Goodbye Billable Hours, Hello Legal Dept. Performance Metrics

By Gabriella Khorasanee, JD on August 05, 2013 | Last updated on March 21, 2019

One of the main reasons you left BigLaw and became in-house counsel was so you could get away from the infamous billable hours. But, increasingly, corporations are looking for ways to measure the performance of their legal departments.

As the ACC stated: "You can't manage what you can't measure." Since what we're really talking about is cost control and management -- it can be divided in two general areas: spending and matters.

1. Budget v. Spend -- One of the most important questions is, are you staying within budget? If not, this could be a big red flag to executives. Either spending is out of control, or budgets are not realistic. Figure out where the problem lies, and fix it -- fast.

2. Spend by Matter -- It's important to note what different matters cost. It enables you to see what issues keep the legal department busy, and allows you to better allocate budgets.

3. Spend by Business Unit -- Very similar to tracking matters, knowing what each business unit spends on legal services is important for budgeting purposes, and getting a big picture idea of what legal issues are costing the company money. Depending on this figure, the legal department may choose to bring on more in-house attorneys.

4. Outside v. Inside Counsel Costs -- Corporations are always looking at what BigLaw is costing them, but it's important to know how much both BigLaw and in-house counsel cost. Comparing these expenses, and looking at the percentages, will highlight areas of saving, or unnecessary spending.

5. Invoice Savings -- BigLaw is always giving some discounts on the bills, an easy unit of measure is to tally how much you are saving on BigLaw bills.

1. Cycle Time -- How long does it take to handle a matter? Knowing how long typical matters stay open helps you determine if someone is taking too long on certain issues and not making effective use of their time.

2. Lessons & Training -- What lessons are you learning from dealing with different matters? Rather than setting these lessons aside, train the legal department so that the next time a similar matter comes up, less time is spent determining how to handle it.

3. Workload -- A great unit of measurement is knowing who is working on what, and how much. If you have a grasp on each attorney's workload, you'll start to see people who may not be carrying their weight.

We know keeping track of what you do every minute of the day is no fun, but it is important to track certain things to know if you are being as efficient and effective as possible. Don't put up a fight -- it may help you keep your job when cost-cutting becomes an issue.

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