Ten Things: Ten KPIs All In-House Legal Departments Should Track

Tracking performance is not always easy for in-house legal departments, but it’s essential to understand how your team is adding value to the company. While KPIs (Key Performance Indicators) are common in other business areas, legal departments often struggle to define meaningful metrics.

Without the right measures, it’s hard to show the impact of your work or spot areas that need improvement. Fortunately, with careful planning and the right approach, KPIs can provide clarity, guide decision-making, and highlight achievements.

In this article, we will explore ten KPIs that every in-house legal department should track. These metrics will help you manage your team, demonstrate value to leadership, and improve overall efficiency.

Table of Contents

KPI or KPIs

I’ve been struggling to write this post about KPIs for legal departments, it took longer than I expected, with lots of starts and stops. First, should it be KPI or KPIs? Like the debate over RBI vs. RBIs in baseball, people have strong opinions. I prefer KPIs, so that’s what I’ll use.

More importantly, KPIs don’t always work well for in-house legal teams. I remember when I was first asked as General Counsel to set SMART goals for the year. Honestly, I had no idea what HR was talking about.

Even when I asked for examples, they weren’t clear either. For most parts of the business, SMART objectives work fine, but for legal, it’s tricky. Eventually, my team and I created “SMART-ish” goals that worked for us.

Then came KPIs. These are metrics you track to see if you’re meeting goals. Unlike HR, the request now came from the CFO and CEO, so fudging it wasn’t an option. We had to come up with KPIs that actually mattered. Even after we did, it wasn’t easy.

KPIs rarely capture the full picture. They don’t show how legal teams prioritize urgent work, manage complex cases, or prevent risks and costs. Many of the most valuable things legal teams do are intangibles, and KPIs struggle to capture those.

Still, I realized KPIs have value. They help show the C-Suite that the legal department is running efficiently. They can also highlight areas that need attention and show the impact of the legal team. So yes, KPIs are here to stay.

Contract Quantity

Tracking contract quantity is one of the simplest and most important KPIs for an in-house legal department. Essentially, it measures how many contracts your team completes over a given period. You can track the total number of contracts, but it’s often more useful to compare it against a goal set at the start of the year—for example, completing 500 contracts per quarter.

This KPI matters because contracts are the engine of business operations, helping deals move forward smoothly. By tracking quantity, you show how your legal team supports the company’s business growth.

To get more detailed, break down contracts by type: NDAs, commercial contracts, vendor agreements, simple contracts, or complex contracts. You can also categorize them by value or strategic importance. Doing this helps identify workload distribution, spot bottlenecks, and ensure your team is focusing on the contracts that matter most to the business objectives.

Contract Quality

Measuring contract quality is just as important as tracking quantity. While quantity tells you how much work your legal team is completing, quality shows how well that work is done. A high-quality contract minimizes risk, protects the company, and meets internal standards.

One effective way to measure quality is through a contract scoring system. For example, you can set criteria for risk, compliance, clarity, and completeness, then score contracts from A (excellent) to D (poor). Low-scoring contracts can go on a special review track to improve performance.

You can also track metrics like use of company templates versus customer drafts, or the number of redlines and revisions needed to finalize a contract. The goal is to ensure your legal team delivers accurate, low-risk, and consistent contracts that support business objectives while reducing potential disputes or legal issues.

By monitoring contract quality, you highlight the value your legal department adds and create opportunities to improve processes over time.

Budget vs. Actual Spend

Tracking budget versus actual spend is a core KPI for any in-house legal department. It shows how your team is managing legal costs compared to the budget set at the start of the year. This helps the C-Suite understand whether the department is operating efficiently and staying on target financially.

You can measure this KPI in two ways: year-to-date (YTD), to see overall performance, and monthly, to catch trends early. It’s also useful to break down spending by type of matter, such as litigation, contracts, intellectual property, or corporate work.

Additionally, tracking outside counsel fees, average hourly rates, and any cost-saving initiatives can provide insight into areas where your legal department can improve efficiency or reduce unnecessary expenses.

By monitoring budget vs. actual spend, your legal team demonstrates financial discipline, supports better decision-making, and highlights its value to the business.

Legal Spend by Business Unit

Tracking legal spend by business unit is a crucial KPI for understanding where your legal resources are being used. Most companies already assign outside legal costs to specific units, but even if they don’t, it’s valuable to track this internally.

By monitoring spend by department or team, you can see which business units are using the most legal services and investigate why. For example, one unit may face more complex contracts, litigation, or regulatory work, which drives higher costs.

You can also break down spending by type of matter, such as litigation, intellectual property, compliance, or contracts, to get a clearer picture of cost drivers. Some organizations even track legal spend as a percentage of revenue to compare across the business, though this metric requires context because spend can vary by unit size and activities.

