The top 10 metrics leading in-house legal departments are tracking and why

Mar 4, 2021

Reading Time: 4 minutes

In the following article we explain 10 legal department metrics high performing in-house teams are tracking and how they will help your team also 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. 

Why are we only now talking about metrics for the in-house legal function? 

We typically see that the in-house legal function has managed their workflow through emails and Excel sheets alone, with no easy way to collect structured data around what they’re working on. This means it’s near impossible to surface meaningful insights because there’s simply no data to pull from.” Tim Boyne, CSO LawVu

Team oversight

1. 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 multiple 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 their budget, leading to more effective spend management overall.

2. External legal spend by matter type 

Measuring legal spend on outsourced matter types can be incredibly valuable. It will help you understand whether there is a particular practice area on which there is a significant amount of legal spend and whether this would be more cost-effective to bring in-house in the future. 

3. Reason for outsourcing by matter type

By tracking the reason for outsourcing a matter type, you can optimise your hiring plan by understanding whether a body of work is commonly outsourced because of a lack of capacity or lack of capability.

When combining this metric with metric 2. above, you might see 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 rather than the capacity. A finding like that could help you decide whether you need to increase budget on training, onboard specific expertise, or continue to engage outside counsel. 

4. Ratio of outsourced work : in-house work

This metric, combined with metrics 2 and 3 above, paints a solid picture for a legal operations leader or General Counsel around the type and volumes of work being outsourced compared with being completed by the in-house team. 

Not only can you see the types of working being outsourced and why, but you can compare the volumes quickly against what’s being completed in-house. 

5. Outside counsel evaluations/NPS score

Wouldn’t it be great if every time you needed to outsource a piece of work, you could review a database of law firms and choose the appropriate firm based on their past performance?

The good news is – you can. 

By evaluating things like a law firm’s performance, knowledge of the company culture, and responsiveness, every time a piece of outsourced work is completed, you can build up a log from which you can then make better decisions in the future. 

The next time a new matter comes up for outsourcing, finding the best outside counsel or a highly rated attorney to work with is easy!

Team performance

6. 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 it’s 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.

7. Team capacity

We’re not proposing to log your time in six minute increments, don’t worry! 

Keeping track of your team’s capacity in terms of budgeted vs actual hours spent on strategic work or on specific matter types will transform how you manage your team’s capacity in the future. It’s easy to start keeping track of this in matter management tools such as LawVu and easily surface the data later.

Team value

8. Matter type cycle time

Another key metric or data point that is useful to measure is the 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. 

9. Risk vs value

With contract management systems such as LawVu, you can grade each contract or matter according to its strategic value to the organisation 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 show the value that legal is providing to the wider business. 

10. 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. 

I don’t think there are many in-house lawyers who could work twice as much as they do, so the question is how do we work more efficiently or focus on the work that is giving the most value to the organisation? Clearly technology is a key part in that because it gives you data analytics to make sometimes tough decisions around that sort of thing.” Katie Bhreatnach, General Counsel, Airways NZ