You’ve made the investment in legal tech—but is it paying off?
Many legal teams adopt new technology with high expectations, only to face slow adoption, unclear impact, and resistance to change. A tool that was meant to streamline operations ends up underutilized, leaving leadership questioning whether it was worth the cost.
The truth is, legal tech success isn’t just about the software—it’s about how effectively it’s integrated, adopted, and measured. Firms risk wasted budgets and missed opportunities for efficiency gains without a clear ROI strategy.
To ensure legal tech investments deliver real value, focus on:
- Key ROI Metrics – Measure time saved, cost reductions, and improved work quality to assess real impact.
- User Adoption – Aim for 80% active usage within 90 days to ensure long-term success.
- Common Challenges – Address low adoption rates, integration issues, and misaligned team goals early.
- Calculation Basics – Use financial data (e.g., time savings) and operational insights (e.g., error reduction) to measure ROI.
- Continuous Improvement – Regular reviews and industry benchmarks help fine-tune strategies for sustained returns.
Choosing the right ROI/metrics for your legal innovation project
Key Success Metrics for Legal Tech
To measure the success of legal technology implementations, focus on three core areas: financial savings, work quality improvements, and user adoption. Tracking these key metrics ensures organizations get measurable returns on their investments.
Financial Savings
Measuring cost efficiency is one of the most direct ways to evaluate legal tech ROI. According to Statista, every dollar invested in legal tech in North America yielded an estimated $4.61 return on investment in 2021. Firms can track these cost savings through:
- Operational Cost Reduction: Track expenses related to document management, legal research, and contract reviews before and after implementation.
- Outside Counsel Cost Savings: Measure the reduction in external legal spending after automating in-house tasks.
- Cost-per-Matter Reduction: Compare the average cost of handling legal matters before and after legal tech adoption.
| Metric Type | Typical Improvement Range |
|---|---|
| Document Processing | 40% time reduction |
| Outside Counsel Spend | 25-30% reduction |
| Cost-per-Matter Efficiency | 33% improvement |
Work Quality Improvements
Is legal tech truly enhancing the quality of legal work, or is it just another operational tool? While cost savings are critical, tracking work quality improvement metrics ensures that legal tech delivers real efficiency and accuracy gains.
Key quality metrics to focus on include:
- Error Rate Reduction: Measure the decrease in contract drafting and document review errors.
- Settlement Outcomes: Analyze whether tech-assisted case management leads to more favourable settlements or faster dispute resolutions.
- Client Satisfaction Scores: Use surveys and feedback tools to track whether legal tech enhances client satisfaction.
User Feedback and System Usage
A legal tech solution is only as effective as its users. Even the most advanced tools will fail to deliver meaningful ROI if adoption rates are low.
Key usage metrics to monitor:
- Active Usage Rates – Track daily and monthly active users to gauge adoption levels. Low engagement often signals a need for better onboarding or training programs.
- Feature Utilization – Identify which features are frequently used versus underutilized. Additional training or system adjustments may be necessary if critical functions remain unused.
- Task Completion Rates – Measure how many legal tasks (e.g., contract reviews, filings, case management) are completed through the software. A rising completion rate often indicates improved efficiency and workflow integration.
- User Satisfaction Scores – Use quarterly surveys to gather insights on usability, challenges, and potential improvements. Tools with high satisfaction ratings tend to have higher retention and continued engagement.
How to Calculate Legal Tech Returns
Measuring the return on investment (ROI) of legal tech requires a combination of financial analysis and operational insights. Without a structured measurement framework, firms may struggle to prove the real impact of their technology investments.
But how do you determine whether your legal tech is truly paying off? Imagine implementing a contract management system to streamline workflows, only to find that contract processing times remain unchanged. Without proper tracking, it’s difficult to pinpoint whether the issue lies in adoption, integration, or the tool itself.
A structured ROI calculation helps avoid these uncertainties by assessing measurable improvements, such as reduced contract review time, lower reliance on outside counsel, and increased billing accuracy.
