Legal Department Expense per Employee

Legal Department Expense per Employee

KPI Details

Legal Department Expense per Employee measures the total expense incurred by the Legal Department in relation to the number of employees working for the company over the same period of time. A relatively low value for this metric is typically related to a few common factors, including highly manual (i.e., error and rework prone) Legal Department processes and procedures (e.g., poor use of document management systems, etc.), excessive time spent on low-value work (e.g., printing, scanning, etc.), overstaffing, general inefficiencies within Legal Department processes (e.g., inefficient distribution of corporate governance policies to employees, poor management of company intellectual property, etc.), and sub-par Legal Department employee training and performance. While companies typically seek to streamline operations and employee positions to reduce expenses in the Legal Department, great care should be taken when doing so as too many layoffs may make it that much more difficult for the company to successfully mitigate any legal issues that may pop up.

KPI Definition

The total expense incurred by the Legal Department divided by the number of employees working for the company over the same period of time.

KPI Calculation Instructions Legal Department Expense per Employee?

Two values are used to calculate this KPI: (1) the total expense incurred by the Legal Department, and (2) the number of employees working for the company over the same period of time. Include labor (wages, salaries, commissions, benefits), overhead (occupancy, utilities, supplies, advertising, legal fees, travel costs, etc.), and technology (hardware, software, end-user operations, etc.) costs incurred by all of the Legal Group’s sub-functions (e.g., Corporate Governance, Government Affairs, Intellectual Property, Legal Administrative Support, Litigation Management, Mergers & Acquisitions) in the numerator. Include only part-time and full-time employees in the denominator. Do not include temporary or contract employees in the denominator.

KPI Formula :

Total Legal Department Expense Incurred / Number of Company-Wide Employees