ANALYSIS: Legal Departments Are in the Dark on Legal Ops Value

Measuring the value of legal operations provides corporate legal departments and law firms with information needed to make informed decisions, but many legal departments lag behind firms when it comes to tracking this data. This leaves them in the dark about their legal operations’ value, potentially impacting a department’s ability to operate optimally.

In-House Trails Law Firms

According to Bloomberg Law’s 2021 Legal Operations Survey, only 34% of legal department respondents say their organization has a formal way to measure legal operations value, compared with 63% of law firm respondents. While this difference could be explained by the notion that law firms just naturally track more legal metrics, such as billable hours, it doesn’t mean that legal departments shouldn’t strive to measure value.

The breadth of legal operations as a field makes these figures more concerning, as it encompasses most aspects of a legal department.

Departments that fail to measure the value of their legal operations may fail to spot issues within their practices that simple measures could detect. This could affect the bottom line and productivity, as opportunities for improvement, such as inefficiencies, may go unnoticed.

Methods to Measure Legal Ops Value

If your legal department does not formally measure legal operations value, it can start by measuring:

• the efficiency of your lawyers in completing work product or resolving matters;
• the level of internal and outside counsel spend;
• the distribution of internal work allocation among lawyers;
• the effectiveness of matter and project management practices across the department; and
• other key performance indicators established by the department

The Benefits of Measurement

Legal departments stand to benefit by selecting formal measures to assess their legal operations and tracking those measures over time to recognize changes in value. Not only can measurement provide perspective on where they stand, but it can also lead to more informed decisions and the establishment of better practices.

Bloomberg Law subscribers can find additional resources on our In Focus: Legal Operations page.

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