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Key Performance Indicators (KPIs) are quantifiable metrics that highlight how well a team or organization is moving towards its goals. Creating and regularly reporting on KPIs ensures greater accountability for legal teams to keep improving how they operate — improvements happen if progress is tracked — as well as a greater sense of accomplishment and fulfillment if strong results are shared and made visible to leadership.
Some organization-level KPIs can be obvious — is revenue growing and are expenses reasonable? However, monetary KPIs only tell part of the story of how well a company operates. How can we evaluate the performance of departments that don't have a clear direct line to financial performance? Historically, it can be very difficult for Legal to create KPIs, as much of the work that Legal takes on is responsive and tied to company initiatives, which are often large-scale projects like new country expansion, ensuring a new product is ADA compliant, or GDPR compliance.
Some overall KPIs for legal departments might include:
When it comes to sub-departments in Legal, there are a few areas where it’s been possible (and encouraged) to create measurable KPIs:
For other areas of Legal, it can be helpful to have a strategic planning process on a quarterly basis (for startups and growth companies), or at least on a 6 month basis (for more mature companies). This process should comprise a mix of tracking ongoing projects, which should ideally occupy 75% of the time until they’re closed out, and allocating 25% to new projects added to the slate. It’s important to ensure that there’s a good balance of short term projects that can help increase momentum and are quick and easy to check off, along with longer term projects that span across multiple quarters
Remember, the relevance of each KPI hinges on the context and what will drive meaningful change at the company. While the below is a comprehensive list of sample legal team KPIs, it’s important to concentrate on the KPIs that directly correlate to success for your specific team and organization. Too many KPIs can dilute focus and result in too much time spent tracking, analyzing, and reporting.
Getting KPIs right is a multi-step process. Learn more about KPI best practices here.
Monitoring the entirety of contracts and their related workflows equips legal departments with a clearer insight into the operational efficiency, enables fine-tuning of involvement, response times, and overall contribution to business dealings. Key metrics include:
Tracking the trajectory of intellectual assets, from patents to trademarks, not only safeguards a company's unique propositions but also emphasizes its ability to innovate. Key metrics include:
Understanding and optimizing budget and professional services spend ensures that the department operates within its fiscal limits (is no more than X% of the company’s annual revenue) while still achieving its core objectives. Key metrics include:
By quantifying and analyzing litigation metrics, companies can anticipate potential risks, effectively plan defense strategy, and understand the financial implications of their legal proceedings. Key metrics include:
Learn more about how Streamline AI can help you track your legal team's KPIs automatically by scheduling your free demo today.
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