The Top 5 Law Department Metrics for Insurers [Infographic]

by | Jan 8, 2016

The Top 5 Law Department Metrics for Insurers [Infographic]-header

Law departments within insurance companies demonstrate a high level of sophistication in corporate legal maturity.  Consider the following:

  • Legal costs are lower. Median partner billing rates are the lowest among the practice areas tracked by the CounselLink® team.
  • Rates tend to be stable. Legal rates in insurance work also have the least volatility with a score of 2 out of a possible 10.
  • Highest AFA utilization. Legal departments in insurance have the highest AFA utilization rates – 15.6% of matters structured under alternative fees.

These data points stem from the most recent Enterprise Legal Management Trends Report (Mid-Year Update 2015), which is based on invoices processed.  However, to gain a better understanding of operations within insurance – and specifically legal departments within Property & Casualty (P&C) carriers – we surveyed 94 organizations to identify:

  • What legal department metrics are being used?
  • Which metrics are most effective?
  • What cost control initiatives are being implemented in the New Year?

Top 5 Legal Department Metrics 

The top legal department metrics – those metrics law departments identified as most effective for insurance carriers are:

  1. Average total cost of case (loss + legal costs): 84% use it and 72% rate it effective.
  2. Legal expense per case: 82% use it and 65% rate it effective.
  3. Cycle time (days to resolution): 82% use it and 62% rate effective.
  4. Loss per litigated case: 77% use it and 60% rate it effective.
  5. Allocated loss adjustment expense (ALAE) as % loss ratio: 71% use it and 60% rate it effective.

These results have been rendered in a visual format in the infographic nearby and are this week’s Friday Share.  In addition, we’ve published a summary of the findings here and the complete report can be downloaded freely with registration:  U.S. P&C Law Departments Rate the Metrics They Use to Manage Costs and Performance.

Infographic: Law Departments Rate Metrics to Managed Costs

click here or image for higher resolution

Law Departments Rate Metrics Used to Managed Costs-small

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Photo credit:  Flickr, Martin Fisch, give me five (CC BY-SA 2.0)

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