12 Sales Metrics That Define Successful Legal Work | AXDRAFT (an Onit company)

Legal and business departments no longer need to work in silos. Legal teams always have one goal in mind: the execution of a contract. The same is true for sales teams. Both tend towards this goal and their cooperation contributes to the smooth running of the whole company.

Since sales and legal are interdependent, measuring sales KPIs can add value to legal teams. And vice versa, specific legal measures can highlight bottlenecks and improve sales workflows.

In this article, we present to you the most important KPIs, both legal and commercial. Read on to understand how these metrics drive departmental success.

Typical legal actions that impact the sales cycle

The contracts govern nearly 60-80% commercial transactions. As such, they are essential for the efficient execution of most business activities, especially sales.

Conversely, forensic metrics are essential for sales teams. Using legal KPIs is effective in avoiding misdirection, speeding up the sales process, and increasing business revenue.

See if your legal team is using these metrics to track and improve their performance:

Contract quantity

Contract quality

Internal vs external agreements

Contract review timeframe

Average closing time

Number of version updates

Number of redline updates

Annual contract value

Economic value generated by the legal department

For a more complete list of legal metrics, download our Legal Department Measures cheat sheet. You can use it to determine if your benchmarks are on track.

Sales indicators that help you succeed in your legal procedures

The legal department must be able to speak a business language similar to that of the sales team to ensure its contribution to the value of the company.

Which sales KPIs should you measure to impact your legal processes? We’ve compiled the top 12 sales KPIs you can use to increase deal quantity and quality. Follow them to ensure your business succeeds in its legal endeavors.

Sales Cycle Length

Sales cycle length is the average number of days or months it takes to close a deal.

This KPI is useful for making sales forecasts. Plus, you can use it to measure the effectiveness of a legal team. A long sales cycle can indicate poor contract management, decreasing their average annual revenue by 9%.

Achievement of quotas

Sales quota achievement calculates the share of the total sales target that a sales team achieves for a given time period.

Along with a sales quota achievement metric, you can also assess the legal department. Specifically, you can track whether their contract templates help or hinder sellers from closing deals.

Success rate

The sales win rate shows the percentage of closed deals based on the total number of sales presented.

This KPI may depend on the duration of the negotiation and the total life cycle of each contract. For legal teams, a low success rate can indicate poorly designed contract templates and ineffective change management tools. Contract Lifecycle Management (CLM) Software eliminates tedious contract processes and potentially increases the success rate.

Slip rate

The deal slip rate is the percentage of committed deals that do not close on time.

There are many reasons for a high dropout rate, including persistence and ineffectiveness negotiationunrealistic contract dates and compliance with contracts problems. If the legal department knows when a sale fails, they can reevaluate their processes and turn the situation around in their favor.

Number of contracts lost to competition

This KPI captures the number of transactions your teams have lost over a given period.

One of the causes of a large number of lost transactions is poor contract management. This includes lack of contract version control and missed contract deadlines, revisions and terminations.

If you’re losing business, it’s time to consider an all-in-one centralized system. CLM software facilitates the legal task and commercial teams to dynamically update contract versions and know the status of all current and pending contracts.

Average profit margin

It is the average profit generated by the sale of a particular product or service during a given period.

Profit margins generally vary across different products. If you know which products to focus on, you can optimize your sales and contract lifecycle management for each product/service.

For example, after analyzing the profit margin on products or services, the legal team may find it inappropriate to spend a lot of time on low-margin projects. In the future, they can refuse to work with very complex and low-profit products and services and devote their time to something more profitable.

Total income

Total revenue calculates the money a business earns from selling a product or service.

Total revenue is essential for evaluating the effectiveness of legal and sales teams. If this metric seems insufficient, business owners can assess their teams’ strengths and rethink their teams’ workloads.

Percentage of revenue from existing customers

This metric is more than the name suggests – it also shows your customer retention rate. The percentage shows how effective the sales and legal teams are at retaining customers.

In fact, the probability of selling to existing customers is 60-70%, while the probability of selling to new customers is around 5-20%. For this reason, legal teams should pay close attention to the results of the retention strategy. They must review essential contract deliverables and milestones, revise pre-defined contract templates based on these findings, perform timely contract reviews, and maintain control of contract compliance.

Customer acquisition cost

Customer acquisition cost (CAC) is the average amount a company spends to acquire a new customer. To calculate the CAC, divide the total amount spent on personnel, legal involvement, advertising, etc., by the number of customers acquired.

This metric can help you determine if investments in your teams are paying off. Typically, manual processes increase the number of hours legal and business departments spend on their work. This increases the CAC.

If your CAC is high and your teams aren’t delivering the expected results, it’s time to take corrective action. You need to assess the work of your teams, the degree of automation, identify performance bottlenecks and optimize processes to reduce CAC while increasing conversion rates.

Percentage of time spent on manual data entry

If this KPI is high, you risk extending the life of your contract. At best, this leads to an increase in the deal slip rate; in the worst case, it leads to a higher number of lost transactions.

In a rapidly changing business environment, document automation is already a matter of survival for sales teams. Yet some business departments spend a lot of time managing data manually.

By automating your business and legal activities with a CLM platform, you will get:

· Centralized cloud storage

Contract templates and drafts

· VScollaboration tools

Notifications and Reminders

Analysis and reports

Worth checking out, isn’t it?

Percentage of time spent creating a contract

As noted above, manual contract management extends all stages of the lifecycle, including drafting and review. The duration of the creation of the contract therefore depends on the degree of automation of the company.

Relying on Excel, or even worse, paper-based systems, could cost you a lot of time and money. Fortunately, a proper CLM system can make your contract execution fast and virtually error-free.

For example, companies that have already implemented AXDRAFT CLM software show the following results:

80% faster workflows

Five minutes average document writing time

17% increase in turnover

Plus, teams can really enjoy their work with simplified contract management.

Year-over-year growth

Year-over-year (YOY) growth compares KPIs in one period with the same period in the previous year.

You can apply this metric to any business area you can measure. For example, you can measure the effectiveness of your sales and legal teams and related KPIs, such as contract quantity and quality, average time to close, customer acquisition cost, and average profit margin.

Year-over-year growth helps you determine whether certain aspects of your business are improving or slowing your growth. Then you can take appropriate action and strengthen your business operations.


The sales and legal teams share one goal: to close the deal. Smooth cooperation between these departments brings positive business results.

Measuring sales metrics such as quota attainment, sales win rate, and sales rejection rate can improve your sales team’s activities and reveal bottlenecks in sales lifecycle management. your contracts. To consolidate these gains, consider automating the management of your contracts.

Sales and the legal department often have a fragile relationship, but it doesn’t have to be that way. The right contract management software will level out the bumps and add flexibility.

Maria D. Ervin