Legal Design and ROI: How to measure it?

According to McKinsey (Business Value of Design - 2018) companies placing design at the heart of their strategy would double their industry's benchmark growth.

But will this also apply to your company? If so, how do you measure it? What are the relevant indicators for your company?

In this article, we explain why it is important to measure the ROI of your legal design projects and how to do it.

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Definition: Legal Design and ROI

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Legal Design

The legal design is a technique, a subject, a method and a multidisciplinary state of mind that borrows the methodologies of Design to apply them to the conception, practice and dissemination of Law. It consists in placing the users of the law at the center of its creative process to convey the most understandable, engaging and usable message possible.

A single objective: "To create, at last, a satisfactory user experience of the law" according to Marie Potel-Saville who is among the pioneers of legal design in France.

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📖 Going Further: Understanding the Legal Design movement

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Return on Investment (ROI)

It is a series of qualitative or quantitative data that measures the gains made on a past, current or future investment. The ROI approves or rejects a solution x brought to a problem y. In business, the return on investment is not calculated in direct monetary value, other indirect indicators allow to reliably transcribe the ROI of a solution, of an operation. These indirect indicators obviously have a significant impact on the company's activity and therefore on its turnover.

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How to calculate the ROI? 

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ROI = (Investment gain or loss - Investment cost) / Investment cost

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If we take the example of an in-house or outsourced legal design project

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‍Gainor loss of the investment = depends on the objective

• Negotiation cycle reduced to 1 vs 3 months
• Increase in the rate of contract signing
• 40% decrease in daily traffic

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Investment cost = elements to be taken into account will depend on the variable outsourced or internalized project

• Cost of the legal design agency's services
• Volume of hours of project teams and collaborators involved
• Cost of design software licenses or other tools used

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Example: For an investment costing 20,000 euros and yielding a profit of 100,000 euros, the ROI of the legal design project is equal to (100,000 - 20,000) / 20,000, or 400%.

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Why is it important to measure the ROI of legal design?

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Legal Design is not a creative art project designed to amuse the Legal Department.

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👋 Disclaimer : Obviously, from company to company, sometimes even from region to region, your metrics, communication patterns and internal customer interests will not be the same. The information below is not an absolute truth. It is only a first reading grid that you can adapt to your specific case.

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Let's break down, by internal client, their interests (what's in it for them) and the challenge it will represent for you.

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Why demonstrate the ROI of Legal Design to the General and Financial Management?

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Interests (What's in it for them):

• Growth / Profitability of the company
• Ensure the achievement of strategic objectives
• To be able to quantify the return on investment of this project and its impact on the company. Is it a nice-to-have, a trend or is there a real need?

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Challenge for you:

• Here your challenge is to explain to them how your project will enable them to use the legal system as a performance lever by allowing the marketing, sales and business teams to achieve their objectives. You will also be expected to provide a quantified return on investment for the project.
• It is up to you to propose a provisional schedule on which you will commit to sharing the results obtained. Be humble and honest, this is a test on a first vertical.
• If the results are poor, the experiment will be terminated.
• On the other hand, if the results are promising, these results will be the main arguments that will allow you to deploy legal design on other verticals within the company.

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Why demonstrate the ROI of Legal Design to your operational staff?

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➡️ Let's take the example of the Sales Department.

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‍Interest(What's in it for them):

• Growth / Profitability of the company
• Participate in the achievement of strategic objectives
• Legal Design must help us to reduce the negotiation cycles with our key accounts without compromising on strategic clauses for the company.

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Challenge for you: Here your challenge is to explain to them how your project will help them achieve their goals.

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➡️ Let's take the example of the Marketing Department.

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‍Interest(What's in it for them):

• Growth / Profitability of the company
• Participate in the achievement of strategic objectives
• How legal design helps us reconcile RGPD compliance requirements and conversion interests on our website through a simple, efficient and fully transparent user journey (conversion funnel).

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Challenge for you: Here your challenge is to explain to them how your project will help them achieve their goals.

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Why demonstrate the ROI of Legal Design to your Legal Department?

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‍Interest(What's in it for them):

• Growth / Profitability of the company
• Participate in the achievement of strategic objectives
• To be in conquest of new subjects, or strategic subjects rather than undergoing the flood of solicitations
• Be able to take pride in their impact and gain recognition from their internal customers

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Challenge for you: Here your challenge will be to use legal design as one of the tools that will allow you to create a winning team dynamic, able to highlight its performance and no longer be labeled as a cost center for example.

