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INFOGRAPHIC: Cut Costs and Increase Profits with Legal Metrics

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Metrics are invaluable for providing insight into how a legal department or law firm is doing. Analysis and application of the data is crucial in order to experience real progress. This infographic is based on our recent white paper, Cut Costs and Increase Profits with Legal Metrics. It covers which metrics to track, as well as considerations for how to use and apply these metrics towards your organization’s goals.

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INFOGRAPHIC: Cut Costs and Increase Profits with Legal Metrics

  1. 1. AFA METRICS CUT COSTS AND INCREASE PROFITS WITH LEGAL METRICS CUT COSTS AND INCREASE PROFITS WITH LEGAL METRICS How Corporations and Firms Can Go from Collecting Data to Taking Action As the legal industry continues to undergo significant change, metrics are emerging as a valuable tool for both inside and outside counsel. are capturing metrics that inform efficiency decisions - 2016 LLM, Inc. survey FOR CORPORATE COUNSEL asked to cut costs and do more with less, metrics provide important insight for key decisions and help manage inside and outside counsel. FOR LAW FIRMS, metrics can quantify their success, build stronger client relationships, and deliver information that is critical to maintaining profitability and competitiveness. SPECIFIC METRICS FOR SPECIFIC GOALS LITIGATION METRICS METRICS TO MANAGE IN-HOUSE COUNSEL CORPORATE COUNSEL Metrics can help optimize business and make a firm more profitable overall, such as by examining litigation. Metrics can help determine an AFAs effectiveness and better plan and budget for future AFA usage. FINAL THOUGHTS Metrics to consider if you manage an in-house law department. What gets measured, gets managed. -Peter F. Drucker FIRMS SPEND VS. BUDGET (MACRO LEVEL) - Spend by firm - Spend by legal service type - Firm scorecards / evaluations - Inside/outside spend as percentage of revenue DATA COLLECTION AND CONFORMATION METRICS FIRMS' SCORECARDS/EVALUATIONS RATE METRICS - Percentage of hours received at discount rates - Average cost per hour of inside attorney time ANNUAL SPEND - By practice area ALL COSTS SETTLED VS. BID RATE FREQUENCY OF BID WINS ACCURACY OF BIDS SPEND BY TIMEKEEPER (TK) LEVEL AVERAGE HOURLY BILLED RATES BY TIMEKEEPER LEVEL Junk in results in junk out. Spend by matter type Average cost of open matters Outliers in cycle-time and budget Total cost of outcome BENCHMARKS FROM INDUSTRY PEERS EXPENSES FROM LAW FIRM INVOICES SATISFACTION SCORES FROM CLIENTS TIME METRICS FROM IN-HOUSE LAWYERS - Rees Morrison of Altman Weil ONLY 21% OF CORPORATIONS AND 17% OF FIRMS Bottom line: Track what’s important to you. Download the full metrics white paper. llminc.com/legalmetricsWANT MORE? 60% of firms and corporations reported using an AFA for non-transactional work in the last 12 months RECOMMENDED STARTING POINT: QUESTIONS TO CONSIDER: Identify where you currently use or keep the data (business data source + owner), then work towards how to access that information and CENTRALIZE IT. How frequently is the data collected? How frequently is the data reported? Is there a formula to be applied? THE NUMBER OF AFAS BEING USED BY WHAT MATTER TYPE WHAT PERCENTAGE PER DEPARTMENT OR PRACTICE AREA WHAT PERCENTAGE OF TOTAL LEGAL SPEND, TOTAL EXPENSES BY FIRM FOR PARTICULAR GROUPS WHAT WAS THE TOTAL COST OF OUTCOMES BY TYPE Have a clear understanding of what the goal is in taking a specific measurement Commit to proper collection Take action! Use a sound software system for ease of data visualization

Metrics are invaluable for providing insight into how a legal department or law firm is doing. Analysis and application of the data is crucial in order to experience real progress. This infographic is based on our recent white paper, Cut Costs and Increase Profits with Legal Metrics. It covers which metrics to track, as well as considerations for how to use and apply these metrics towards your organization’s goals.

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