Key Metrics for a Litigation Management Program

Baselining your Litigation Metrics to Build a Strong LM Program

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See if you can answer this question: how much money are you spending on litigation and what are you getting for that money? Seems like a straightforward question. But often organizations struggle to answer it.

In this post, I provide a quick summary of some key metrics you can use to track and measure litigation performance for the purpose of establishing a baseline and evaluating variation in your data to determine if changes should be made to your LM approach.

These metrics consider outside counsel litigation spend. In house (and staff counsel for carriers) should have metrics, too, but this is outside the scope of this post. Also, getting data and cleaning it are important, though separate considerations.

Combined Legal Spend

Here, we are considering the all-in, rolled-up number for all litigated matters (recommend fee / expense as a side-by-side on a bar or line chart) – obviously, this is an easy way to see if spend is increasing or decreasing. You may need to work with your finance team to identify "outside" litigation spend. With this, you can then interrogate this information to understand cost drivers.

A basic line chart generated in Excel (can used a bar chart or other visualization as well).

A separate consideration here is breaking down spend by relevant segments (e.g., insurance lines of business, product line, division, etc.). This information alone might highlight a risk issue. Maybe a product line or operating location is generating more litigation?

Additionally, a chart like this enables a budget overlay. Did you exceed budget for the year? Were you below? Why? This information may help develop better budgeting assumptions.

Total Ligated Claims (new / pending / closed)

The value of this data is obvious. We are answering how much litigation do we have (albeit severity is not addressed in this chart).

Using total closed cases, you can gain insight into statistical data around your litigated matters, such average and median spend. One item that might be important to some business is developing a closure rate - a rate above 100 means more matters are closing than opening. A rate below 100 might indicate increasing litigation risk for your organization.

A simplified litigation inventory chart (while severity of matters is not apparently from this view, overall inventory appears stable, and counsel appears to be a good job of disposing of new litigation, notably so in 2026).

Stats on Litigation Costs / Settlement Values:

• Average (legal spend / settlement). Average legal spend, in my experience, has limited value or can falsely represent spend/settlements. Think about it, if you are large carrier and you have a handful of cases that are far beyond what you usually see. What does that tell you about your legal spend.? Let’s say you have two matters in which you spend a total of $5M, but most cases cost / settle between $100-$250K. What will the large cases do to your average? Filtering or bucketing cases by spend/settlement value can be helpful to offset skewing.
  

• Median (legal spend / settlement). Median legal spend / settlement amount is generally more useful, as it identifies the “middle” value and more closely suggests where most spend is landing.
  

• Benefits of Tracking File Spend / Settlements. Regardless of which you use, both can be helpful in tracking whether spend / settlements how these numbers are changing over time. Generally, unless your propensity for litigation changes, costs will generally increase incrementally due to inflation. Understanding what meaningful variation looks like in your organization will be critical.
  

• MIN/MAX (spend / settlement). For most organizations, MIN (minimum) will be matters closed for zero dollars or a nominal sum. Understanding your MINs and their frequency is surprisingly good information for identifying firms that drive early / low-dollar settlements. Conversely, MAXs can highlight adverse spend or litigation outcomes. As with every other measure, don't overly rely on this metric. You may have one firm you give all the hard stuff and their settlements may cost you more money, but that might be in line with your expectation. As I mention in more detail below, having a dedicated role / team to look at this, will help your organization make sense of this data.

Visualizing (spend / settlement). One good way to visualize all of this type of data is with a box and whisker chart. It will show the distribution of data points and is a good way to better-understand outliers. Often, there may be one or two "bad" outcomes that organizations dwell on, but should you? Does it reflect a LM operation off the rails? Is this a one off or are we seeing more adverse development in our matters? Presenting data this way provides more context.

A basic box plot generated in Excel.

Rates

There are many ways to cut rates, but here are two common ones I’ve used:

• Ave/Median Rates by Timekeeper – this one is obvious. Here you are looking at what you are paying partners, associates and other timekeepers (using whatever statistical approach makes sense, average, median, etc.). Having this data enables you to understand the rate market, which is also useful in setting rates when firms are looking for an increase.
  

