Much has been said about re-engineering the corporation and how law departments can benefit from the same efforts at improving productivity. An important tool in this process is the client survey. Lynn Pollan's article, Conducting Client Surveys, provides an excellent description and outline of the process.
The first question, of course, is why bother conducting a client survey? For corporate law departments, an initial incentive might be that surveys often lend support to the department's request for resources. In terms of self-analysis, law departments can prioritize the areas in which they need to improve performance, allocate their resources more effectively by more appropriately meeting the needs of management, and finally, provide a benchmark for the law department against which it can compare itself in further surveys. The benefit to management, other than simply a more efficient law department, is the education they will receive in completing this process as well as the opportunity to have an impact on how services are provided to them from the law department.
Before beginning the process, however, one must also be aware of the risks involved. Of course, the first thing that occurs after a survey is an expectation of results. If the survey helps the law department meet its clients' needs more effectively that, without more, is a positive result; however, if management does not sense change or improvement, the more likely consequence will be a cynical reaction to the department's effort. Therefore, in conducting a survey, law departments must make a firm commitment to their objective to change. Law departments should also, obviously, be sure to get the go-ahead from senior management before they begin the process, to ensure support by the corporation, especially since there are costs to conducting the survey and potential costs (and risks) associated with the results.
After these initial steps have been considered and the cost of the survey has been determined (measured by estimating the dollar value of each step in the operation from time commitment to printing and delivery fees), the law department can begin creating a questionnaire. Ms. Pollan enumerates six steps in the creation of a client survey:
1. Brevity: A questionnaire should take no more than 15-20 minutes to complete.
2. Anonymity: The answers will probably be more honest if employees needn't worry that their answers will be scrutinized as their own. However, one must also realize that anonymity also means that each employee's opinion will carry the same weight.
3. Clarity and Absence of Bias: Questions must not be susceptible to more than one interpretation to ensure the accuracy of the survey. To avoid undermining the integrity of the survey, the questions must not contain any bias encouraging a respondent to answer favorably or unfavorably.
4. Closed-Ended vs. Open-Ended Questions: Closed-ended questions, in which the respondent answers on a scale of, for example 1 to 10 or true or false, offers the advantage of calibration and comparison. However, the limitations of closed-ended questions are that they do not allow for any original input from the client. Open-ended questions on the other hand provide the surveyor with individual details and suggestions, but can also create a situation in which apples are being compared to oranges. Therefore, more successful surveys will include a mix of open-ended and closed-ended questions to achieve both accuracy and breadth.
5. Attitude Scales: Closed-ended questions often use attitude scales in which the respondent is asked how he or she feels on a scale of, for example, 1 to 10. The more numbers on the scale, the more accurate the data; however, with too many numbers, the responses get diluted. The ideal scale falls somewhere between 1 to 6 and 1 to 10.
6. Overall Questions: A final question such as, "how would you rate the quality and effectiveness of the law department," provides as much a general idea of how people feel about the department, as a good aperture from which to analyze the other data in the survey. For example, if the law department rates well overall, it can specifically look at those problem areas on the survey. However, if the survey was generally positive but the overall question had a bad result rating, the survey did not accomplish its goal of targeting problem areas. In such a case, open-ended questions might provide a better focus for the department's attention.
Once the survey has been crafted and revised, the surveying team must decide upon the respondents. In sampling, a larger number of respondents ensure a higher probability of representation. However, this survey need not be too scientific and as long as more than 50% of the selected respondents return their surveys, the department can be almost certain that it did not just hear from those who have unusually strong opinions about the department. In a mid-sized company, the survey can probably be distributed to anyone who comes into contact with or otherwise deals with the law department professionally. At this point, it is important to recognize that the cover memorandum to the survey is almost as important as the survey itself. Finally, returning the survey should be an easy task for the respondent and to ensure confidentiality, it should be returned to another department (using the CFO's office to tally the results can enhance the integrity of the survey).
Once the results are tallied, there are seven steps, according to Ms. Pollan, for the law department to act upon:
1. Prioritize the areas that need improvement.
2. Tackle the worst first: the department should immediately deal with any remarkably low answers.
3. Within each priority area, identify and rank the factors that need improvement by comparing the results for each factor against the other factors in the area.
