Contract Management Key Performance Indicators (KPIs) Legal Ops Teams Should Be Tracking

Legal Ops leaders strive to make certain that legal department operations run smoothly and efficiently. One of the ways to achieve this is with effective contract management. However, determining the effectiveness of the contracting processes requires using key performance indicators (KPIs). By identifying and tracking the right KPIs, organizations can assess their contract management system’s efficiency and pinpoint areas for improvement, according to an article by Pramata.

The KPIs selected should align with the goals and needs of the business and provide insights into the contract management lifecycle. Here are seven essential contract management KPIs that every Legal Ops team should track:

1. Length of contract cycle: Measures the time taken to complete the entire lifecycle of a contract and aids in identifying bottlenecks and inefficiencies.
2. Contract value: Evaluates the financial impact of legal contracts by measuring the total value of contracts signed within a specific timeframe.
3. Contract acceptance rate: Identifies patterns and gauges the percentage of contracts that were accepted without modifications or rejections.
4. Missed milestones: Measures the number of milestones missed within the expected timeframe and indicates potential risks and inefficiencies requiring corrective action.
5. Number of contract requests: Assesses resource allocation by tracking the number of contract requests received in a given period.
6. Contract risk levels: Measures the level of potential risks associated with legal contracts, helping teams identify areas of vulnerability and implement risk management strategies.
7. Percentage of contract renewals: Measures the percentage of contracts successfully renewed within a specific timeframe, minimizing revenue loss. 

The selection of relevant KPIs should align with the organization’s specific goals and needs, ensuring that efforts invested in contract management directly support broader business objectives.