For the modern corporate legal team, data isn't just a buzzword; it's a vital tool.
As budgets tighten and in-house counsel are expected to take an increasingly strategic role in the business, it’s no longer enough just to mitigate risk – there’s a rising demand to produce tangible evidence of the impact that legal is having on wider business outcomes.
The good news is that, whatever the size or shape of your corporate legal team, there’s a wealth of untapped data sitting beneath your daily workflows – data which, when analyzed through the lens of wider business objectives and their corresponding legal KPIs and legal metrics, can:
Read on to learn more about why legal analytics have become a non-negotiable for modern in-house counsel, how to get started with the right legal KPIs and legal metrics, and how to make sure you’re always measuring what matters to communicate the value of legal.
Legal analytics are the key to unlocking the power of data for in-house counsel.
By leveraging strategically chosen legal department metrics and legal department KPIs, you can measure your team’s performance, reduce your legal spend, and gain insights into the things that matter to your business – all of which allows you to reduce reliance on instinct and instead leverage the more power of data-driven in-house legal decision-making.
In short, smart use of legal data analytics, insights and reporting gives corporate legal departments a critical opportunity to align their priorities with company goals, showcase the value of legal, and operate more strategically.
Data analytics in the legal industry are a relatively new phenomenon when compared to other business sectors – and particularly in the case of corporate counsel. Traditionally, in-house legal teams have not been expected to report on their activities using legal analytics in the same way as their colleagues in finance, accounting, or marketing.
For a long time, this made sense – legal was seen primarily as a support function whose main job it was to protect the business from legal risk. As long as problems were being solved, there was no urgent need to undertake detailed legal department reporting.
Because of this, while their peers in other departments have long taken advantage of specialist technology, legal teams have also historically been deprived of the benefits of data-driven legal analytics software.
The main driving factors behind tech adoption are usually to boost efficiency and optimize team productivity – neither of which, until recently, have been critical concerns for corporate legal. In the past, the upside of this was that detailed legal department reporting was a minimal (or even non-existent) requirement.
However, the downside is that legal teams have been left to make do with inefficient emails and spreadsheets for managing everyday work, have struggled to justify and secure legal tech budget, and have become chronically undervalued as a core business function.
As the increasingly competitive global landscape continues to push businesses to tighten budgets and deliver more with less, the expectations placed on corporate legal teams have changed. It’s no longer enough just to mitigate risk – in-house counsel are now required to consistently justify their resources, head count and strategic value to the business.
All of this means that data-driven insights now matter to in-house legal more than ever before – and with emails and spreadsheets failing to deliver the accuracy, speed and reliability required for actionable legal department reporting, robust legal analytics are now the only watertight way for corporate legal to meaningfully measure, quantify and demonstrate their value.
By capturing, measuring, and leveraging your legal team’s data with the support of the right legal analytics software, you’ll optimize the efficiency of your legal operations and maximize your service delivery to the business – all whilst ensuring that your legal team is taken seriously not just as a support function, but as a strategic business partner.
Unfortunately, despite the undeniable power of data for in-house legal, many corporate teams still struggle to kick off their legal data analytics journey. The good news, however, is that getting started is a lot simpler than you might think.
For corporate legal departments who have historically pinned their value to technical knowhow, legal instinct, and professional experience, the prospect of embracing legal analytics for the first time can be an overwhelming one.
However, once you understand where to start with insights and reporting, you can take some simple first steps towards becoming a fully data-informed legal team.
A key element of any successful legal data analytics strategy is to identify which data to capture in order to unlock the insights that matter most to your legal department. From intake, contracts and legal matters to outside spend, all of your daily workflows will be a rich trove of data – and each one can theoretically be analyzed to track past and current performance, predict future trends, identify potential issues before they arise, and justify additional resourcing.
To work out which legal analytics datasets are most valuable to your legal team, you’ll need to first identify your overarching goals and objectives, both within your own department and across the wider business. The most effective way to do this is through the use of corporate legal department KPIs (Key Performance Indicators).
Once you know which overarching legal department KPIs you’re aiming for, you can work backwards from there, identifying which legal department metrics you’ll need to measure to meet your KPIs – and, finally, the precise data points you’ll need to surface to make all of this happen with the help of the right legal analytics software. Continue reading to find out about the 5 critical legal KPIs every legal leader needs to know.
Before you can decide which legal department KPIs you want to track, and the data and metrics you need to give you the legal analytics and insights you need, there’s one critical question to consider – where is the data that you want to leverage currently located and stored?
