4 Legal Department Metrics You Need to Track

Identifying the legal department metrics that clearly illustrate how well your in-house team is managing their legal work—and where they can improve—is no easy task.

If your data is scattered across documents and spreadsheets, simply pulling it all together can be a major project in and of itself. And once you have all those data points in-hand, combing through it all to find the most impactful metrics can feel like drinking from a firehose.

Fortunately, there is a collection of tried-and-true metrics that data-driven in-house teams have turned to in order to better understand their legal department’s performance. Below, we’ll outline four of the ones you should add to your metrics tracking program to affect meaningful change.

Metric: Matter Risk and Complexity

It likely goes without saying, but not all legal matters are created equal.

That’s why having insight into a legal matter’s level of risk and complexity is important—because it allows you to have a more comprehensive understanding of how much time and attention each of your legal department’s matters will require.

Why It’s Important

If you’re not tracking this aspect of your matters, you may find yourself in a situation where an individual or team appears to be working on fewer matters, when in reality the demand placed on them is actually increasing due to the high complexity of the matters coming into their workflows.

How to Track It

To track risk and complexity, require that your in-house team members classify matters as either low-, medium-, or high-risk and complexity when opening a matter in your e-billing and matter management system.

This, of course, requires a bit of work up-front in order to make those designations. However, an initiative like this can really pay dividends down the road by painting a fuller picture of the level of work your legal team is engaged with.

Metric: Outside Counsel Guideline Compliance

Outside counsel guidelines are used by in-house teams to outline their expectations regarding how outside counsel should manage matters, billing practices, budgets, and other aspects of their work.

However, it doesn’t matter how exhaustive your outside counsel guidelines are if they’re not being complied with.

Why It’s Important

Ultimately, you want to do business with outside counsel firms that strive to meet the standards you set for the legal work you send their way.

By tracking guideline compliance, you can identify which firms have adhered closely to your guidelines, and build a case for a deeper conversation around compliance with the firms who haven’t.

How to Track It

With Brightflag, you can easily pull data on the percentage of spend billed in breach of your outside counsel guidelines for each firm. That’s because Brightflag’s legal technology platform leverages its patented AI to automatically review every invoice line item against your outside counsel guidelines and flag any work that was not in compliance.

This automation will give you a clear sense of how effectively each law firm addresses your billing requirements, and even allow you to benchmark that compliance against other firms.

Metric: Spend-to-budget

Legal’s reputation as a reliable financial steward within the organization is contingent on its ability to effectively manage its budget.

Tracking legal spend against budget at the overall and practice area level gives your in-house team the visibility they need to improve their financial decision-making and make budget management possible.

Why It’s Important

At the overall level, this metric shows how your spend is tracking against legal’s budget for the year.

However, this metric becomes more meaningful for proactive financial management if you also track spend-to-budget at the practice area level, because it’s at this level that it can be used to address potential issues before they become significant problems.

For example, there may be instances where your overall spend-to-budget is on-track, but diving deeper into practice area spend-to-budget reveals that litigation is already at 180% of budget. Knowing this could spur your legal team to reassess resourcing and seek out more cost-effective solutions that will mitigate any future issues this particular budget overrun might cause further down the line.

How to Track It

Create your overall and practice area budgets for the year in your e-billing and matter management software. The system can then automatically track spend to each of these budgets in real time. Here’s an example of what this looks like in Brightflag:

Metric: Satisfaction Scores

Ultimately, the legal department exists to deliver legal services to the business.

Leveraging the key metrics outlined above can help your legal team better serve that goal. But an additional layer of metrics can also be rolled out to measure the effectiveness of the above programs, and the overall satisfaction of the stakeholders within the business with the in-house team’s legal service delivery.

Satisfaction scores can serve as key performance indicators (KPIs) that shine a light on how effectively your organization feels your legal team has handled their requests for legal services.

Why It’s Important

Getting an outside perspective on how well your in-house team is managing their work can illuminate areas of strength. It can also highlight areas where your legal department’s operations are ripe for improvement.

How to Track It

Have someone on your in-house team (e.g. legal operations) work on implementing a simple survey in a tool like Google Forms or Sharepoint that asks these two questions:

• How satisfied are you with the legal services provided to you by the legal department? Rate on a scale of 1-5, from very dissatisfied to very satisfied.
• What’s the reason for your score?

Keeping it short and sweet will increase your chances of receiving feedback from those being surveyed. To track progress, you can send this survey out quarterly to everyone in your organization that requests legal services.

Conclusion

The metrics here can help your corporate legal department answer key questions about the value legal provides to the business, enhance operational efficiency, improve the perception of legal within the organization, and chart a clear path forward.

However, there are several other metrics that you should consider tracking as well to get the most from the data your legal department is collecting.

For a full breakdown of all the legal department metrics your in-house team needs, download Brightflag’s free e-book, “Legal Department Metrics: A Guide to Measuring and Improving What Matters.”