Knowledge bank

Return on investment (ROI)

The legal world is an environment of evidence - “Prove it/disprove it!”:“ Will the witness come up to proof?” “ We must have total disclosure” - and so it is not surprising that lawyers are always asking “why?”. In the context of our work we fully anticipate to be constantly challenged with the question “why do we need coaches?” (or more likely “why do we need to spend money on coaching?”).

Until recently there was little research or writing on studying the return on investment for coaching activities. Indeed some leading experts in the coaching field felt that returns should never be measured as coaching was a private and discrete agenda between coach and coachee and that the organisation ( usually paying for the service) had no involvement in what went on in the coaching process.

With the exponential growth in coaching across so many sectors however there is a now a growing interest in understanding just how all the investment is producing real results. Further any organisation that pays for the coaching has a right to ask what they get for their investment

Sometimes coaching can be seen as “a nice to have” activity. This is not our philosophy. . Coaching is not counselling. It is about change and identifiable goals. Against this background we at Cresco have taken up the challenge is to see if there is a body of evidence that coaching can actually produce enhanced performance and quantifiable benefits for law firms – and we hope that law firms will also carry out their own analysis of ROI in the development of their staff.

Our starting points are:

• Coaching as a technique – does it work?

• Does the organisation want to measure the results?

• Are the coaches themselves effective ( and how are they measured).

• Do the coaches perform better as a result ( and how are they measured).

Some firms may feel that coaching is only a remedial exercise or that it is provided as part of a support network but our view is that most firms will want to track the real and financial benefits. All this may seem a little daunting but the key to measurement is to decide what is going to be measured at the outset and this is why clear but realistic goals must be set in place at the beginning of the coaching process. At the same time not all objectives can be measured- “I’m going to record one hour more per day “ is measurable but “I’m going to going to spend more time in developing the trainees “is not easily translated to the bottom line.

The main issue here is that many other activities in a law firm are measured – hours, bills, days invested etc. Each large IT spend is considered against financial criteria. Even marketing initiatives are now beginning to be examined for specific return on investment. If coaching and development work is not going to be measured in some fashion, the risk is that resources allocated to it will be seen as “expenditure” and not as investment. “If we can’t measure it then we can’t see it “ will be a common response.

And these are the key measurement factors.

• Identifying changes in behaviour and results ( more recorded time, less disruption of others, better internal and external relationships- leading to introduction of more fees)
• Identifying the role of coaching
• Identifying the cost of coaching
• Identifying the financial and other benefits
And then calculating the real returns

Identifying the objectives is a crucial first part of the process but in order to complete the full circle of evaluation, thought must also be given to:

• The measurements : results will be partly the result of anecdotal evidence and partly objectively supported . they will be subjective and objective. They must be related to others who are also recieving coaching.

• External factors:The results also need to be delivered in context and must allow for the intervention of other factors ( which might have equally led to improvements). Methodologies such as control groups , trend analysis, and forecasting can be used to focus on what the coaching activity alone has achieved.

• Resources needed: critical resources include senior management buy –in, an explanation across the firm/department/team of what coaching is seeking to achieve, regular feed-back/up-dates from those involved and peer/support group meetings . And a budget!

All of these activities will result in a focus on obtaining the best outcome for a coaching programme. Without an evaluation processs established at the outset , a coaching programme can soon lose direction and status and a crucial development tool may become highly devalued.

A key part of our own activities at Cresco is continuing to develop the means to obtain returns on investment for coaching. We will be working with Nigel McEwen who is studying this area as part of his academic research. Any firms who either want to contribute to that research or would like to discuss ways of structuring their own evaluation methods are invited to contact us.

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