Demonstrating the value of in-house Legal: KPIs and metrics that matter

More than ten years have passed since Bain & Company highlighted a perception gap: while 40% of CLOs believed their legal teams drove commercial value, only 14% of CEOs shared that view. Today, bridging this gap remains an ongoing challenge for legal teams.”

The most effective way for in-house Legal departments to demonstrate their value is to apply data-driven Key Performance Indicators (KPIs) as it is universally used and understood by the broader business. By adopting agile methodologies to execute strategic objectives, value can easily be measured and communicated. Here’s how to do it.

Agility: The need for speed

Gartner predicts that by 2027, Legal, Risk and Compliance functions will double their spend on technology, highlighting the ongoing shift toward data-driven decision-making. These tools have not only streamlined workflows but are also providing actionable insights that enhance operational transparency and strategic alignment.

Technology is giving glacial teams a big boost in becoming more agile, while continuing to accelerate the fastest adopters. By using workflow automation and productivity tools, agile legal teams generate data as a byproduct of daily operations, enhancing efficiency and enabling real-time performance measurement. This adaptability ensures they meet business demands effectively while reducing operational friction.

Agile legal functions are evolving from operational bottlenecks into strategic enablers. As McKinsey predicts, 75% of current S&P 500 companies may drop off the index by 2027, delivering a wake-up call for legal operations to be agile – lest they lose their standing.

It’s a numbers game

Previously, law firms and legal teams often highlighted their impact through anecdotal evidence and qualitative assessments. While these narratives still hold value, today’s business environment relies solely on data-driven insights to demonstrate effectiveness. KPIs such as legal spend as a percentage of company revenue, turnaround times, and client satisfaction scores (also known as Net Promoter Score, NPS for short) directly measure legal performance against business outcomes.

For example, a legal team’s ability to work on high-risk, high-value matters without increasing headcount demonstrates efficiently scalable contributions that resonate with strategic goals. This indisputable data showcases Legal’s value and helps with buy-in from the business to advance both departmental and organisational objectives.

Defining your North Star metric

To redefine Legal’s strategic role, teams must adopt a North Star Metric — this can be expressed through a simple formula:

Legal Drag is defined as ​“the extent to which Legal’s involvement impedes the generation of revenue or efficient execution of strategy”. By reducing drag, total Legal Value increases.

By aligning metrics with business outcomes, Legal can shift perceptions from being cost centers to strategic value creators, fostering stronger partnerships across the enterprise.

Five key KPIs for Legal teams

In-house legal teams across different industries may have a variety of objective focuses, but KPIs can serve as a universal compass to navigate challenges and deliver value towards reaching the North Star metric. By tracking these data points, teams can demonstrate their contribution to operational efficiency and strategic alignment. Focusing on these KPIs transforms the legal function into a transparent, accountable and indispensable business partner.

Cost per matter

Measuring the cost of handling specific matters or cases provides transparency into financial performance. For in-house legal teams, understanding cost per matter helps evaluate the allocation of resources, identify areas for budget optimisation, and justify expenditures while ensuring value-driven decision-making.

Time to resolution (cycle time)

Cycle times reveal how quickly legal tasks such as contract reviews, dispute resolutions and regulatory matters are completed. Shorter cycle times for in-house teams translate to operational agility, reduced legal costs and improved responsiveness to requests.

Client satisfaction (NPS)

Measuring client satisfaction using Net Promoter Scores (NPS) gauges the legal team’s effectiveness in meeting business and operational demands. Positive feedback indicates strong collaboration, alignment with organisational objectives and the ability to support departments efficiently, reinforcing the legal function as a trusted partner.

Regulatory compliance rate

Legal teams by nature, are required to comply with laws, regulations and policies. High compliance rates are essential in mitigating risks and maintaining reputational standing, especially in regulated industries where oversight is critical and penalties are harsh.

Volume and type of work

Tracking the number and categories of legal matters handled provides insights into workload distribution and team focus. For in-house legal teams, this data supports resource planning and helps prioritise high-value work, ensuring alignment with the company’s strategic goals while highlighting areas for optimising processes. 

How Plexus enables Legal teams to meet KPIs

Plexus is a powerful platform providing the tools and insights necessary for legal teams to pursue their North Star. The main benefits of using Plexus are:

• Streamlined workflow management: Plexus Contract Management and Matter Management reduces cycle times of routine legal work and frees teams up to prioritise and handle high-value work more efficiently. Automated workflows and document generation also accelerate this.

• Data-driven insights: In-platform analytics track workload volumes, helping teams optimise budgets and align resources with strategic and operational priorities.

• AI innovation: Plexus AI-powered features such as Contract Summaries and Contract Review further boost efficiency, demonstrating measurable ROI of legal work.

• Enhanced satisfaction: Plexus improves collaboration with internal and external stakeholders, driving higher user engagement and satisfaction.

By integrating KPIs and agile practices through using Plexus, legal teams can align with business objectives, quantify their value and solidify their role as indispensable strategic partner.