8. Strategic project(s). Typically, there is at least one strategic project or initiative in a legal department in a given year. It could be a major technology implementation, a cost-cutting initiative, the creation of a succession plan or a “three-year” strategic plan, or whatever. No matter what it is, if it`s important enough, it`s worth tracking progress via a KPI. For example, I once had a KPI to track the implementation of a contract management tool that we were using to track completion progress against plan. This KPI allowed us to quickly see if the project was on track or not, and if so, to ask why and what needed to be done to get it back on track. Given the wide range of applications, how should a legal department go about selecting the metrics they want to track? Some time ago, in collaboration with the Association of Corporate Counsel, we produced a webinar that addresses this issue (and more). Here are some “scenarios” to consider when identifying what data to collect and what key metrics to measure. However, before data collection is conducted, the objectives of introducing a data initiative or measuring against KPIs should be well documented and considered. The first step here might be to seek a conversation with the CEO or other organizational leaders who have an opinion on the performance that could be gathered.
In addition to collaborating with stakeholders, consider the comments and comments of the entire legal team. Legal reporting software creates a centralized database shared by all departments and reduces the complexity of measuring and reporting your KPIs. With SimpleLegal, you have access to an automated, easy-to-use analytics dashboard configured to track your specific KPIs in real time. You can create custom reports for senior management that highlight the spending areas you want to present. Schedule a demo to learn more about how we can help you simplify legal relationships. 1. Contract quantity. Fairly simple measure: how many contracts did the legal department conclude during the measurement period? It can be just a gross number or, better, a target set earlier in the year, such as 500 contracts per quarter.
I like this measure because I have always believed that one of the highest and best applications of the legal department is the conclusion of contracts, because contracts are the big one on the runners of the company. If you want to go into detail, you can break down the number of contracts by type, such as commercial, NDA, supplier, complex, simple, by value, or other types of contracts your department is working on. In the aftermath of the global financial crisis, when all eyes were on expenditure management in all departments of the organization, the General Counsel often reported exclusively to external consultants and expenditure management; As a cost center within an organization that had not exercised budget management in the past, this immediate response made sense. But now that nearly a decade has passed since that inflection point for the legal industry, have legal departments changed course in the metrics and KPIs they collect to demonstrate their contributions to the department? What can the General Counsel celebrate more than their ability to better manage outside counsel? This ongoing series explores why lawyers need to shift the KPI discussion from an exclusive focus on external consultants and external expense management to a holistic view that encompasses the efficiency and effectiveness of internal human resources. This series of articles also includes examples of data and performance metrics that a legal department of any size could consider. Despite good intentions and a robust data collection process, many legal departments often ask, “Now what?” Therefore, this series also provides examples of process improvements or other changes that a department could consider to increase departmental efficiency. It is sometimes observed that companies improve what they measure and measure what they want to improve. Legal departments that want to increase efficiency need to think strategically about which aspects of their performance they want to improve the most and measure accordingly. Efficiency, activity, personnel and cost are key factors that influence the performance of a legal department – and all of them can be measured in different ways. As consultants for the operation of legal services, we are often asked, “What should I measure for my department?” The answer is, “It depends.” (We know that`s not the answer you`re looking for.) You can also gain a good insight into the performance of your different practice areas in your department by looking at the hours and average rate of each practice area over a period of time.
Practice area-based metrics show how your work is distributed across your department, and these KPIs can make trends clearer. The data you collect on your spreadsheet should be the backbone of your report. However, it`s a good idea to distill the information you`ve gathered into a digestible format for your management team. Remember, your goal is to show company leaders the value of your legal team. Key performance indicators (KPIs) show how well a department is achieving your company`s goals. While KPI reporting has not always been the norm in the legal profession, expectations have changed. Now, legal departments need to be closely aligned with the company`s vision, budget, and priorities. Unfortunately, many legal departments face this new challenge without access to the kind of data generation software that would make KPI reporting automated and easy. 10. Customer Satisfaction. One of the most important things for a general counsel is how satisfied the company is with the legal department. While anecdotal information is helpful, the best way to understand this is to conduct a customer legal satisfaction survey, which measures satisfaction across a number of specific elements and generates an “overall satisfaction score.” The simplest KPI is an overall score.
We had a targeted overall satisfaction score and the goal was for 85% of respondents to have the same level of satisfaction – or more – with the legal department compared to the previous year. You can also ask those participating in the survey to give the department an alphabetical grade (“A” – “D”) and to draw on a “B” or better, or whatever best suits your situation. For many new legal operations professionals, developing meaningful KPIs is a top priority. Read on for practical tips and helpful resources. I know of a GC that has introduced KPIs for contract quantity and quality and for customer satisfaction (sales representative).