and matter management or otherwise, has the ability to create these types of powerful story-telling devices.
5. Trading Places - Outside vs. Inside Resources
There is an ongoing trend over the last several years of bringing more work in-house across almost all industries. Why? In-house attorneys are realizing that this is a more cost-effective way to get certain types of legal work done, plain and simple. To do this analysis effectively, a department must track legal spend by matter type over the course of time, know the fully loaded cost of the type of attorney they need to hire in-house, and then they need to get the headcount. Considered a cost center, getting headcount in the legal department isn't always easy. But if the analysis is presented in story form, it become a no-brainer. Imagine, showing a graph to finance that the legal department spent over $400,000 in the last two years on IP litigation, when the fully loaded cost of a new attorney is $220,000, not to mention that this attorney will be invested in the business and get to know the company in a way that will allow her to be more effective and efficient than any outside law firm attorney, for lower overall cost. This also demonstrates that the legal department is on top of its spending and is always looking for ways to be more cost effective and efficient. Not a bad story to tell.
6. Moneyball - Controlling Costs
The day of the legal department throwing their arms in the air when it comes to controlling costs are over. The story here is that the legal department must show that substantive efforts are being taken and initiatives are in place that allows legal department leaders to have insight into what is being spent and how to control those costs. This story may have several parts to it, such as: solid billing guidelines in place with law firms; a system that allows the legal department to enforce billing guidelines and timekeeper rate increase policies; evaluations for outside counsel to ensure that those firms providing the highest value work are being used (and those not living up to their billable hour are not being used); and ways to lessen the cost of simple work such as offshoring document review.
7. Interstellar Stats - Relative Spending: Total Department Costs vs. Company Revenue
This is an individual metric that tells a powerful story over time. That metric is your all-in department costs (meaning, outside spend and fully loaded costs for the in-house legal team), against company revenue. There are also statistics of what the average all-in department cost as a percentage of company revenue are by industry . This stat is extremely powerful, because instead of just looking at an increase of legal department spend, the legal department can (ideally) show that, while yes, the overall spend of the legal department grew last year, revenue was also up, and as legal spend as a percentage of company revenue went down last year (or was in line with the industry average, or was in line last year and we had an anomaly this year. Hey, it's your story). This stat is a tool that is easy to understand gives important color and perspective to what the legal department is doing.
8. Interstellar Stats Part 2 - Relative Spending: Average Outside vs. Inside Costs
Another way to show your clients how your department is controlling cost and providing value is to provide internal customers with your average outside legal hourly charge and your internal "all in" cost for internal personnel. If costs of using outside counsel near your "all in" cost, you may opt to outsource rather than use internal time on those matters. This shows internal clients that you're using internal and external resources wisely and efficiently allocating work to control costs.
9. The Money Pit - Budgeting Expenses
Another way to spin the tale that the legal department is on top of their spend and working for the various business units is to accrue legal expenses quarterly and ask counsel on larger matters (or all matters) to provide budgets, either monthly or quarterly. This keeps finance and internal clients from being surprised by unexpected charges, and lets the executive team know that the legal department knows what the expected spend will be for the year. Legal departments can also ask outside counsel to inform them when expenses can be advanced or deferred for a number of months as that flexibility may dramatically assist a business unit in budgeting large expenses.
10. The Right Stuff - On Top of Technology
Remember that class in law school on the use of technology to make lawyers more efficient and better at their jobs? Neither do I. In fact, many lawyers went to law school precisely because they were more of the liberal arts sort that loved reading, writing and arguing not keeping up with the latest technology gizmos. However, in a company, being allergic to technology may get you branded as luddite that can't keep up with the times. Knowing the technology that is available to help in-house counsel do their jobs efficiently and effectively has become part of the job description. Implementing software that helps manage matters and invoices, allows for reporting, gets research done efficiently, manages documents, and manages your IP portfolio shows the executive team that your department is on top the technology in the legal space and that your department is always searching for ways to become a more efficient organization.
Storytelling may seem like an old-fashioned tool, evoking images of grandfather telling scary stories around the campfire or going to see Shakespeare. Well, it is - but that's exactly makes it so powerful. Data's important in decision-making and is an important story-telling device, but it doesn't inspire people to act. Learn to tell your legal department's story using the data as a tool, and your company may see your department in a whole new light.