• Effective Rates. Effective rate is calculated as combined fees charged, divided by hours billed to achieve that billed amount. This metrics is helpful in quickly determining timekeeper utilization. If the effective rate is lower, it often means lower-level timekeepers are doing the work, and the converse generally means senior timekeepers are doing more of the work. Without analysis or historical data, this information alone is not helpful. However, over time, you may see one firm getting good results with a lower effective rate, which may indicate a more efficient use of associates and paralegals. Certain areas of expertise may use more senior timekeepers. Regardless, this measure is a good way to track how your counsel works.

• Visualizing. Visualizing rate distribution is helpful and there are several approaches. It is much easier to see patterns. For example, using a map, a scatter plot, a bar chart, etc. are all ways to help you understand where rates are high, low or trending higher than most. Using maps in Excel or PowerBI (or your billing software, if offered) is a good way to see your rates.

Cycle Times. For most organizations, cycle times can be viewed in several ways. The two most common are:

• Litigation start to resolution, and

• Litigation start to last firm invoice (which may be months or years after settlement)

The benefits of tracking cycle time is obvious - you are seeking to understand how long it takes to close out matters. Does Firm A take longer than Firm B? The main takeaway here is landing on a consistent approach. Changes in how your cycle time is measured can falsely show improving / degrading metrics.

As you become more sophisticated in tracking this data, you can establish more detailed time metrics.

Ultimate Outcome / Resolution. This is a tough metric. Often, there is a qualitative aspect to “outcomes”. And this measure will vary by organization. Essentially, though, you want to identify how cases were “resolved.” For example, how many went to trial, motion practice, mediation, etc. Coupling the above with cycle times can supercharge your insights.

Another example is tracking whether cases were resolved above / below counsel’s evaluation can be helpful, too. In other words, counsel said this matter is worth "X" and settled for "Y". How close are the numbers over time? Obviously, this alone should not be the sole factor for evaluating a firm, but you are presumably hiring for expertise.

Firm QA. In short, this relates to reviewing counsel’s work. As with "resolution," this can be qualitative to a degree. However, much of QA can generally be reduced to number. Here are some examples:

• Timeliness (communication, reporting, etc.)

• Adherence to your guidance (e.g., perhaps you have staffing / DIEB expectations, a certain evaluation form / process to follow)

• Quality ("cut and paste" work or "substantive" evaluation)

• Vendor usage

Deviation Rates. There is some overlap with QA, but as used here, this number relates solely to billing compliance. In short, how much do counsel's bills get adjusted (as a percentage). Higher adjustments typically indicate a firm that is struggling to compliance with your billing guidance (but it can be process issue, too, which I will address in another post!).

Firms should be paid for the reasonably billed work they do. However, in the US, billing that complies with organizational guidelines remains an issue. Generally, firms try to bill compliantly. But an issue that often gets overlooked is most firms have literally dozens of litigation management guidelines with which they must comply. Regardless, compliance can be a way of tracking how well a firm seeks to align with your organization’s needs (many have systems to automate this process).

Final Thoughts

I could certainly provide more measures, but for most organizations, this should get you started. Other ways to measure your legal spend will become obvious as you start working through this process. Some other things that I would consider, even as you get started, includes:

• Consider creating dedicated LM / Analytical Roles - if you have a lot of litigation that is handled by outside counsel, it may be useful to establish roles. A seasoned LM person will bring a lot of knowledge to help expedite this process and keep you out of rabbit holes. An analyst, particularly one that knows your organizations data and how it is captured and reported will help give you more confidence in the insights generated. They should also be able to create good visualizations, whcih is harder than you might think.

• Setting budget and articulating severity at the matter level - this value of will become obvious to you as you work on this process, but having this information will be useful as you see trends in your data or if you want to establish more accurate overall budgets for litigation.

• Leverage Your eBilling Software. Most ebilling software offers robust reporting and can give you insights of phases of litigation and litigation behaviors. An LM team can help unlock these insights.

• Consider Leveraging PowerBI - If your litigation spend is not "big," (a relative statement!) Excel and PowerPoint are fine for creating reports. However, having used PowerBI for a number of years, I strongly urge organizations to leverage it. For those skilled in Excel, PowerBI is easy to learn. For me, one main benefit is the data is not "static". If there is a view you want, you can quickly apply filters to quickly cut and interrogate data, saving hours of time revisioning data.

Keep in mind that this is only a preliminary list of helpful measures. Once you have these data points, the next step will be to ensure that you are reviewing them regularly to understand the baseline and look for variation. Finding variation might mean you need to revisit your litigation strategies, panel make-up.