AFA METRICS

CUT COSTS AND INCREASE PROFITS WITH LEGAL METRICSCUT COSTS AND INCREASE PROFITS WITH LEGAL METRICSHow 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 costof open matters

Outliers in cycle-time and

budget

Total costof 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