KPI management for Legal Departments

The pressure is on for legal departments to demonstrate that they are taking control of their department’s spend. They need to align their day-to-day performance with the goals of the business.

Keep track on KPI’s by using a smart legal tech solution. Or take a head-start on setting-up your KPI’s with the advice of our Digital Legal Experts: Hans Van Heghe and Yves Lefere.

What is a KPI?

A key performance indicator (KPI) is a type of performance measurement. KPIs measure and evaluate the ratio of success of an organization or a particular department, team or activity (such as projects, programs, products and other initiatives) in which it engages.

The use of KPI’s in Legal

Common view
Most managers or directors experience and see KPI’s as a “controlling” mechanism. A mechanism to stretch the minimum performance of a team or department, and to increase performance year after year. On the other hand, team members experience stress to achieve the predetermined KPI’s.

More positive view
However, especially for Legal Teams, using KPI’s is also a way to “sell” the importance of the Legal team within the organization. You are able to show the risks you manage and reduce, and the value you bring to the organization. In addition, achieving KPI’s fosters team spirit and boosts the motivation of each employee.

Setting up KPI’s for your team

No clue what to do to set up KPI’s for your legal department? Basically, setting-up KPI’s for your team means:

1. First thing to do is figuring out what you want to measure and why it’s important for the legal department.
2. Second, determine what information you have that can allow you to make the measurement.
3. Third, create a format that allows you to present the KPI’s – and your progress against them – in the most straightforward manner possible but with a little flair (a dashboard).
4. Finally, think hard about what you want to share outside of the legal department.

Top 5 KPI’s in Legal

In general, looking as experts to Knowliah’s wide customer base in Legal, we see a number of potential/applied KPI’s (where in most cases, the Knowliah solution can deliver metrics) for short or longer periods:

Internal Efficiency

• Average processing time per matter
• Deadline compliance (number of deadlines not met / total number of matters x number of deadlines)
• Proactivity compliance (number of advices / number of litigations)

Service levels to the business

• Average time providing answers, number of answers delivered
• Average time reviewing a contract, number of contracts (x versions) delivered
• Availability of an up-to-date knowledge base, number of wiki-articles available/used

Compliance to regulation

• Applicable regulations that are monitored
• Number of identified non-compliances
• Total number of defined compliance profiles

Risk mitigation

• Number of applicable risk domains
• Number of early-warning-signals
• Number of risk mitigation actions

Success on litigation

• Number of litigations compared to total number of contracts
• Number of wins on litigations compared to total number of litigations
• Value of lost litigations