Why ‘cost savings’ is rarely a KPI in legal—yet increasingly an ambition

Over the past few years, I’ve spoken with more than a hundred General Counsel. One question keeps coming up: how important are legal costs, really? And if they matter so much, why are they so rarely a key performance indicator? In this blog, I’ll share the three most common reasons I hear—and why it may be time to rethink them.

Trust first, cost later

When hiring external counsel, trust is the first priority for many GCs. Trust in the people, in the firm’s reputation, and in the quality of the advice. Once that trust is there, cost often takes a backseat. Sometimes, GCs also aren’t the final decision-makers—executives or business units may decide who gets the work.

Why legal costs aren’t a KPI (but maybe should be)

1. “The costs are unpredictable”
That’s partly true. You can’t foresee everything—opposing parties, regulators and court schedules often follow their own timelines. But a large share of legal costs can be forecasted from business plans. The groundwork usually lives on the desks of sales, procurement, or operations.

2. “We can’t estimate costs properly”
Also partly true. Costs are hard to budget when you don’t ask for a fixed price. Firms often say: “It depends.” But with the right tools and some experience, it’s perfectly reasonable to ask for a range. No price = no control.

3. “It’s a small part of the total”
Maybe at the project level. But not when you look at the legal department’s overall budget. External legal spend often takes up a significant share. Every euro you save can be reinvested in better processes, technology, or capacity.

Not a KPI, but definitely an ambition

What we are seeing more often: GCs who do take ownership and are committed to reducing costs structurally. Not out of penny-pinching, but to free up space for innovation. Legal tech plays a key role, as do clear agreements on pricing, outcomes, and collaboration.

Looking for ways to reduce external legal costs without compromising quality?
We’re happy to help you explore the options.

Get in touch with Maarten Hagen.