In-House Counsel

People in law departments alter behavior (game the system) to hit goals

By Rees Morrison

What gets measured gets manipulated. Clever people always figure out ways to make the most of reward goals or decision-making. If money in a law department depends on metrics, there will be efforts to spin and manipulate the numbers. People will game the system, if you want to put it cynically, or they will perform for pay, if you want to put it positively.

Searching my first 4,000 posts, I found numerous references to people gaming some performance objective (See my post of April 6, 2007: online evaluations of firms; and Feb. 20, 2008: accounting figures, by stretching out litigation.). Several posts have to do with the risks that billing arrangements will be manipulated (See my post of June 22, 2008: budgets; Sept. 7, 2008: unit billing; Sept. 4, 2006: fixed fees; Sept. 13, 2006: percentage of matters handled under alternative fee arrangements; and May 15, 2005: assignments of complexity to matters.).

Where adjustments, selective focus, and interpretations of metrics are possible ? everywhere, therefore ? it casts doubt on the legitimacy of benchmarks (See my post of May 16, 2006: total legal spending eliminates gaming the components; Oct. 8, 2007: ROI calculations; Nov. 8, 2007: bonus awards; Feb. 10, 2007: patent filings; and May 25, 2008: Goodhart?s Law.).

Managers who espouse metrics-based management need to be vigilant about efforts to hoodwink those metrics.

Full post as published by Law Department Management on March 11, 2009 (boomark / email).