Sam Ranganathan isn’t a lawyer. In his own words, “I’m the guy who stirs the pot,” he laughs of his position as Senior Director, Legal Operations at a research-based pharmaceutical company. Ranganathan also leads the Metrics & Analysis Interest Group for the Legal Operations section of the Association of Corporate Counsel (ACC) – which aims to offer measurable solutions to inefficiency problems – a theme throughout his nearly two decades-long tenure in various roles within Legal Operations.
“Let me be blunt,” Sam preps, “metrics tend to be what we can easily measure, and every single decision-maker – from GCs to CFOs – discount them right off the bat. Those are often metrics that don’t seem to initially attack what is most important – to achieve the outcome they desire at the least possible cost.” An outcome which ultimately should boost shareholder value, a primary function of all corporate departments, including legal.
In order to convey the resounding impact of process innovation and improvement through the use of applied metrics on the legal department, Ranganathan often found himself facilitating conversations within the organization at his previous company, “I had a decoder ring,” Ranganathan laughs. "I had to establish success factors and KPIs that would align with the GC’s vision."
“After the preliminary meeting to lay out the initiative, periodic progress is expected – someone needs to drive the initiative to completion, to clearly understand where the project is headed from the onset, establish measurables for performance and identify limitations” Ranganathan says.
“There are always limitations, and teams often struggle with delivering to the expectation. It’s too late to go back to the GC weeks later to say we took the wrong approach. You have to bring those messages out right away and communicate both ways so that the entire team understands and benefits. For us, the most important thing to do from a general counsel perspective was to contain the cost of litigation and make it predictable without affecting outcomes.”
In his current role, Ranganathan oversees three functions: outside counsel management; eDiscovery; and business process improvement. He also manages the legal technology budget. In each area, if it is possible to reduce uncertainty with measurement – “that is a success,” he says.
While Ranganathan can lead the charge to push for more efficient processes internally – it’s much more difficult to determine the best internal practices for his law firms in order to achieve greater predictability and better legal outcomes.
“We haven’t been in the driver’s seat necessarily with law firms in managing their costs effectively; that conversation has traditionally been driven by law firms’ aversion to risk and less about managing each aspect of their operation efficiently” Ranganathan says, particularly in circumstances where corporate legal departments may not have a lot of prior experience with a particular issue or matter type. “If a law firm tells you that the life of a case, over the course of a year or years, will be $2.6 million, how do you know that is the best price to expect and not have to be a 20-year veteran to know that? We’re trying to predict the cost of a case and the factors that affect it.
“Unfortunately, many law firms are often focused on responding quickly to the changing needs of a case, and not as well-versed in managing the resources efficiently as the needs change and eliminating unnecessary spend,” Ranganathan says.
Talking Standardized Metrics With Outside Counsel
Metrics guru and proponent for universal quality standards in the legal profession, Ron Dolin, relives the same Groundhog’s Day-like scenario when he meets with law firm lawyers. It goes like this:
The CIO of an AM Law 100 firm says, “We want to do big data.”
“What problem are you trying to solve?” asks Dolin, an angel investor to legal technology startups and a Senior Research Fellow at Harvard Law’s Center on the Legal Profession, working on quality metrics.
“We’re not sure. We just need big data,” responds the CIO.
This scene is a familiar one among well-known commentators on the legal profession, many who have written at length about the dire consequences of misunderstanding (or underestimating) the role of design in process and technology development.
“It’s risky to build a sandbox without speaking to clients about their needs – understanding their pain points – and thinking deeply about the process improvements necessary for the specific problems to solve,” says Dolin. “To build a solution looking for a problem, regardless of the industry or profession, isn’t beneficial to anyone.”
Dolin, like many of law’s forward-thinkers pushing a century-old guild into a new era, is accustomed to playing buzzword bingo with law firms and clients. And, while he’s optimistic about the recent flurry of legal ops attention within the industry, he echoes the quiet frustrations shared by many senior legal ops executives when he hears from law firm partners who don’t solicit regular client feedback.
“Push harder,” Dolin says.
“The incentive and push for change does need to come from the clients, but the nature of the change needs to come from the law firms [and other legal service providers]."
It’s a model – most well-known through the work of Harvard professor and businessman Clayton Christensen – where clients can look at their law firms as a black box, and say: ‘Here is what I want to pay for; you figure out how to make it work.’ This is an important component of The Innovator’s Dilemma.
“The main point is that you have to give up high margin work at some point, and innovate in new, unknown or lower margin markets; the dilemma is in deciding when to give up your highly profitable work because the writing is on the wall,” Dolin says.
“When creating a new market, the innovators or producers of new services shouldn’t – and, in theory cannot – ask existing consumers or clients what they should do next. The reason is simple: clients often don’t know,” he explains. “You would never ask someone buying coal about electricity,” he proffers.
