The top 10 metrics leading in-house legal departments are tracking and why
In the following article, we explain 10 legal department metrics high-performing in-house teams are tracking and how they may help your team be more productive, as well as showcase to the wider business the value your team provides.
“The typical lawyer displays mastery in the use of words. But when it comes to numbers, lawyers often feel out of their comfort zone.” PwC
Almost all other areas of the business are required to back decisions and reports on data and metrics – not only to support future decision-making but to report on performance, trends and risks. Yet many legal teams lack structured data from which to easily generate reports and make decisions. So with that, it’s time we turn the focus to in-house legal and the metrics worth considering, what they mean, and how metrics can support data driven decision-making.
“We are still seeing in-house legal teams working in email and spreadsheets. This doesn’t give them an easy way to collect the structured data they need to surface meaningful insights. LawVu’s connected legal workspace meets users where they work, giving them the right technology at the right time, then ensuring the data ends up in LawVu giving them a single source of truth and magical moment of visibility for the business.” – Dan Young, VP of Product, LawVu.
Data-driven Legal Leadership
Live presentation followed by Q & A
Team workload and visibility
1. The types and volume of work
Knowing the types of work that the legal team is working on is one way to gain visibility and understanding over how the legal team spends their time. By looking at the types of matters and contracts that come into legal, it also helps to understand where the legal team’s work is being driven from and to showcase how the legal team is supporting the wider business.
Combining the types of work with the volume of work over time is useful to:
- identify trends that will help to decide whether there’s a need for additional resources and
- optimize the distribution of work to better manage team capacity.
“We can see the volume of work that’s coming in. I can identify how much of that work’s being done in-house by our legal team, I can identify how much of it’s been outsourced, and I can give a monetary value to the in-house component and what it would cost if we didn’t have an in-house team,” – Fiona McLeod, NCC
2. Key dates and tasks
Surfacing important dates, such as contract expiry dates, allows the legal team to prioritize work and be proactive with tasks that are in need of attention, ultimately improving efficiency and control of risk.
3. Turnaround/cycle times
Another useful key metric or data point is the time cycle-time of matters. By looking at how long a matter type is open, the legal department can understand which types of matters are typically open for longer or shorter periods of time.
This allows you to identify outliers early and demonstrate whether cycle times have increased or decreased – showcasing an improvement in efficiency to the wider business.
4. Volume vs strategic value in work
The highest volume, lowest strategic value work is typically the category of work most suited for automation solutions.
By rating each matter or piece of work for its strategic value, you can then compare this against volume and understand what you should be trying to automate, or conversely, spend more valuable time on.
Business engagement and value
5. Self-service vs supported work
Tools like LawVu can offer self-service features such as contract automation or knowledge base ‘how-to’ articles. Tracking the use of these tools by the wider business and comparing that with how much legal advice/support is provided by the legal team can help you demonstrate the value that legal is providing to the wider business as well as determine where operational efficiencies can be driven in the future.
It’s also helpful to see the differences between the use of self service tools such as wizards and templates that allow the business to create their own contracts and upload contracts to the CLM for review. These insights can help identify which contract types could possibly become templated, enabling the business to better self-serve some of its legal needs.
6. Risk vs value
With contract management systems such as LawVu, you can grade each contract or matter according to its value to the organization and its objective risk.
At the end of your reporting period, you can then surface a beautiful picture of the overall value of contracts or deals that the legal team has unlocked and the risk it has managed. Data like this is a great way to showcase the value that the legal team is providing to the wider business.
7. Platform usage
Metrics uncovering platform use is often overlooked. However, they can help identify how your business colleagues are engaging with your legal technology and therefore the legal team.
Beyond monitoring user activity, the legal team has a wealth of knowledge. Knowing which articles or guides the business uses the most is a great way to understand what’s working and what’s not. It also helps to decide or keep track of popular articles that may need to be updated.
Vendor engagement and spend management
8. Budget vs spend
Tracking your budgets for both internal matters and outsourced legal work (on a per-firm basis) against your actual spend is important for a number of reasons. The main reasons being that you can more accurately estimate budgets in the next period and also keep on top of the firms that are not keeping to budget, enabling more effective spend management overall.
9. External legal spend by matter type, department, team, or region
Measuring legal spend on outsourced matter types can be incredibly valuable. For example, it can help you understand whether there is a particular practice area in which there is a significant amount of legal spend, and consider whether it would be more cost-effective to bring this work in-house. You may also discover that you’re spending a huge amount of budget on outsourcing work in a particular practice area, and that’s because you simply lack the capability in-house rather than the capacity. Findings like this could help you decide whether to increase budgets on training, onboard specific expertize, or continue to engage with outside counsel.
10. Ratio of outsourced work: in-house work
This metric, combined with the metrics above, quickly paints a solid picture for a leader in legal operations or a General Counsel around the type and volumes of work being outsourced in comparison to the work completed in-house. Beyond volumes, if you can easily compare and report on details of matters being handled internally and externally – such as type, complexity, department, and risk level, you can make better decisions about resourcing, staffing and budgeting with internal and external partners.
“Now we have the data to back up where our time is being spent, the complexity of the different matters, and whether we have the right skill sets in-house”. Rosanna Biggs – General Counsel – Linktree
Hopefully, we’ve helped identify some key metrics and use cases worth applying to your in-house legal team or function, and we’ve geared you up to consider some new or alternative approaches to structuring data, ultimately, getting you even closer to making those data backed decisions.
Whether you’re at the beginning or middle of the metrics journey, we recommend checking out a tool such as insights and reporting within LawVu’s legal workspace. You can also learn more about where to start with reporting including what data to capture, how to capture it, and common reports that can help unlock insights and better decision making for your legal team as part of a dedicated Reporting course within the Legal Tech Fundamentals Certification. It’s free and takes only takes a few minutes to complete!