KPI Benchmarks : Law Firms Employed Per Million of Outside Counsel Spend
- Benchmark Range 6 - 46
- Benchmark Average 21
- Benchmark Sample Size (n) 9
* Is High or Low Best: Objective
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KPI Details : Law Firms Employed Per Million of Outside Counsel Spend
Number of Outside Law Firms Employed Per Million Dollars of Outside Counsel Spending measures the total number of outside (external) law firms employed by the company in relation to each one million dollars of outside counsel spending (fees paid to outside law firms) incurred over the same period of time. Excessively high values for this metric can be indicative of inefficient cost benefit analysis, overstaffing (i.e., hiring an unnecessary number of outside law firms), poor vetting of outside law firm vendors (this can cause constant vendor turnover), general inefficiencies within the practices of the outside law firm (e.g., poor management of legal documentation, lack of prompt responsiveness to legal issues, too much time spent on low-value work, etc.), and sub-par outside law firm employee training and performance. Excessively low values, on the other hand, can indicate overspending on firms that may not have the experience necessary to cover all of the company's legal needs. Look to perform periodic cost benefit analysis to determine if an outside law firm is even needed, improve outside firm vetting processes (i.e., make sure that the outside firm can cover the legal needs of the company), conduct periodic performance audits and determine if current outside law firms offer discounts for the services they provide to balance costs and improve outside law firm vendor performance.
KPI Best Practices : Law Firms Employed Per Million of Outside Counsel Spend
KPI Calculation Instructions Law Firms Employed Per Million of Outside Counsel Spend?
Two values are used to calculate this KPI: (1) the total number of outside external) law firms employed by the company, and (2) each one million dollars of outside counsel spending incurred over the same period of time. Only include fees paid to outside law firms in the denominator. Fees can include labor (wages based on the law firm’s hourly rates), travel, and technology (hardware, software, end-user operations, etc.) costs. Legal fees form part of the company’s overhead.
KPI Formula :
Total Number of Outside Law Firms Employed / Each Million Dollars of Outside Counsel Spent