Creating a legal data culture…and demonstrating business value
Modern in-house counsel must adopt a data-centric mindset. The business now expects a return on investment, demonstrable value which can only be achieved with a mastery of data. Here’s Paul Lanzone of Fortune 500 global IT service leader DXC.
Creating a legal data culture…and demonstrating business value
Modern in-house counsel must adopt a data-centric mindset. The business now expects a return on investment, demonstrable value which can only be achieved with a mastery of data. Here’s Paul Lanzone of Fortune 500 global IT service leader DXC.
Demands from across the business now requires the in-house legal function jumps headfirst into data culture. And that culture is one of continuous transparency, a data-first mindset, leadership by example, and proven business centricity.
To do otherwise will leave legal in the digital transformation dust. It will cause the corporate legal function to fail in delivering what the business expects of every corporate function, not to mention leave it trailing behind the business.
This article considers mandatory requirements to achieve “data culture” in the corporate legal function. Every professional services firm must understand these requirements and align with its clients through service delivery supported by its own data culture. I have used as case study DXC Technology, a multi-award-winning global legal department now in its sixth year of digital transformation.
DXC Legal is recognised by the business as an essential provider of critical data. But that didn’t happen overnight.
To deliver tangible value to business requires digital transformation
The fit-for-purpose digital legal department focuses far beyond the law alone. Contract review and negotiation, risk management, IP protection, managing disputes and compliance issues are just table stakes. The business wants far more from its key business initiatives.
As Mark Cohen notes in his recent article “Law’s Delayed Future”: “Business is encouraging—in some instances demanding—its legal team to operate proactively, predictively, quickly, efficiently, collaboratively, and in data-backed fashion. The expectation is that the legal function will morph from self-contained cost centre to collaborative catalyst for enterprise and customer value creation.”
A recent study by the Digital Legal Exchange (dlex.org) revealed the C-Suite’s expectation that the legal department reach success targets aligned with business goals. Three of four business respondents said it is important/extremely important for Legal to create revenues and new market opportunities.
To do this, the legal department and its members must transform digitally. As Forbes said back in January 2020: “Digital Transformation is the integration of digital technology into all areas of a business, fundamentally changing how you operate and deliver value to customers. It’s also a cultural change that requires organizations to continually challenge the status quo, experiment, and get comfortable with failure.”
Value isn’t cutting cost or shrinking scope
The 2021 EY Law Survey, conducted with Harvard Law School’s Center, on the Legal Profession, found most in-house legal teams are struggling with current workloads, yet the workload is projected to increase 25% in next three years. Eighty-eight percent of GCs expected budget cuts due to growing pressure from the C-suite and their board. In-house departments need to do more than trim some fat, they need to get fit.
In April 2017, DXC Technology, an IT service company with 130,000 employees and 70-plus offices in more than 30 countries, was newly created in the merger of Hewlett Packard Enterprise and Computer Sciences Corp. The legal department was tasked with a cost take-out target of 30%.
Bill Deckelman, General Counsel had to choose to either remove employees and/or reduce scope. Instead, he set out a vision “to be the preeminent global innovator in digital transformation and world-class delivery of legal, commercial and compliance solutions to advance the mission of DXC Technology company”.
DXC’s Legal leaders’ vision was founded on a data-first approach. This laid the foundation for value creation. Legal leadership understood that data was required to obtain and maintain demonstrable value. They also understood data must directly support business operational excellence and growth objectives, not solely the legal function. By adopting a data culture, DXC Legal was able to achieve this goal.
Measuring value through efficiency and productivity
DXC Legal value creation focuses on two measures:
- Internally on the legal department’s efficiency. As an internal measure of performance think “is the engine running well” and it has two primary indicators capacity and utilisation. Capacity is the actual potential ability to perform (the ability to take on more work or the maximum amount of work someone can do), it represents the load on the system whilst utilisation involves asking whether the work is useful.
- A business-facing external focus on effectiveness. Effectiveness is an external measure of performance - “is the engine moving us forward towards the business goal” – and it converts efficiency into value able to demonstrate we are doing the right things. It actually takes precedence over efficiency because you can get too effective without being efficient but that would lead to burnout and other negative consequences for the legal department.