The same stands true for new, improved ways to deliver legal services. The innovators, law firms and legal service providers, must be the ones to identify and create new channels where their clients are stuck.
“You can do market analysis in a new market, but it won't uncover the size of the market,” Dolin says. “For example, people might have known that their old computer systems were limited, but not have known how helpful windows and a mouse would have been to resolve their frustration. You can ask about the frustration, innovate and test possible solutions, and try them out in the market. But you couldn’t have determined how many PCs would have sold from the start.”
Dolin doesn’t suggest that all providers need to follow the same path -- or build the same operating system – to produce better outcomes for their clients. “Each law firm might take a different approach – it might be an issue of the culture of the firm or the type of business they are working on.”
Process diversity within law firms allows firms to define their own culture and practices. Clients aren’t seeking to standardize the day-to-day operations of their outside legal service providers, but rather achieve specific, predictable outcomes. Which means that when it comes to comparing law firms, universal quality measurements trump the old-school promises of smarter, better educated or competent lawyers of Firm A compared to Firm B.
However, most lawyers aren’t accustomed to discussing design concepts and brainstorming with clients about work flow. And, they haven’t traditionally been economically incentivized to do so.
For this to happen easily, clients need to be able to compare the quality of different firms and practice groups. If a client can be confident in the quality of work at Firm A, and the pricing is more favorable than Firm B for the same quality, the business case for Firm A is simple.
Moving Toward Universal Quality Metrics
Dolin’s research at Harvard Law’s Center on the Legal Profession seeks to define, implement, and evaluate the use of legal quality metrics in the selection and management of outside counsel of Fortune 100 companies. He works with clients and some of their select law firms, as well as new entrants into legal services to bring about adequate data collection by all parties, a common theme these days among “legal operations” teams within in-house departments. While measuring process components and timeliness is somewhat straightforward, measuring quality in some reliable, formal way is more elusive.
The market for bespoke legal services is constricting, and while some firms will remain in the upper echelons of the profession – protected by prestige, pedigree, or hopefully actual quality – others will depend on a system where they can compete more effectively, where clients are able to easily compare service providers on the same metrics.
Standard quality metrics are also particularly helpful to gauge new entrants to the legal profession – a swiftly-growing category – and measure new innovations and processes against traditional ways of practicing law. Standardized metrics can aid procedural interactions with outside counsel, and provide better insight into the selection and management process for comparing established relationships, as well as for bringing new entrants into the fold, Dolin says.
“The fact that we can define a metric that covers a wide variety of uses in no way means we are covering everything that everybody wants to do,” Dolin concedes, but universal metrics can give clients measurable and proven ways to focus on cost and efficiency while maintaining, or improving, quality. “I can’t think of an in-house counsel who would turn away from that argument,” he says.
In order to succeed, clients and law firms must also be incentivized to implement changes through organizational structures that “require people to understand what they are doing, how to do it best, and permit them to make changes they are comfortable with,” Dolin says. But first, the profession must do its homework and start at the beginning, with understanding pain points, problems and desired outcomes.
“The measurements need to be correlated with the subjective opinion of clients and lawyers of what is a good work product,” Dolin says. “The only way to know is to talk to a lot of people. It’s not as simple as defining some metric,” [especially if that metric isn’t useful for competing across the industry.]
“The goal is to end up with a metric that everyone feels the profession should incentivize – and is feasible in the workflow – only then will we be in a place to properly evaluate, and more reliably improve, the delivery of legal services.”
Sam Ranganathan spends most of his days devising innovative ways to make legal functions more efficient. He is currently working to build a set of legal department metrics that matter to corporations and their law firms. Over the course of his career, Sam has helped teams to develop hundreds of patentable ideas; implemented novel ways to analyze patent portfolios; and built an offshore in-house patent engineering team to improve quality of patent prosecution while reducing overall cost. Most recently, Sam has identified significant cost savings by creating in-house eDiscovery capability, and new ways to uncover EP validation and litigation spend management opportunities. Sam received a Master of Science degree in Chemical Engineering from University of Illinois at Chicago and a Master in Business Administration from the Kellogg Graduate School of Management at Northwestern University. Sam has two patents issued in his name and is an avid weekend photographer. You can find more information about Sam (here). You can view some of his photography (here).
Ron Dolin is an angel investor, focusing on legal technology startups. He co-founded the Program for Legal Technology and Design with SLS alum Margaret Hagan and has worked on legal innovation at the Stanford Center on the Legal Profession. He is currently a Senior Research Fellow at Harvard Law’s Center on the Legal Profession, working on legal quality metrics. He is also Adjunct Assistant Professor at Notre Dame Law School, where he teaches Legal Technology & Informatics. Ron has been asked to participate on panels and give talks at universities and organizations such as Stanford, COLPM, ILTA, and ACC, on issues related to legal technology and innovation. More information is available at Ron's Radical Concepts blog.
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