Morrison on Metrics: Risks Avoided but Metrics Never Found

From the viewpoint of many executives, the law department primarily strives to minimize the company's legal risks. In-house lawyers negotiate, draft and counsel to keep the ship off the law's shoals. That contribution obviously makes sense, but what a shame that no one has figured out how to put reliable numbers to the risks avoided. The metrics of law department managers don't extend to quantification of legal risks that never happened because of astute lawyering.

Why we can't put a defensible dollar figure on most of what lawyers do is not hard to understand. The potential events in the future are infinite in number, for starters. Coupled with that, the liabilities the company would incur for any one of those events fall on an unknown distribution curve from trivial to titanic. And even if we could pick some representative problem, guess the likelihood and stick a plausible dollar cost on it, who's to say a change in course or in the business situation would not alter the equation? A loss-creating event may never transpire or people may take action to avoid, reduce, or worsen it. Future events are not probabilities, with known distributions, but uncertainties, with almost no moorings. So metrics, let alone comparative benchmarks, stay chimera.

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Rees Morrison

Rees Morrison, Esq. is the founder of General Counsel Metrics, LLC. Based in Princeton, NJ, Rees has for the past 25 years consulted solely to...

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