If you’re currently working mostly out of email and spreadsheets, or even out of one or more legal technology tools, the chances are that, right now, the data you need for effective legal department reporting is fragmented; spread across multiple locations and pieces of software.
However, your data is by far at its most powerful when it is cohesive and stored within one “single source of truth” – a central repository within which every fragment of information generated by all your legal workflows can be stored, organized, managed and analyzed.
Many legal technology tools, such as CLMs, matter management and e-billing tools, will include legal analytics software which collates data pertaining to their respective workflows.
Other comprehensive tools, like the LawVu legal workspace, are able to consolidate things even further, bringing together data from your contracts, matters, and spend all into one place – a truly single source of truth.
While it is entirely possible to surface data, monitor legal department metrics and meet legal department KPIs without a centralized source of truth, having everything in one place makes the job immeasurable quicker, easier and more precise, ultimately leading to better oversight and more accurate legal department reporting.
KPIs (Key Performance Indicators) have long been a foundational tool for countless business functions – not just legal. KPIs work by setting a specific business objective – and measuring performance over time to quantify whether or not that objective has been met.
KPIs for the modern in-house commercial legal department are an incredibly useful way to capture and measure the value of the legal function. When chosen strategically, legal department KPIs can be aligned with the objectives of the wider business to demonstrate, in hard numbers, exactly how the legal department is contributing to those wider goals (for example: revenue targets, profitability, or scalability).
Whatever they are focused on, your critical KPIs should act as a guiding light for your overall legal data analytics strategy. By choosing objective-based goals, you’ll find it far easier to determine which legal department metrics you need to measure – and which datasets you need to capture as part of that process.
Because no two corporate legal departments (or businesses) are the same, there is no definitive way to approach legal department KPIs. To determine your objectives, you’ll need to understand what your business’s unique goals are – and what role legal can play in achieving them.
If your legal department conducts a lot of contract work, for example, you might choose legal KPIs which focus on improving contract turnaround time, thereby influencing company-wide revenue goals tied to the value of those contracts. If your business is prioritizing active growth, you might choose legal KPIs which focus on optimizing the cost-efficiency of your legal function.
However, to get you started, there are a handful of critical KPIs which are usually of high value to any legal department. Read on to learn more about each one – and why they matter.
While your choice of legal department KPIs should always be carefully tailored to your own corresponding business objectives to give you the insights you need, there are, nonetheless, five critical KPIs that every legal leader needs to know in order to implement an effective legal data analytics strategy.
These five legal department KPIs generally align with the most common strategic business priorities for corporate legal teams, and are a great starting point for any function. They are:
For example, you might track the volume of contracts you have processed and their value – or the amount of work you handle from specific departments, or associated with specific business objectives.
For example, you might measure increases or decreases in speed of completion of high-volume, low risk contracts, or track invoicing turnaround times.
For example, you might measure your total legal spend as a percentage of company revenue, or the ratio of inside versus outside legal spend.
For example, you might track NPS or CSI ratings year-on-year, or trends in the use of intake initiatives for interacting with legal, such as self-service templates.
For example, you might track the percentage of legal staff and business users adopting a specific legal technology tool over time.
Once you’ve identified the legal department KPIs which will deliver the most valuable insights into the work of your legal team, you can start drilling down into the foundational legal department metrics that you’ll need to track to meet your goals.
If you’re an in-house legal leader taking your first steps into legal analytics, one of the first things you’ll notice is the sheer quantity of data generated by your daily workflows.
Not all of this information is of equal value – and to make the leap from raw data to insightful reporting, you need to make sure you’re only measuring what matters most to your in-house legal department.
The first step towards creating a focused lens for analyzing your data is to set strategic legal department KPIs which reflect your wider business objectives. Once you have established which legal KPIs you’re working towards, it’s time to identify the legal department metrics you’re going to track to monitor your progress (ideally with the help of legal analytics software).
The easiest way to understand the relationship between legal KPIs and legal metrics is think of legal KPIs as the story you want to tell (for example, that your legal department is growing in efficiency year-on-year) and legal metrics as the data-driven evidence you need to back up that story (for example, the rising number of legal matters your team has handled each year).
Your legal analytics strategy should therefore be built like a pyramid – with your legal KPIs at the top and the foundational legal metrics that support them at the bottom.
Just as with your KPIs, the legal metrics you choose to track should be carefully curated to suit the goals of your individual business function.
However, if you’re working with some, or all, of the five critical KPIs that every legal leader needs to know, here are some examples of some corresponding legal metrics that you might concentrate on:
For more detailed guidance on the key legal metrics to measure in order to support some of the most valuable legal department KPIs, explore our full guide to these five critical KPIs.
