External legal spend tracker

Outside counsel costs might raise an eyebrow if the business hasn’t worked much with lawyers before.

Keeping track of external spend gives the business visibility on, and a better understanding of, legal projects.

We’ve sourced a template to help you get started - access it here.

For more information on legal spend trackers, what they are and how they help the wider business, keep on reading.

What is an external legal spend tracker?

An external legal spend tracker is a repository where legal teams can document and track their outgoing costs - that is, anything that isn’t completed in-house, and outsourced to agencies or law firms.

Why is an external legal spend tracker important?

This spend tracker will help legal visualise their costs over time, and track performance against legal department KPIs. They can also answer key questions from leadership teams, such as:

What is our forecasted spend for legal over X months?
Where is most of our legal spend going? Who are we spending the most money on?
Are we still within our budget?

It’s also a great way to demonstrate legal’s value and disprove the common misconception around legal being a cost centre.

What should a spend tracker look like?

A spend tracker should contain key information around payment identification (such as an invoice number), date of purchase, fees, and the service provided in return. Other information that may also be helpful to include:

A description of the project this expenditure supports
Territory
The company objective this supports (if applicable)

Our template spend tracker also contains an extra field, which determines whether this work can be moved in-house. Rebecca McKenzie, Head of Legal at Codat and the brains behind this spend tracker template, explains the value of this field perfectly:

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?

Read more about Rebecca tracks external legal spend at Codat in this blog.

Want to use Rebecca’s external legal spend tracker for yourself? Access our external legal spend tracker here.