As I waited on a recent Zoom call for “[insert name here] to hop on” and checked to see if they actually accepted the calendar invite (does this strike a chord?!), I was chatting with a colleague about our respective teams and projects. While I could point to having a great rapport with my team and success with bigger projects, I wasn’t able to show specific metrics about our day-to-day jobs handling contracts. So, I considered this a wake-up call and now I want to impart my learnings to you.
In-house attorneys don’t have sales quotas. Nor do we have big product releases or click-through rates from a marketing campaign. But we still have to show executives (and, let’s be honest, more than a few are skeptical of Legal) that we are worth keeping around. Or, even better, that we are value creators. So how do we do that?
Keep track of your success metrics regularly so that you have some data points you share at the ready. Our jobs may depend on it.
In this article, I will show you how to manually track success metrics when working with contracts. There’s even a free tracker template you use at the end of this article!
Types of Success Metrics
There are two overarching categories of metrics: (1) competency metrics and (2) value-add metrics.
Competency metrics show that you can do your job. They are numbers like the amount of contracts reviewed, total time of review, time it took to turn a redline, etc.
Value-add metrics show that not only can you do your job, but you also helped make the business better. These are harder to define: they involve tracking what you negotiated out/into the contract, supporting important concepts that your business cares about, or leaving a good impression with the counterparty.
With either metric, you want to show your value. You want to show that outside counsel can’t do your job as well as you can because you are entrenched in the business and thus able to turn contracts faster (i.e. closing deals faster) and involve stakeholders more closely.
Competency Metrics
While there are many ways to show that you can do your job, here are a few key metrics to track. These metrics can become more complex according to the size and complexity of your legal department, but these are a few simple ones.
- Status: By tracking the current status of a contract, you can quickly answer questions for yourself and from leadership about where a contract currently sits. Does it sit with the counterparty or an internal stakeholder? If you can’t quickly answer this question, it will reflect poorly on you.
- Number of Contracts Reviewed, Type, and $ Amount: By tracking the number of contracts reviewed, the type of contract, and the dollar amount, you can show that your colleagues use your services often. And once you have a sizable set of data, you can show trends and that your time is not best used on lower dollar amount vendor contracts.
- Total Time of Review and Time in Your Hands: By tracking the total time of review and time in your hands, you can show that you are efficient and prioritize getting deals done quickly (of course, without sacrificing protecting the business). Both metrics go hand in hand: we all know that the total time of review may be considerable since your counterparty can drag their feet, so make sure you show that at least you are doing your part.
- Important Clauses Added, Edited, or Removed: By tracking important clauses that you added, edited, or removed from a contract, you can show that your efforts protect the business and that it is worthwhile for your colleagues to have you review contracts, since otherwise the business would have been saddled with a less than ideal contractual obligation. For example, you can track this by stating that you limited an onerous indemnification clause, added in a clause to limit price hikes upon renewal, or removed auto-renewal. Think of this as a journal of your contact review highlights: the possibilities are limitless, but the guiding principle here is to note those clauses that your business cares about. (How do you know what your business cares about? Meet with these people to have those discussions.).
- Obligations Tracked: By tracking the contract obligations and deadlines in a contract, you can show your business colleagues that without your review, these obligations or deadlines may have been violated or missed. Think things like auto-renewal dates, delivery milestones, etc.
Value Add Metrics
While there are many ways to show that you make the business better, here are a few key value-add metrics to track.
- Stakeholder Engagement: By tracking who you involved in the contract review process, you can show that you are working cross-functionally to achieve desired business outcomes. For instance, you can show that you involved an account executive and sales engineer on a sales order form to better accommodate customer asks, or that you involved your IT and privacy team on a vendor contract to better protect your data. You want to show here that since you are engaging internal stakeholders, you are materially improving your contracts, and therefore the business.
- Brand Representation. By tracking how well the contract negotiation went, you can show that you are an excellent brand ambassador for your business. As someone who handles and negotiates contracts, you are often one of the last individuals that your counterparty will deal with before officially doing business together. If you are pleasant and efficient, that indicates to your counterparty that this is what they and their colleagues can look forward to as customers/vendors. You could use a scale of 1-10 to measure how well the negotiation went with a space for notes.
How to Track These Metrics: Template Alert!
After deciding on what metrics to track, make sure there are systems in place to indeed track them.
If you do not have contract lifecycle management (CLM) software or other legal tech, and cannot afford them, a simple Excel spreadsheet or Google sheet will do. While there are many templates out there ranging in complexity, check out this simple template I made to get you started. I recommend keeping this updated on a very regular basis so you don’t have to update it with large amounts of data all at once.
These metrics are helpful only to the extent that you communicate them to your colleagues and help them understand the metrics in the context of industry standards. In our next edition of New to Contracts, I will cover how to benchmark your metrics to continually improve and communicate those metrics to help your business colleagues understand just how successful you are. See you next month on the New to Contracts column, exclusively for Contract Nerds!