And if you’re still unsure about where to start, you can also check out the top 10 metrics leading in-house legal departments are tracking and why – but remember, your chosen legal department metrics will always need to be tied to strategic outcomes in order to deliver the most value.
To give focus and direction to your data and legal analytics strategy, it’s critical to first decide on the right legal KPIs and legal metrics to meet your business goals. However, surfacing and organizing the data you need to serve these objectives can be tricky and extremely time consuming if the information you need is buried, fragmented, or difficult to locate.
To translate the data you need into meaningful legal department reporting, you need a simple, easy to use and comprehensive way to pull it all together – and that’s where the value of a legal metrics dashboard comes in.
An invaluable tool which can be included as part of legal technology with built-in legal analytics software such as the LawVu legal workspace, a purpose-built legal metrics dashboard provides a consolidated view of your chosen legal metrics, all through critical real-time data.
A dedicated legal metrics dashboard is one of the most critical features to look for when investing in legal analytics software, and LawVu’s new general counsel dashboard is a great example.
Putting targeted critical data at your fingertips, the fully customizable GC dashboard lets you instantly convert raw data into actionable insights using three core features:
Without a clear, organized and customizable visual tool like the LawVu general counsel dashboard, making sense of your legal metrics will always be an uphill battle. But with your data at your fingertips, you’ll find endless ways to better manage your team, meet your legal KPIs, and make informed decisions.
To really showcase the value legal brings to the business, an effective legal department reporting strategy should leverage legal analytics in relation to two key elements of your work.
The first is your business as usual (BAU) output – the everyday workflows that run between legal and the wider business as the team handles issues, mitigates risk, and completes projects.
Business as usual legal metrics might not sound like the most glamorous aspect of legal department reporting, but this information is fundamental to data-driven decision making. By identifying patterns in workflows over time, ideally through a customizable and easy to interpret legal metrics dashboard, you can identify trends early and manage issues in a proactive way.
When business as usual legal metrics are captured and measured through the lens of legal KPIs which are aligned with wider business objectives, paying close attention to this element of your legal department reporting will yield substantial opportunities to quantify and demonstrate the value that legal adds to the organization over time – just by doing its basic “day job”.
Some examples of useful business as usual legal metrics that can support compelling legal department KPIs are:
To dive deeper into how to build a powerful legal analytics strategy for your BAU work, check out our guide to measuring what matters, or take inspiration from the top 10 metrics that in-house teams are currently tracking as part of their legal department reporting.
Or read on to explore the second element of effective in-house legal analytics – reporting on strategic impact.
We now know that there are two essential elements to include in your legal department reporting in order to showcase the value legal brings to the business.
The first focuses on your BAU work – but to really communicate the value of your department, you’ll also need to produce compelling legal analytics which reflect legal’s impact on higher business objectives.
The main reason that in-house legal departments are starting to prioritize legal KPIs and legal metrics more than ever before is simple: legal analytics are the key to remedying the fact that corporate legal work has, historically, been under-valued.
Why? Because the work of corporate legal teams has not traditionally been measured or quantified with data – and because it has too often been linked simply to fire-fighting, rather than strategic contribution to broader business outcomes.
Showcasing the strategic value of your legal team starts with identifying the right legal department KPIs — ones which don’t just evidence how much work you’re getting done, but which actively demonstrate how that work is helping to propel the business forward.
Once you’ve identified the legal KPIs which will demonstrate your strategic impact, you’ll need to start surfacing the right legal department metrics to back up your story with data – ideally through a dedicated legal metrics dashboard. Here are some examples of useful legal metrics that can help to evidence this broader impact:
You can learn more about how to use legal analytics to report on your impact on higher business objectives here. And for help identifying the right legal KPIs to demonstrate strategic value, our guide to the five critical KPIs that every legal leader needs to know is a great place to start.
For the modern corporate legal department, effective legal department reporting should always be grounded in strategic legal KPIs – and executed through targeted legal metrics which actively demonstrate the impact that legal is having on wider business objectives.
None of this is possible without the support of the right legal analytics software – but the good news is that this is now a central feature of many legal technology tools.
If legal analytics are a priority for your business (and they should be!) try to choose a legal technology solution which:
For a comprehensive overview of how to make sure you’re investing in the right legal technology software for your business, read our legal tech buying guide.
And to learn more about how the LawVu legal workspace can support you in rolling out a legal analytics strategy which demonstrates your team’s impact on broader business outcomes, simply book a customized demo today.
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