Join us on 24 May for a live webinar exploring how Gopuff automates onboarding paperwork with Juro
Sign up here
Back to Blog

How to track external legal spend

This chapter is from The Bundle: issue #4 - a quarterly, community-led publication that covers the latest need-to-knows by and for scaleup lawyers. Download The Bundle: issue #4 here for insights from Curve, Heineken, Beamery and more.

It’s super important for legal to keep track of external spend, and I use Google Sheets to track this at Codat.

This spreadsheet offers visibility on legal projects, legal spend, and more. It lives on our shared company drive, so it’s accessible to the wider business.

It’s a straightforward setup; we have three entities - in the UK, US, and Australia - that I track in the spreadsheet. Tracking legal spend on projects is hugely valuable, and it isn’t necessarily limited to legal projects either.

For example, if the people ops team are managing employee issues that require external advice, but I’m not directly involved in those regular calls and updates with external counsel, I can keep track of the spend via the spreadsheet.

It’s a great way to get visibility on projects in the wider business.

“As sole counsel, I can’t do everything, and being able to justify the costs to the COO is really useful”

The big question: can this be done in-house? 🤔

There’s a column in my tracker that I find super valuable, and it asks whether a task can be done in-house.

This column helps me track the efficiencies in legal - unless you have a substantial legal team, you likely lean on external counsel for assistance with big projects, like fundraising or expanding into new territories.

Tracking this spend helps me better understand my own workload; if there’s anything on there that could be completed in-house, why is it necessary to delegate it to external resources?

Continued instruction to external counsel when the work could have been completed in-house will be a key indicator of capacity issues. This metric can also be a great data point when arguing for further headcount.

Legal costs can seem expensive for the business, especially if they’re not used to working with lawyers. ‘Can this be done in-house?’ is such an important column to track for this reason - as sole counsel, I can’t do everything, and being able to justify the costs to the COO is really useful.

My external spend tracker looks like this:

codat-spend-tracker

Understanding your expenditure 💰

The first thing I would say to any in-house teams trying to create a system for tracking legal spend is to understand the extent of the expenditure. Before I joined as the first legal hire, individual teams were instructing different law firms on different matters.

“The purpose of the tracker is not to reduce external legal expenditure down to zero, but as a data point for measuring the legal team’s capacity”

Now all instruction must come through me, even if the spend isn’t going to come from the legal budget. This is the first step to understanding what you are actually spending - and whether it’s a necessary spend.

The other recommendation is to create a high level legal “roadmap” for the year, setting out key projects or regulatory milestones. This will help to be able to manage your legal budget.

For example, for businesses with a financial year-end of the 31st December, Q4 is likely to be crunch time for sales contracts. Do you need to budget for external legal assistance in this quarter to deal with the volume?

You can also ask your external counsel to submit estimated figures or running totals to you prior to billing to help you keep more accurate week-to-week records.

The purpose of the tracker is not to reduce external legal expenditure down to zero, but to manage the businesses expectations and as a data point for measuring the legal team’s capacity from quarter to quarter.

By having this transparency, and creating an understanding on spend, legal will be better suited to support the business as it continues to scale.

Want to hear more? Join our community of 500 lawyers and legal operations experts to get the latest insights, attend exclusive events, and network with some of the brightest minds in legal.

Instantly book a 30-minute demo

  • Schedule a live, personalized demo with a Juro specialist

  • See in-depth analysis of your contract process - and tailored solutions

  • Find out what all-in-one contract automation can do for your business

4.8
4.8

Schedule a demo

To learn more about the use of your personal data, please consult our readable Privacy Policy.

More from the Blog

How to build a legal tech roadmap

What can legal operations teams do to make legal work more manageable? Sean Houston, Legal Operations Manager at Heineken, talks us through his process of creating a legal tech roadmap to align the global legal team.

Read Story

‘Blitzscaling’ at Babylon 

Babylon is one of the world's fastest-growing digital health platforms, listing on the NYSE in 2021. How has the business - and its legal team - changed over the years? We asked Jing Wei Luo, Babylon’s second legal hire.

Read Story

Using contracts to get to Net Zero

Lawyers don't need to wait for the law to change to take climate action - instead, they can use contracts. How can The Chancery Lane project help lawyers and their businesses with their Net Zero goals?

Read Story

Your privacy at a glance

Hello. We are Juro Online Limited (known by humans as Juro). Here's a summary of how we protect your data and respect your privacy.

Read the full policy
(no legalese, we promise)