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Benchmarking: I’ll see you in court

Legal concerns around benchmarking have been around since the practice really exploded in the late 1980s and early 1990s. These issues should be considered, but shouldn’t be a barrier to benchmarking. Logic and common sense should rule your benchmarking efforts well before the legal concerns. A benchmarking code of conduct to guide your activities is essential.

Why you shouldn’t need a legal team

I’ll assert you don’t need a legal team to support the vast majority of your benchmarking activities. This may sound risky, but it is just the opposite of that. You shouldn’t be benchmarking the processes that make up your competitive advantage to level of detail that requires legal review.

A logical principle of reciprocity or exchange should guide your benchmarking decisions long before a strict principle of legality. Basically, you shouldn’t ask another organization to share something you wouldn’t share with them in return. So, if you feel your legal team needs to review your survey (the traditional role of most legal teams) you’ve probably already violated the logic litmus test.benchmarking, legal, data, metrics, performance

Why you should use a legal team

With that said, you should engage your legal team in your benchmarking efforts. Not for the obvious reasons you think, though. The traditional role of legal is to provide guidance on the types of information or survey questions you can and cannot share. If this is the only role the legal team plays on your benchmarking project, you are really wasting a great opportunity, and your project will probably never get executed.

The most successful projects engage the legal team well before the survey or questionnaire is ever built. If the legal team is engaged from the beginning, they understand the business issue at hand, the importance of solving the problem, and the complexity at hand. They are involved in developing potential alternatives to gathering information and asking questions, not as a watch dog. Plus, you have a great proponent on your side when you have to sell the benchmarking findings internally, later.

The role of the legal team

I once had a really inspiring lawyer explain the role of the legal team to me very simply. He said the role of the legal team is to mitigate risk for the organization. A benchmarking project will give you insights into how your legal team views risk. If they choose to mitigate risk by restricting your benchmarking activities, you will have a pretty tough road ahead. If they view risk more broadly to include the risk of not solving key business issues (like those you are benchmarking); you’ve got yourself a stellar legal team.

A strong legal ally is a great resource, will help keep your benchmarking activities focused, and will also ensure the findings are valued within the organization. Don’t ignore this key aspect of benchmarking, but don’t let it be your only litmus test. Logic should come into play well before legality.




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