One of the ways to drive better outcomes through this methodology is to bring greater awareness of KPIs – exactly what they are and which goals they’re driving towards – to your team.
Yet it’s important to understand this: The way KPIs are used to steer decision-making within an organization using legal management technology is going to be significantly more effective than when KPIs are employed by an organization that’s not using this technology. Why? Because the data that’s essential to hitting KPIs is surfaced to the entire team through the dashboarding functions these solutions provide.
Some of the common KPIs that teams new to Legal Operations will want to start with will track and answer questions about:
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The number of open matters, their stage and status to get to average days open by matter type/category.
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Assigned matters by staff member and firm to get to resource allocation and optimization over time.
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Year-to-date legal spend and legal spend by matter type, to enable over year-over-year reduction of overall spend.
These metrics can certainly be useful, but as a legal department becomes more business- and tech-savvy, the questions it asks become correspondingly more complex. With today’s more advanced legal solutions you can move beyond simply reporting on metrics to answering these critical questions:
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“Are we getting the best value for this work?”
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“How are we doing against our usual trends?”
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“Which outside counsel firm are we utilizing for our litigation matters, and what percentage of those matters have returned favorable results for us?”
Most industry-leading legal operations automation systems today offer standard and interactive dashboards that provide real-time reporting and visibility into standard and advanced reports that track to conventional KPIs.
As legal operations and automation transforms many previously manual-oriented tasks, these dashboards also offer an easy way for team members to document performance and progress to senior executives on what formerly would have been hard to analyze or obscure. Examples of how this plays out?
Example: Reducing matter lifecycle. How long does it take the legal team to process a legal matter from open to close? Decision makers like to compare this KPI against industry averages because it is applicable to a number of areas. For example, how long is it taking the department to close litigation cases against the historical average? Or how long is it taking for the department to review and redline contracts now compared to the past?
Monitoring these cycle times can provide key insight into how responsive the department is to its business partners. Or, in the case of litigation, helps determine if the department is doing all it can to settle cases before they incur heavy outside counsel fees.
Example: Keeping team members on task. Related to cycle times, it’s important to ensure that legal matters don’t slip through the cracks and become major liabilities. Toward this end, reports for KPI tracking enables to you create visibility across the team that alerts attorneys to matters that sit idle for too long. “Tickler reports” distributed to targeted team members ensure that nothing is being missed, and there are no blind spots in your department.
The ability to understand and visualize these key trends allows you, as a Legal Operations professional, to proactively manage and address any trends that are detrimental to your department’s performance.