This KPI helps the legal department manage costs, identify inefficiencies, and support strategic decision-making, while showing the value and impact of legal services across the company.

IP Development

Tracking intellectual property (IP) development is a key KPI for in-house legal departments, especially in companies where patents, trademarks, and copyrights are important business assets. IP is often overlooked, but it can have huge value for the company—whether for growth, acquisitions, tax planning, or financing.

A simple way to measure this KPI is to track the number of IP applications filed or granted during a period. You can also monitor IP-related spend, including costs per patent, trademark, or copyright. Breaking this down by business unit helps you see which teams are driving IP activity and costs, such as marketing driving trademark filings.

Monitoring IP development ensures the legal department protects the company’s assets, supports innovation, and reduces risk. It also helps leadership understand where resources are being used and which areas may need additional focus.

Litigation Management

Managing litigation is one of the most critical roles of an in-house legal department, and tracking it with a KPI helps show the impact and efficiency of your team. While it’s hard to capture everything in a single metric, a combination of measures works best.

Start by tracking the number of litigation matters above a certain value, such as $50,000 or $100,000. You can also monitor high-risk cases separately, as these are often the most important to the C-Suite and board.
Other useful metrics include average cost per case, outside counsel fees, settlements or judgments, and the percentage of cases won or resolved before trial. If your company tracks regulatory investigations, you can include fines and resolutions here too.
By measuring these areas, your legal team can demonstrate control over litigation, reduce risks, and manage costs effectively, while highlighting the value the legal department brings to the business.

Compliance Management

Managing compliance is a key responsibility for in-house legal departments, especially when the compliance function is part of the legal team. Tracking compliance KPIs helps ensure the company follows laws, regulations, and internal policies, while also reducing legal risks.

Start by measuring the percentage of employees who complete mandatory compliance training, which ensures everyone understands the rules and their responsibilities.
Next, track the number of compliance matters reported, including those through hotlines, emails, or other departments like HR. You should also monitor the resolution rate, comparing open vs. closed compliance cases, and track the average time to close issues to see how efficiently your team handles problems.
Additionally, watch for recurring trends or high-risk areas to prevent future issues. Using these compliance KPIs, the legal department can demonstrate accountability, manage risk, and show value to leadership, all while maintaining a culture of ethics and compliance throughout the company.

Strategic Project(s)

Tracking strategic projects is an important KPI for in-house legal departments because it shows how the team contributes to big initiatives and long-term goals. These projects might include technology implementations, cost-saving initiatives, succession plans, or multi-year strategic plans.

To measure progress, set clear milestones and deadlines and track whether the project is on schedule or behind. You can also monitor budget adherence, resource allocation, and project risks. Regular updates help the legal team stay aligned with business priorities and allow leadership to intervene if the project is off track.

By monitoring strategic project KPIs, the legal department can demonstrate impact, accountability, and value beyond day-to-day legal work, showing leadership that the team contributes meaningfully to company growth and success.

Legal Department Engagement

Employee engagement is a crucial KPI for any in-house legal department. A highly engaged team is more productive, motivated, and willing to take on extra responsibilities, which directly impacts the department’s efficiency and overall value.

To measure engagement, use employee surveys that track satisfaction, morale, and willingness to contribute to discretionary work. Look at metrics like team participation in projects, feedback scores, and retention rates. Comparing scores year-over-year or against company-wide benchmarks can help identify areas needing improvement.

By tracking engagement KPIs, the legal department can spot potential issues early, improve team performance, and demonstrate strong leadership, showing the C-Suite that the team is both committed and high-performing.

Customer Satisfaction

Measuring customer satisfaction is one of the most important KPIs for an in-house legal department. It helps you understand how well the legal team is serving the business units and contributing to overall company success.

Use a legal department survey to track satisfaction across key areas, such as responsiveness, quality of advice, clarity, and problem-solving. You can also calculate an overall satisfaction score or ask business teams to assign a letter grade to the department. Comparing results year-over-year helps identify improvements or areas that need attention.

By tracking customer satisfaction KPIs, the legal department can demonstrate its value, build trust with business leaders, and align services with company goals, showing that the team is not only effective but also highly responsive to internal clients.

FAQs

What are KPIs for an in-house legal department?

KPIs are key performance indicators that measure how effectively a legal team is performing its duties, managing risks, and adding value to the business.

Why is tracking contract quantity important?

Tracking contract quantity helps the legal department measure productivity and ensure contracts are completed on time, supporting the company’s business operations.

How can legal departments measure compliance?

Legal teams can track training completion, reported compliance issues, resolution rates, and average time to close cases to monitor compliance effectively.