Legal Spend vs. Budget
Total legal costs as a percentage of the approved legal budget
What is Legal Spend vs. Budget?
Legal spend versus budget compares actual legal spending, including outside counsel, with the amount budgeted. It shows whether legal costs are under control.
Legal costs can be unpredictable because of disputes and transactions, so close tracking helps avoid surprises.
How this KPI is measured
- Function
- Legal, Risk & Compliance
- Sub-function
- Litigation & Disputes
- Industry
- All Industries
- Type
- Lagging
- Impact
- Financial control
- Unit
- %
- Measurement frequency
- Monthly / Quarterly
- Formula
- (Actual legal spend / Budgeted legal spend) × 100
How to calculate it
Divide actual legal spend by budgeted legal spend, and multiply by 100.
For example, if actual legal spend was 1,150,000 against a budget of 1,000,000, the result is 115%.
Split by matter type and by internal versus external cost, and ask external firms for estimates and regular updates on fees.
Where it is used
Controlling legal cost
Spot overruns early.
Managing outside counsel
Hold firms to estimates.
Forecasting
Plan for known matters.
How to improve it
Tips and common mistakes
- Disputes are hard to forecast. Keep contingency.
- Track by matter.
- Balance cost control against protecting the business.
More Legal, Risk & Compliance kpi library
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