Effective engagement with executive stakeholders is crucial for legal departments seeking to secure buy-in for initiatives and demonstrate value. One of the most impactful ways to engage executives is through well-curated metrics and reports that showcase the performance and strategic impact of your legal function. These metrics provide a tangible connection between legal efforts and business objectives, helping stakeholders see the return on investment and the role the legal department plays in overall success.
In this article, we will explore how to conduct a stakeholder analysis, understand the types of metrics that resonate with executives, and how to present data in a compelling way that communicates the impact of your initiatives.
Stakeholder Analysis: Understanding Your Audience
Before delving into the metrics and reports themselves, the first step is to conduct a thorough stakeholder analysis. This helps in identifying who your stakeholders are, what their interests are, and what kind of information they care about.
- Identifying Stakeholders: Stakeholders in a legal context extend beyond the legal team. They include senior executives, finance teams, procurement, risk and compliance teams, and in some cases, external regulators or strategic partners. Each group has a different interest in legal operations, so understanding their unique perspectives is crucial.
- Defining Stakeholder Interests: Not all stakeholders will be interested in the same data or metrics. For example, finance might primarily be concerned with cost management and budget forecasting, while the CEO may focus more on risk mitigation and compliance issues. Stakeholder analysis helps categorise stakeholders based on their interests, allowing you to tailor your reporting to their specific needs.
- Mapping Influence and Power: Once you know your stakeholders and what they care about, it’s important to map their influence and power within the organisation. This will help you prioritise communication efforts and ensure that the most influential stakeholders receive reports aligned with their priorities. It’s equally important to identify stakeholders who can become champions for the legal department, advocating for initiatives based on the metrics presented.
By conducting this initial stakeholder analysis, you can ensure that the metrics and reports you provide are relevant and drive engagement and support for legal department initiatives.
Choosing the Right Metrics: What Matters to Executives
The power of a report is not just in the data it presents but in the relevance of that data to its audience. Executives want information that connects directly to strategic outcomes that matter to them, such as cost savings, risk reduction, operational efficiency, and compliance. Here’s how to identify the right metrics for different stakeholders.
- Cost Management and Financial Performance: For CFOs and finance teams, the primary concern is likely the financial performance of the legal department. Metrics such as legal spend as a percentage of revenue, invoices compliant with agreed rate cards, average blended rates, savings from using competitive RFPs, and savings achieved through contract negotiations are vital. A legal spend management solution can provide data demonstrating how effectively external legal costs are managed. You can also track the impact of initiatives designed to reduce costs, such as automation or the implementation of legal tech solutions, by showcasing actual savings against projected costs.
- Risk Management and Compliance: CEOs and board members are generally concerned with broader business risks, including legal risks and compliance obligations. Metrics showcasing how the legal department manages litigation risks, contract risks, or regulatory compliance are critical here. This can include the compliance audits completed, risk mitigation strategies implemented, or litigation outcomes. Legal departments should track key performance indicators (KPIs) demonstrating how these risks are managed and reduced over time.
- Operational Efficiency: The ability of the legal department to function as an efficient business unit is also a key concern for many stakeholders. Metrics around operational efficiency may include resources or time allocated to different types of matters, the ratio of lawyers to employees, or the volume of matters handled per quarter. By showing improvements in these areas, legal teams can demonstrate how they contribute to the business’s overall productivity.
- Impact of Technology: As legal technology continues to play a larger role, it’s important to track the effectiveness of these solutions. Metrics that reflect the adoption and performance of legal tech solutions are key to justifying further investment. For instance, how many hours have been saved through the provision of self-service to business stakeholders? How much time has been saved through the use of automation? How much time has been saved on administrative tasks or manual data analysis? These insights can significantly impact executive decision-making.
Crafting Powerful Reports: Best Practices for Engagement
Now that we’ve covered the metrics that will resonate with executives, the next step is understanding how to present this data effectively. Well-crafted reports must be concise, visually engaging, and directly linked to strategic goals.
- Tailor Reporting Dashboards to Your Audience: Using the insights from your stakeholder analysis, you should create tailored reporting dashboards for different audiences. For example, finance stakeholders may need more detailed financial metrics and forecasts, whereas the CEO and board will want high-level summaries that connect to business risks and strategic outcomes. Avoid overloading executives with unnecessary data—focus on the most relevant to their role and decision-making process.
- Use Visual Data Representations: Presenting data in a visual format can significantly increase engagement. Use charts, graphs, and infographics to highlight key points and trends. Visual data is easier to digest than pages of written reports, allowing stakeholders to grasp the significance of the information you are presenting quickly. For example, a simple bar chart showing a decline in legal spend over the past 12 months or a stacked bar chart that highlights the types of legal work completed across the different business units or jurisdictions.
- Provide Context and Narrative: Data alone is not enough to convey the whole story—you need to provide context and explain why the metrics matter. What is driving a particular cost saving? How has a risk been mitigated, and what would the consequences have been otherwise? Including a brief narrative with your report helps stakeholders understand the importance of the data and its relevance to broader business objectives.
- Link Metrics to Strategic Goals: The most effective way to engage executive stakeholders is to show how the legal department’s performance aligns with the overall business strategy. Whether it’s improving profitability, managing risks, or ensuring compliance, your report should clearly demonstrate the contribution of legal initiatives to these goals. By clarifying this connection, you help stakeholders see the legal department as a strategic function.
- Regular Reporting Cadence: Engagement is built through consistency, so establish a regular reporting cadence that keeps stakeholders informed without overwhelming them. Monthly or quarterly reports work well for many legal teams. Regular updates help keep legal initiatives top-of-mind for executives and provide continuous feedback on how the department performs against KPIs.
Conclusion
Engaging executive stakeholders requires more than compiling data—it demands a strategic approach that aligns legal performance with business goals. By conducting a stakeholder analysis, choosing the right metrics, and presenting data in a clear, visually engaging format, legal departments can communicate the impact of their initiatives in a way that resonates with decision-makers. In doing so, they secure buy-in for future investments and position themselves as integral to the success of the broader organisation.
With a focus on metrics that matter and reports that tell a compelling story, legal teams can build lasting relationships with executive stakeholders and demonstrate their value at every level.
This article was originally published on our sister site lawcadia.com.