“Changing the in-house legal department to a data-driven culture requires more than leadership commitment and persistent training. Often overlooked is the need to focus on the usefulness of tools, and whether people can benefit from the data that new tools and processes provide.”
“Changing the in-house legal department to a data-driven culture requires more than leadership commitment and persistent training. Often overlooked is the need to focus on the usefulness of tools, and whether people can benefit from the data that new tools and processes provide.”
Data culture is about people
Sounds obvious? Well, we make mistakes in chasing data alone. Changing the in-house legal department to a data-driven culture requires more than leadership commitment and persistent training. Often overlooked is the need to focus on the usefulness of tools, and whether people can benefit from the data that new tools and processes provide.
Insight #1: We need utility before data. A fundamental mistake of service providers (whether private practice or in-house) is to build or acquire tools prioritising data collection. DXC Legal’s goal was high-utility software, to help people in their daily work. Highly trained professionals are likely to reject new tools and processes if they feel reduced to data input operators. Useful tools then encourage adoption and consistent usage, which in turn yields better data. Better data yields better insights, which support better business decisions.
Insight #2: Data is for more than operations. The targeting, acquisition, use and reporting of data-related insights need to be provided to all levels of the legal organisation. In the early days, data has been obtained for quarterly reporting by legal operations to assist GCs in retrospective analysis. However, it’s clear the right data and metrics need to be provided in real-time to everyone in the department - individual contributors, project managers, country and regional managers, operations, and leadership, both as individuals and as teams.
While DXC Legal has good data and gives our people access to maintain data culture progress momentum we still need to consistently showcase examples of the value gained with data, including how it’s being used to make important decisions. For example, when a deal is won that has involved legal, an automatic congratulation email displays all of the details and copies the matter to senior management.
Clear and measurable business value
Once a department has a deeper understanding of its own organisational processes and decisions through the use of data, it can then help with driving positive outcomes for the business. Legal’s primary indicator of effectiveness is the impact it has on the business revenue. Each business will have its own revenue drivers and therefore the legal data will change by company. But there are some common elements when legal provides data to the business:
Business Insight 1: Transparency is healthy. High degrees of transparency, necessary for true collaboration when sharing data inside the department, is even more important when data is shared with the business. In DXC, our business colleagues can see in real-time the status of our matters including allocations, current actions, and issues. We achieve transparency by aligning the data we gather and insight we want to develop directly to business priorities.
Have you asked what are the top priorities for the business and how they see it driving revenue? Are you prepared to ask the business for feedback real time? Our Legal Health tool does this, giving real-time net promoter scores.
Business Insight #2: Data quality is non-negotiable. As we begin to provide data to the business, it’s essential to ensure data quality is assured. We call this data hygiene. In the DXC example, this involves automated reminders within the tooling itself, manual audits and, interestingly as a project currently being deployed, the use of robotic process automation (RPA) to check the data against underlying business systems such as salesforce - and in order to reduce the data input load, to extract relevant data from those enterprise systems. RPAs are excellent at ferrying data across different systems as an alternative to building heavy-duty APIs and data pipes.
Value isn’t actually about data, it’s about insights
Legal should not necessarily expect the business to understand the data in its raw form, and this is more pronounced when providing it in large quantities. The task then is to find the legal or business insight inside the data haystack. That's a job for legal, not the business.
A challenge DXC Legal is currently addressing through the creation of a data lake and the use of RPA is determining how to provide the right data and insights to the business users at the right time, from the right systems (and people) within legal. This is difficult, especially when the data set itself is constantly updating…but it is achievable.
Master of our own future
Envision a legal department that has planned for internal efficiencies and external effectiveness, achieved true insights, rewarded digital behaviours, and demonstrated a return on investment. Its engine is running at full speed and propelling the business forward, the legal team benefits from data to manage capacity better, data input is progressively reduced.
The tangible results are astounding. We cement our position as business partner and our people are stronger, having demonstrated greater value with a data-first mindset. That’s a hard to beat legal department.