Defining the Value of Lawyers’ Work: Where to Get Reliable Numbers for Sound Management Choices (Part 2 of 3)

In Part 1 I addressed the need for reliable numbers relating to the value of legal services.

If what gets measured gets managed — and if measuring the wrong thing is worse than measuring nothing at all — then client company executives need a reliable measure of the value of legal services in their budget.

Toting up hours billed gives “certainty” about the method by which attorneys came up with the price that they charge to a client company.

But that total tells us nothing about the actual benefit received by the business.

Hence our consideration of two alternatives: “Data-driven”, and a price agreed in advance.

“Data-driven” calculation of the value of lawyers’ work for client companies.

I refer to “data-driven” in quotes because there’s (a lot) less here than meets the eye when you read legal profession headlines.

In fact, I’ve found just a single instance of data-gathering and analysis as the basis of determining the value of what attorneys do for a company. If I’ve missed something, I invite comment and correction on this point.

(Nevertheless, there’s a great deal of reporting on the legal profession’s incipient use of data-gathering — under the headings “data analytics” or “big data” as applied to law. But these don’t relate to ascertaining the value of what attorneys do for the business. They relate instead to tools that lawyers can use to perform legal tasks — like doing legal research, identifying a particular judge’s tendencies in certain cases or procedural situations, or using artificial intelligence to review documents instead of manual review by an attorney.)

The single instance I’ve been able to substantiate where a client company is using data-gathering and analysis to place a value on what lawyers do for the company consists of the efforts of Wendy Rubas, the general counsel of VillageMD.

An excerpt from, “Are Lawyers Ready to Be Managed by Metrics” in the March 1 digital edition of The American Lawyer identifies one — isolated — effort at, “a data-tracking system that could measure legal events and outcomes — in addition to costs associated with doing legal work”:

“The billable hour has plenty of enemies, but Wendy Rubas wasn’t always among them ….

“As an associate at McDermott Will & Emery’s Chicago office from 1999 to 2004, she felt that, even if it was a taskmaster, it served another purpose—a measure of her value to the firm ….

“Rubas is now the general counsel of VillageMD, a tech-focused company helping primary care physicians transition to a new value-based payment system. In her nearly 15 years as an in-house lawyer, she has gone further than most toward capturing and modeling data that shows her clients the costs associated with legal events.

“Through automated reports, she has wound up tracking the relative value of legal work. And that has taken her to an even more unexpected place: changing the way she thinks about what lawyers should be doing. For instance, she’s not all that interested in spending time negotiating software licenses or nondisclosure agreements. They rarely are ‘a cause of loss,’ she says ….

“Rubas says … there needs to be a common language for legal work and outcomes that can be shared across industries and law firms to provide a detailed, comparable understanding of what is happening in legal departments and law firms across the country. That would help the industry know what it should be spending its time on, rather than finding places it where it can spend it.”

As I said, Rubas is a superstar and outlier. Hopefully she’ll be joined by lots of others.

But at present I’m not aware of anyone else* using data-driven methods to place a value on the work their lawyers do for them in the context of an actual business.

In Part 3 I address defining the value of lawyers’ work by means of a price agreed in advance.

 

* In addition to the single instance of which I’m aware of a hands-on effort by a lawyer who represents a client company, I believe that there may be scholarly work on this subject among law professors. If this is the case, I have not yet been able to get my hands on this scholarship. Again, if I’ve missed something, I invite comment and correction on this point.

 

Part 1

Part 3