In today’s world, in-house legal teams, alongside other departments, are being challenged to prove their value to the organisation.
As a whole, the legal profession is used to dealing in the currency of language, exceptional word power a renowned trait. However, the increasing use of one four-letter word is causing angst among many in-house teams. And that word is… data. In a world where the bottom line is king, gut instinct doesn’t cut it anymore. It isn’t measurable. Data trumps opinion at every turn. For legal teams and leaders striving to showcase their value, embracing data is not just an opportunity – it’s a must.
With this continued focus on value, in-house legal teams are discovering that data is actually their friend, helping them to speak the language of the business. Buried among the myriad daily transactions undertaken by your legal team is a goldmine of information that demonstrates its value.
KPIs are a great way to leverage this data and a handy tool to make the language of the business easy to understand. Defining and using KPIs well not only increases your ability to effectively communicate value, it also helps you elevate the impact of your function.
How to start using the power of KPIs as a legal team?
Think of data as a compass. It’s value is in pointing you in the direction you need to go. Data helps you to make strategic decisions that align with organisational objectives, positioning the legal team as genuine business partners.
When combined with metrics, data provides direction. It can act as the map guiding your team to becoming a more impactful function within your organisation.
KPIs are one of the best methods you can use as a foundation. Not only can legal teams use KPIs to set baselines and report progress, you can also use them to identify issues, and create opportunities to optimise existing legal workflows and processes.
They are a strong starting point for evaluating the accomplishments and influence of the legal team within the context of the wider business objectives.
KPIs are a quantifiable measure. They have no truck with personalities and office politics. Done well, KPIs offer legal teams an accurate assessment of how well they’re supporting specific business goals, such as revenue targets, scalability, or profitability.
What KPIs should in-house legal teams track?
As we said, there is a goldmine of data buried in the day-to-day work of the legal team. However, which pieces of data should you focus on?
These are some of the KPIs legal teams can start with. KPIs like these will help to start creating and communicating a clear picture of the connection between your broader business and the work done by your team.
#1 Volume of work
Volume of work paints a clear picture for executive leadership of where your legal team is spending time. When combined with other data points such as value, risk, and business unit or type, this can go further to showcase how that time relates to strategic business goals. Reporting on volume of work by business unit or type helps the legal team to craft a narrative around how your work is supporting specific teams and business priorities.
Shaun Plant, LawVu’s chief evangelist and author of “How to make in-house a powerhouse”, shares why that volume of work is one of his favorite KPIs “because it recommends other data points that, when combined with ‘Volume’, help you to craft a narrative about the way your work is supporting and enabling business priorities and strategic outcomes”.
#2 Cycle times
As a KPI, cycle times is impactful when applied to the value-adding tasks your team engage in to drive commercial or risk outcomes, as it shows you’re prioritising the right work. For example, for organisations with a sales focus, turnaround time for sales contracts is worth measuring because those contracts grow the business. For other legal work, it would be key matter types, such as resolving litigation or other issues that typically block or slow down progress. Measuring trends against these can show the impact of strategic investment, staffing or technology.
#3 Legal spend
KPIs surrounding legal spend provide valuable insights into cost management, resource allocation, vendor relationships, and risk mitigation. It also shines a light on the overall performance of your legal department. Legal spend is not just outside counsel work, it’s all your internal work and costs, so finding a reasonably easy way to collate this data is critical.
#4 Internal client satisfaction
The way your legal team is perceived across the wider business is a key measure of its success. Anecdotal evidence of internal satisfaction will be easy to come by. However, hard numbers are vital if you want to set benchmarks, show progress, and demonstrate your role as a strategic partner.
#5 Innovation
Implementing legal technology and process innovation will improve the way your team manages their work. For example, using tools that help the business self-serve solutions to frequent issues without requiring help from legal should have stats to show how legal has reduced the volume work or improved outcomes.
How can technology support legal teams with KPIs?
Technology is the most efficient way to gather and harness information. It will also ultimately save you time and money. If you haven’t yet adopted tech of some kind, it’s time (past time actually!) to light a fire under your ways of working. Technology should support your use of data to showcase value in the following ways:
- Acts as a single source of truth that collects the data you need and makes it readily available.
- Easy to use reporting functionality that allows you to identify insights, stories, and monitor KPIs so you can create and share reports without spending too much time on it.
- If you’re using tech to improve process and service delivery, that’s valuable on its own. But they should also have reporting features to help you measure and evolve your use of that technology to get even greater outcomes.
This article was written by Shaun Plant, Chief Legal Evangelist at LawVu. If you want more information on KPIs for legal leaders then check out LawVu’s useful guide on KPIs.
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