Role of KPIs in ROIs
Legal18 March, 2021

The role of key performance indicators in calculating ROI

If you want to calculate the ROI of legal technology, you need to know how you’re going to measure it. Tracking key performance indicators (KPIs) will allow you to see if you’re on target. It’s a good idea to gather this information before you invest in legal technology, so you can compare the situation before and after. This will help you and your internal stakeholders understand any kind of productivity and efficiency gains, and how the legal technology translates into cost savings.

It's also worth noting that some things are difficult to quantify. For example, how can you assign a value to providing strategic advice? How do you put a value on time spent searching for documents? Using the example of searching for documents, you can track how much time it takes you to find a document and how much time you would save if you could carry out the same task with in a few minutes using legal technology

Below are some examples of KPIs you can track to help measure ROI

  • Contract management:
    • Number of contracts and their value over a certain period of time
    • Time spent on each stage of the contract lifecycle including creation, review, and execution
    • Number of missed deadlines and associated costs
  • Compliance:
    • Number of compliance matters resolved vs. number of open compliance matters
    • Average time taken to close a compliance matter
  • Claims and litigation:
    • Percentage of cases that have been resolved
    • Breakdown of disputes by type
    • Changes in provisions
  • Productivity and efficiency:
    • Time spent on administrative tasks (like emailing, filing and searching for documents) vs. legal matters
    • The amount of time saved as a result of empowering colleagues to self-serve
    • Number of matters handled per legal department employee
While identifying which KPIs you want to measure is tricky, devising how you will measure them is even trickier. In order to provide stakeholders with reliable data on how your legal technology will achieve ROI, you need to make sure KPIs are measured consistently. Likewise, evaluating the data helps to determine if there are inefficiencies so you can take action.
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