4. Design proposals to deal with the key problem areas.
5. The action plan should be limited to one or two areas in which to effect change.
6. Clearly enumerate and describe the specific steps in the plan.
7. Prepare for a meeting with senior management in which the re-engineering plan will be pitched.
After the major aspects of the client survey are dealt with and the law department has taken stock of its organization and operations, any changes that are implemented reflect the department's flexibility and itsability to deal well with its clients. Maintaining a critical eye on the department, however, should not stop at one survey. Follow-up surveys and periodic updates will inform the department of where it is headed and increase the client's goodwill and confidence in the law department.
The initial, internal phase of benchmarking involves assessing a company's current position and planning the benchmarking process. The external phase makes use of the analyses conducted during the internal phase in order to compare a company or a department within a company to another company or another department within the same company.
While an ad hoc inter-departmental team representing the clients of the benchmarking process as well as the law department itself can be used to conduct the benchmarking process, it may be preferable to use a group of employees trained to benchmark as they will be more likely to carry out the process continually.
Internal. The initial phase of benchmarking consists of identifying the clients for benchmarking or the eventual users of the information that will be produced through the benchmarking process; and agreeing on subjects for benchmarking and identifying the resources to be used for the benchmarking process. This phase will probably include the use of client surveys.
Since the results of the benchmarking process are strongly linked to the information sought in the initial phase, the benchmarking team should be mindful of the degree of specificity sought as well as the importance or criticality of the factors being measured.
External. The external component of benchmarking involves the collection and analysis of information regarding the practices of other companies and of other departments within the same company. External benchmarking includes the use of trade associations and industry-practice groups for the purpose of self-comparison and eventual self-improvement. The use of industry-practice groups is preferable to trade-association membership as it carries less legal risk.
The internal and external phases can be further divided into the four stages of re-engineering a law department:
1. Strategic positioning and mission. The results of benchmarking studies and processes can be used, firstly, to develop strategies aimed at strengthening areas shown to be in need of change and, secondly, to create mission statements outlining objectives for given areas. Once these objectives have been identified, they can be used as points of reference for the benchmarking process.
2. Preparation of change plan. After a benchmarking committee has identified problem areas through the use of the various benchmarking processes, a law department and/or a re-engineering committee can prepare a strategic plan to rectify the problem areas.
Information collected in the form of survey reports can be used to discern trends as well as to provide objective indicators for internal and external comparison. Altman Weil Publications, Inc., has monitored the trend of in-house legal services through surveys conducted from 1972 to 2003. The survey is a companion to the annual Law Department Compensation Benchmarking Survey published by Altman Weil Publications, Inc. The survey report tracks trends in law department expenditures and employment. Examples of useful benchmarks that can be extracted from the Altman Weil survey include: the amount spent on outside counsel as a proportion of overall expenditures made by a law department in a given industry and the amount spent on compensation for lawyers as a proportion of overall law department expenditures.
Another recent survey report, conducted by PricewaterhouseCoopers, analyzes trends in the use of in-house and outside counsel as well as the compensation levels and billing methods of law departments.
Additionally, the Corporate Legal Times, in conjunction with the Orrick Herrington & Sutcliffe law firm, reporting on their latest survey, noted that, "for the first time in several years, legal budgets [for 2001] are on the rise. . . ." According to the survey results, "[l]egal departments have budgeted a mean average of $1.5 million for internal spending [which excludes settlements, judgments and outside counsel fees] in 2001, compared with $1.4 million last year. . . ." That represents a 6.7% increase, compared with a 4.0% decrease in the prior year.
3. Identification of processes. Benchmarking can be used to compare the way in which companies in the same industry make use of resources to fulfill the main functions of a law department.
4. Design and implementation. The results of client surveys and other benchmarking processes can be used to design more effective work processes and for suggestions regarding means of implementation.
The results of benchmarking can be used in standard-setting, problem-solving and in the process of forming an action plan to make changes in areas shown to be in need of strengthening. The results can also be used in the creation of a schedule to conduct benchmarking studies and client surveys at regular intervals.
The foregoing excerpt is from Chapter 7, "Law Department Productivity: Re-Engineering, Benchmarking and Client Surveys," by Carol Basri, President, Corporate Lawyering Group LLC, New York City, and Irving Kagan, Jenkens & Gilchrist Parker Chapin LLP, New York City. Copyright 2004 by Practising Law Institute, www.pli.edu.