April 18, 2013
This is Part II in a series discussing the 10 powerful metrics that all corporate counsel should use to manage their legal departments.
In my first post about metrics every legal department should track, I talked about tracking spend to budget. In today’s post, I’ll talk about tracking staff workload and performance. Simply put, you can’t allocate your resources efficiently if you don’t know your department’s overall workload, nor can you measure individual attorney’s performance.
It’s slightly misleading to say workload is a “metric”. It can be several different metrics to measure how much work your legal staff has and how they are handling that workload. The starting point here is to know how many matters each in-house attorney is handling at any given time. What is considered a “full load” of course depends on the type of law each attorney practices, and in a smaller legal department attorneys may be managing matter covering a broad range of legal work. Regardless of the size of your legal department, over time you can get a sense of what is a light or heavy load to determine how to allocate these cases, or use this historically workload information to justify hiring more in-house counsel.
It’s also good to have any understand of how much outside spend that each attorney is overseeing. If two attorneys are each overseeing ten legal matters, but one has $5 million in outside spend while the other has $100,000, it’s a safe bet that the workload of the former counselor is greater than the latter. From a general counsel’s perspective, it’s also good idea to hold in-house counsel to their budgets. This gives incentive to the attorneys to hold the law firms handling their matters accountable to their budgets, with the overall effect being that costs in the department become predictable, or as predictable as legal costs can be. This can also be combined with average spend for common matter types that a company deals with to create internal benchmarks for high-frequency matter types.
Another useful metric is matter type cycle-time, or how long it takes for a matter to close from its inception. By measuring cycle-time, legal departments can determine how long an average matter of this type is open (like a contract review matter, for example), red-flag outliers early and show how cycle-times for these matters types have come down over time to demonstrate a legal department’s increased efficiency and value.