Key non-performance indicator

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Key non-performance indicator
(Also “KNPI”) /kiː nɒn-pəˈfɔːməns ˈɪndɪkeɪtə/ (n.)

A virtuous inversion of that measure of articulated fatuity, the key performance indicator, the “KNPI” measures the number of formal, pointless, bureaucratic procedures in your firm that serve only to nourish the rotten fiefdoms and layers of administrative sediment that undermine its aspiration of meeting the aspiration of its (equally fatuous) mission statement.

On the measure of legal value

For legal eagles — especially inhouse ones, who struggle to show their worth at the best of times — there is a serious point here: how do you demonstrate your value to the organisation, in a way that the boxwallahs of the executive suite will understand?

Orthodoxy recommends key performance indicators, but these are for counting processes, not outcomes: materials, actions and widgets. They monitor the size but not the value of incoming and outgoing revenues: simple, formal, legible things that translate directly into the financial statements, but that give little information as to the organisation’s ongoing health.

It is a truth seldom acknowledged: the legal craft does not show up in that picture. At all.

Yet there is one key performance indicator that no business in the western, eastern or for that matter southern hemisphere monitors:

How many key non-performance indicators do you have?

For legal value resides as much in what you do not do as what you do. The classic case:

Which is the more “value-added” legal intervention:

1. Resolving a client dispute by flawlessly managing six months of industrial-grade litigation, going to court and winning, hands down, with indemnity costs, on all fronts.
2. A ten-minute call you put into the client at the time of the incident to apologise for the misunderstanding, sort out some compromise, talk it off the ledge and make salutary amends, thereby avoiding any litigation costs and preserving a valuable ongoing relationship?

Clearly, the latter: but then: how do you demonstrate it? With what metric can you convince the powers that be of the utter shower of the trouble your legal department has avoided?

In the alternative, how much value would it have destroyed — client relationship damage, cost, resources, organisational distraction — by failing to head off the claim, and instead engaging in flawless, meticulous litigation?

It may sound lofty, but it is true: legal eagles don’t make widgets. Operations makes widgets. Any legal process you can fully operationalise — contract automation, for example — is no longer a legal process. Legal is not part of the operational stack.

Legal handles exceptions. To do this it requires judgment, experience and wisdom. How do you quantify wisdom? You can’t. Legal is — okay, okay, should be — distilled magic. That is why lawyers are expensive.

So here is where the “key non-performance indicator” comes into its own. Since you cannot measure the ineffable wonder a legal eagle brings to her task, you must instead measure its inverse. Where does her moondust fall upon stony ground? When are you flaring off that impish wizardry, rather than harnessing it towards the profitable good order of the firm? What can you do to keep a lawyer’s slate clean: to give her the time and space so she can work her wristy magic?

Not, it is submitted, by obliging her to complete dashboards, Gantt charts and monthly KPI reports.

KNPIs can help here: they can point your legal ops team to low-value things they should be minimising or getting rid of. All of these will be tedious; many will be processes mandated in the first place by the legal ops team, so do not expect a vigorous programme of KNPI removals to commence any time soon.

The JC’s suggestions for KNPIs

• Time spent on performance appraisals
• Time spent in internal standing meetings.
• Average length and number of participants on conference calls
• Time spent compiling management information and statistics (including KPIs)
• Time spent per week on committee meetings
• Time spent doing mandatory continuing professional development (personally directed self-education quite different)
• Time spent on counsel management, law firm panel management
• Time spent seeking approval for and payment of legal bills
• Time spent on netting opinions and compliance
• Number of KPIs by which a given individual is monitored — a sort of meta-KNPI.

See also

• The law of inevitable tedium
• Inhouse counsel
• Key performance indicator
• Modernism versus pragmatism