Establishing a Baseline
Before calculating ROI, it's essential to set clear benchmarks by documenting current costs, time commitments, and process inefficiencies. These baselines act as the starting point for measuring improvements after implementation.
Key baseline metrics to document:
- Outside Counsel Fees – Track expenditures on external legal services to compare post-implementation savings.
- Time Spent on Document Reviews – Measure how long contract reviews, legal research, and filings take before automation.
- Error Rates in Contract Drafting – Record how often contract errors occur and their impact on deal timelines.
- Client Satisfaction Levels – Collect feedback from internal and external clients to assess how legal tech enhances service quality.
Establishing these benchmarks provides a clear before-and-after picture, ensuring that improvements can be measured accurately.
"A well-defined baseline is the foundation of any meaningful ROI analysis. Without a clear understanding of existing costs, inefficiencies, and workflow bottlenecks, measuring success becomes guesswork rather than strategy."
Tracking Direct and Indirect Benefits
The financial impact of legal tech can be directly quantified through cost savings and efficiency gains or indirectly through improved workflows and risk reduction.
Direct financial benefits to track:
| Metric Type | Typical Improvement | Measurement Method |
|---|---|---|
| Cost per Matter | 30-40% reduction | Compare historical legal spending per case before and after tech adoption. |
| Time Savings | 40-60% reduction | Measure hours saved per matter using automation and AI-powered tools. |
| Revenue per Lawyer | 12-18% increase | Track improvements in billable hours due to process automation. |
| Write-off Reduction | 22% improvement | Compare billing accuracy rates and reduced invoice disputes. |
Indirect benefits to track:
- Contract Execution Speed – Measure the reduction in contract approval time by comparing pre-and post-implementation cycle lengths.
- Regulatory Compliance Rate – Track the frequency of compliance violations or policy breaches to assess how well legal tech ensures adherence.
- Work Allocation Efficiency – Evaluate the percentage of time legal teams spend on strategic work versus administrative tasks, ensuring more focus on high-value legal activities.
Setting Up a Tracking System
Firms need a structured tracking system that continuously captures performance data to measure ROI effectively.
Recommended tracking methods:
- Daily Dashboards – Monitor real-time adoption rates, system usage, and task completion metrics to identify early adoption trends.
- Monthly Reports – Analyze key performance indicators (KPIs), including time savings, cost reductions, and feature utilization.
- Quarterly Reviews – Evaluate broader impacts such as improved client retention, regulatory compliance, and long-term cost savings.
By establishing clear benchmarks, tracking direct and indirect benefits, and using structured reporting tools, firms can accurately measure the ROI of legal tech and ensure long-term success.
Common Problems and Solutions
Even with a structured approach, legal tech implementation has challenges that can impact return on investment (ROI). Understanding these roadblocks and addressing them early ensures smoother adoption, better performance tracking, and long-term success:
1. Getting Staff to Use New Tools
A significant challenge in legal tech adoption is low engagement. No matter how advanced the technology, it won’t deliver results if employees fail to use it consistently.
What to Do:
- Simplify Onboarding: Break training into small, digestible sessions instead of overwhelming teams with full-day workshops. Microsoft emphasizes treating technology adoption similarly to onboarding a new team member. This involves integrating new tools into daily workflows and providing continuous support to ensure employees effectively understand and utilize the technology.
- Highlight Immediate Benefits: Show how the tool reduces workload—whether by automating document review or minimizing manual contract tracking.
- Encourage Early Wins: Start with small, high-impact tasks to build confidence in the new system.
- Create an Innovative Environment: Tech companies like Google foster a culture of innovation by creating the right environment, hiring adaptable professionals, and empowering teams to explore new ideas. This same approach can drive the successful implementation of legal tech. When legal teams are encouraged to experiment with new tools in a low-risk setting, they are more likely to adopt and integrate technology into their workflows effectively.
📌 Pro Tip: Focus on user experience. If a platform is complicated, employees will resist using it. Choose solutions that align with existing workflows to minimize disruption.
