Reliance on Counsel: Assessing Results in Legal Matters

What gets measured gets managed.
–Peter Drucker

Figures often beguile me, particularly when I have the arranging of them myself; in which case the remark attributed to Disraeli would often apply with justice and force: ‘There are three kinds of lies: lies, damned lies, and statistics.’
–Mark Twain

It is difficult to measure results in many legal matters.

When I was general counsel, attorneys would come into my office and trumpet a great resolution: a case dismissed, a terrific settlement, on occasion, a judgment in our favor.

We celebrated, but should we have? For instance, when is a dismissal a victory? To answer that question honestly, at a minimum, a determination needs to be made as to whether a similar result could have been achieved less expensively and more quickly.

Then there is the challenge of assessing the merits of a settlement. Settlements are typically measured against the assessed risk of a matter. Lo and behold, most settlements I have been seen come right in under their assessed risk. So, are we really able to measure a result that way?

They say a good settlement is one where both sides are unhappy. I once called our CEO to tell him we had negotiated a “good” $400 million settlement. His reply was short and (not so) sweet, “Listen @#X%*, it is never “good” to pay $400 million.” Assuming the plaintiff reacted similarly, perhaps this case met the mutual unhappiness metric.

We also need to ask: Was there a way we could have resolved the matter before proceeding to court in the first place? Could the business principals have sat down and talk sans lawyers? So many times, not enough energy is devoted up front to resolve a matter. The business people try, give up, and punt it to the lawyers, who blithely proceed to court—and it takes a long time before the resolution ball lands back on the field.

In addition, shouldn’t we assess the manner in which the matter was resolved? What was the relationship between our client and the client on the other side? Was that relationship preserved, restored or destroyed? How was our approach to this dispute perceived in the media? By our customers? By regulators?

We need to develop metrics that allow for the results of resolution to take into account the full picture, not simply the amount of money that changes hands.

What metrics do you use? Please respond on my blog, www.relianceoncounsel.com.

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