In House - The FindLaw Corporate Counsel Blog

3 Metrics to Live By: How to Evaluate Your Legal Department's Performance

Whether you're a legal department of one or in charge of a behemoth in-house team, managing a legal department is no easy task -- especially if you're doing it blindly. How exactly do you track your performance or know if you are maximizing your department's resources?

Metrics, of course. Thankfully, Thomson Reuters, FindLaw's parent company, has an extensive series on legal department metrics over at its Corporate Counsel Blog. We think these metrics should be integrated into every in-house teams' practice. Here are some highlights:

1. Spending to Budget Metric

It seems like this should go without saying, but legal departments need to practice effect budgeting. Apparently, many corporate legal departments simply don't keep an accurate account of what they spend, whether it's on outside counsel or other costs. Further, some don't budget for particular matters. Tracking your spend-to-budget numbers is one of the single most effective ways to predict and control costs, according to Patrick Johnson, Senior Marketer at Thomson Reuters.

2. Workload Metrics

When your attorney friends start talking about how great it must be to work in-house, free of billable hours, feel free to roll your eyes. Corporate counsel know that while billable hours may not dominate your professional life, they're still subject to demanding performance metrics. So put them to use!

Legal departments should understand how many matters each attorney is capable of handling at any given time, then determine if they are making the most of that potential workload. Similarly, workload metrics should incorporate an understanding of how much each in-house attorney is spending on outside services, including holding in-house counsel to their budgets. Your metrics should also measure the length of time it typically takes certain matters to be completed.

3. Spending by Matter and Unit

Here's where you can see where your legal department's work is really being generated -- and allocate your resources accordingly. How does the legal department's practice break down by matter type, whether it's litigation, transactions, labor, or intellectual property? Looking at what work makes up your department's portfolio can allow you to spot irregularities or focus on improving problem areas.

Similarly, tracking your departmental workload by unit, instead of matter type, can be equally revealing. Examining which parts of the company have the greatest legal needs can help you tailor your practice or address mismanagement. You should evaluate this information not just by the legal spending per unit, but by the types of issues connected to each unit.

Using these metrics to track your legal department's work can help you better manage your spending and workloads, as well as help you to demonstrate your value to the company as a whole. Of course, it also won't hurt when it comes time to ask for more money and more in-house attorneys.

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