2. Fixing Tech Connection Issues
One of the biggest frustrations in adopting new legal tech is integration failures. The implementation will be slow and ineffective if the software doesn’t connect well with case management, contract lifecycle management (CLM), or billing systems.
How to Prevent This:
- Test Compatibility Early: Before fully adopting a system, verify its ability to integrate with existing tools.
- Use Middleware Solutions: These act as a bridge between systems, ensuring smooth data transfers.
- Involve IT Teams from the Start: A legal tech solution is only as good as how well it fits into your firm’s broader technology ecosystem.
📌 Example: If your firm relies on e-signature platforms, ensure the legal tech seamlessly integrates with those tools. Otherwise, workflows may slow down instead of speeding up.
3. Aligning Goals Across Teams
Legal tech investments often stall because different departments track success differently. For example:
- Legal teams may focus on reducing outside counsel costs.
- Compliance teams may prioritize risk mitigation.
- Business executives may measure success based on deal closures.
If teams don’t align, ROI tracking becomes inconsistent.
What to Do:
- Define Shared Metrics: Establish KPIs that reflect benefits across departments.
- Regularly Review Adoption Rates: Track usage levels to ensure legal tech supports all teams effectively.
- Encourage Cross-Department Collaboration: When legal, finance, and operations work together, tech solutions deliver broader business value.
Making Improvements Over Time
Legal tech success doesn’t stop at implementation. Ongoing improvements ensure maximum ROI. Here’s how to achieve that:
- Comparing Performance Against Industry Standards
Legal departments should benchmark their performance against industry standards to refine their use of legal tech.
Key Metrics to Track
| Performance Area | Benchmark Range |
|---|---|
| E-Discovery Speed | 35-45% faster |
| Contract Review | 25-40% cycle reduction |
| Compliance Findings | Below 20% issue rate |
Tracking these benchmarks helps firms understand where their legal tech investments deliver value and where adjustments are needed.
- Expanding Your Tech Stack Strategically
Adding more legal tech solutions should be a step-by-step process. Instead of investing in multiple tools at once, prioritize solutions based on ROI.
Recommended Approach:
| Phase | Key Action |
|---|---|
| Benchmark | Identify pain points and workflow inefficiencies |
| Pilot | Test the tool on a small scale before full adoption |
| Rollout | Gradually introduce the tool to more teams |
| Optimization | Adjust workflows based on user feedback |
"Adopting new legal tech isn’t about chasing the latest tools—it’s about strategically filling gaps in efficiency, compliance, and cost control. The right technology, implemented at the right time, transforms legal teams from reactive to proactive."
- Linking Legal Tech to Business Outcomes
Legal tech success goes beyond cost savings—it directly impacts business efficiency.
Key Areas to Measure Impact:
| Legal Tech Benefit | Business Impact |
|---|---|
| Faster Contract Execution | Accelerates deal closures |
| Improved Compliance Tracking | Reduces regulatory risks |
| Time Savings for Lawyers | Allows focus on higher-value tasks |
By regularly reviewing these outcomes, firms can validate their legal tech investments and identify areas for future improvements.
Conclusion: Maximizing Legal Tech Returns with the Right Strategy
Maximizing legal tech ROI requires more than just implementation—it demands continuous measurement, optimization, and alignment with broader business objectives. Legal teams that track key metrics refine adoption strategies, and integrate the right solutions see the most significant returns, from reducing contract cycle times to improving compliance and lowering operational costs.
Structured evaluation methods help legal departments fine-tune their approach, ensuring sustained efficiency gains and cost savings. However, achieving these results often requires access to the right expertise.
Lawtrades connects legal teams with top-tier professionals who can support legal tech adoption, process optimization, and compliance management. Whether you need experts to guide implementation or scale operations efficiently, Lawtrades offers flexible, on-demand legal talent that helps maximize the value of your legal tech investments. Discover how Lawtrades can support your legal tech strategy.
