Oscar Wilde's “Lady Windermere's Fan” contains a phrase that has entered the common lexicon: A cynic is “a man who knows the price of everything and the value of nothing.”

Stephen Allen, global head of legal service delivery at Hogan Lovells, says the phrase is representative of many legal departments today: Many lawyers know exactly how much it costs to draft a contract, but once it's in place, do they know how it can drive value for the organization? Or even before it's written, have attorneys identified the value costs that could come from a breached, or worse, lost, contract?

The real question that legal departments should ask of their data, says Laurie McCausland, deputy general counsel, compliance and legal services innovation at Koch Companies Public Sector, is, “How can we help our businesses become better? How do we not only help them, but facilitate them so that we're the counterparty of choice and people buy our services?”

It's a tall task for many legal departments, even those that have heard the phrase “information governance.” But it's a task that's necessary for the legal department to be more than a cost center, a central theme to the “Data Governance for Legal Ops: Using Contract Intelligence and Information Governance to Add Value” session at the 2018 CLOC Conference. Alongside Allen and McCausland, Deana Uhl and Karl Dorwart, both senior directors at FTI Consulting, comprised the panel.

Allen began the panel by noting that defining value is going to be different for every organization. It depends first, he said, on how the company's overarching culture looks at legal, whether it is more risk-averse or expects to win every case. He noted that one time, he tried putting together a complete value map, with input from each segment of the business. “But it's a fool's errand. As soon as you do that, the business changes.”

Second, he said, is being able to harness the power of probability to start on your journey. If you're looking at class actions, for example, he said to ask: How many are there? What's the potential upside value if you win? What's the average value? What is the chance that none or all claims will be successful? A number of factors can go into a single probability score.

And to truly define value, he added, it means looking outside of the legal department itself, particularly with data that comes before and after a case. He gave the example of G4S's security guard shortage at the London 2012 Olympics—the legal department may not have bungled the operations of rolling out security guards, but they were ultimately the ones who bore the risk. As a result, the company's lawyers should have done an analysis both before and after the contract's execution to prevent pre-engagement risk (failure to follow policy, breach of statutory/regulatory duty) and post-engagement risk (breach of contract, failure to exploit rights).

“We as lawyers are many things—you read about it in the press how we're dinosaurs. But one thing is that we very rarely get stuff wrong. So doing stuff better is not an option to drive more value,” Allen added.

McCausland agreed, noting that the legal department is in a unique place where it touches all parts of the business. As a result, by connecting those disparate points and creating an overarching view of data, the legal department can drive value.

She pointed to contract analysis, IP analysis and knowledge management as three key areas of growth, adding, “We're demanded to do our jobs more efficiently, and I believe in this sort of evolving technology world, there's a lot of opportunity.”

So where does technology enter the picture? Like anything else, it's a value proposition, with McCausland noting that IT often wants a shiny new tool, “but it could be more than you ever need, so why pay for it?” However, she advised not to dismiss new technologies out of hand, but rather to take a look with an eye toward what will ultimately benefit the business.

“It's an exciting time to be in this sort of business, because I think that a lot of these tools have even broader applications than vendors are talking about today,” McCausland said.

Those broader applications often include departments outside of legal as well. Uhl pointed to the Information Governance Reference Model (IGRM) from the EDRM organization as a good overarching framework for those unfamiliar with information governance at all, as a way to bring disparate groups together.

“If you talk to IT, information governance is a low-level metadata, but if you talk to the rest of the business, it's their Word documents, their Excel documents. So you need something that encompasses all of it.”

And contracts are a good place to start as an area that contains easily digestible, but potentially high-value and high-risk data. Uhl noted, “It's really amazing that when you go out there and do some sort of data inventory, how disparate the data is out there. … Nine times out of 10, when you start assessing their data, contract management is one of their top risks.”

Dorwart added that the upcoming General Data Protection Regulation (GDPR) in the EU can be a jumping-off point for that kind of conversation.

“One of the things we've seen is that, companies don't even know where to start—holistically with data governance, but also with them saying, 'We know where our contracts are, but now we're forced to dig into them.' You don't want to find yourself in that reactionary state,” Dorwart explained.

That imperative is one that was echoed by all panelists: The time to start driving value is now. In a company such as McCausland's that undergoes a lot of M&A activity, getting a handle on contracts and other types of potentially valuable data can seem a monumental task. But even the most complex companies need to start somewhere.

If you're doing contracts at the time of M&A, she said, “That's a bit late, you've already lost value.”