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Why demonstrate the ROI of Legal Design if you are a Legal Operations Manager?

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‍Interest(What's in it for them):

• Growth / Profitability of the company
• Participate in the achievement of strategic objectives
• Demonstrate the added value of Legal Operations within the company
• Build a team to conquer new or strategic subjects rather than passively undergoing the flow of solicitations

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Challenge for you: Here your challenge will be to demonstrate how Legal Ops can help the Legal Department and the company as a whole achieve its strategic goals. Personally, it will allow you to demonstrate the success of an additional project with a lasting impact on the company.

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Be careful, this does not mean that we should be too focused on immediate ROI, even though it may be long-term. The injunction of immediate performance and results is often heavy to bear when carrying a legal design project on your shoulders. Whether you have brought in an external service provider or not, you will be asked to justify a return on investment that is at least greater than the value of the man-days you have spent.

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It is up to you to set the pace of your project and to keep the stakeholders regularly informed: your board, your CFO, your General Counsel, your team.

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For example, propose a timeline indicating the indicators you will follow over time. Make it your reference document, a clear and synthetic one-pager, which will allow you to answer questions about the ROI of legal design.

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By initiating your legal design project, you have persuaded and partially convinced the stakeholders around you by relying on figures external to the realities of the company. This is a first step.

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The second is to transform this persuasion into conviction, through figures. Quantitative or qualitative data that prove that the project you have implemented has a direct impact on the achievement of the company's strategic objectives. This is the data that will allow you to convince, once and for all.

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Moreover, this data will be very useful to you to propose versions that are always as close as possible to the needs of your internal customers. Without tools, without rigor and without regularity, it will be almost impossible to measure anything.

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Legal Design KPI

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Without workflow and digital tools, it will be almost impossible to measure anything. So, far be it from us to offer you a listing of legal design kpis without giving you some suggestions of measurement methods or tools.

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Measure the ROI of Legal Design from the time saved in man-days

Time is money. Benjamin Franklin's adage still rings true. Nothing is free. Even if your projects are internalized. The budget allocated equals the time spent by your employees. That's FTE, your CFO will tell you. The EBITDA is an instrument that participates in the measurement of the company's value. Thus, reducing the time spent by teams working on a given operation allows them to focus on new opportunities. So potentially more revenue for the same payroll.

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• Theme: Savings

• Tool: Clockify‍

• Note: Involves explaining to employees that you will use this tool to measure the ROI of their project, not to monitor them.

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Measuring the ROI of Legal Design from the average time to conversion

A reduced average conversion time is time saved for your sales teams to go out and win new contracts. It is an indirect way to help you reach or exceed your sales objectives.

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• Theme: Savings

• Automatically: Contract Management Software‍

• Manually: Spreadsheet in which you will have to rigorously list the start and end dates

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Measure the ROI of Legal Design from the rate of signature of commercial proposals

Allows you to evaluate the evolution of the contract signing rate before and after the implementation of the project to measure its impact on conversion.

You can access this information on your company's CRM. Ask for access to the CRM to your internal customers who have administrator licenses. You will have access to the sales pipeline with several steps, including, in principle, the sales proposal step. Depending on the CRM, you will be able to access statistical dashboards and generate reports in a few clicks.

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• Theme: Savings

• Tool : CRM

• Calculation of the signature rate: (Nb of signed contracts / Number of sales proposals) x100

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Measure the ROI of Legal Design from the satisfaction of your internal customers

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• Theme: Team development

• Measure with the Net Promoter Score (NPS): at the end of each use of your deliverable.

• Measuring from the Satisfaction Questionnaire: at the end of a given period of time (3 months, 6 months, 12 months etc...)

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Measuring the ROI of Legal Design based on the number of financial sanctions and their cost

The financial penalties stem from the issue you wish to resolve.

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• Theme: Savings

• How to proceed? Compile the financial penalties prior to the implementation of your legal design project. Perform a pre-legal design/post-legal design comparison after a given period of consistent time.‍

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Measure the ROI of the Legal Design from the opening rate / click rate of the emailing campaigns of the Legal Department

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• Theme : Visibility and listening of the Legal Department / Impact of the legal culture

• Tool : Any emailing tool allowing you to obtain statistics following the sending of your campaigns

• Open rate: (Number of emails opened / Number of emails sent) x 100

• Click-through rate: (Number of emails clicked / Number of emails sent) x 100

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Measure the ROI of Legal Design from heat maps on your documents

A heatmap is a tool that allows you to visualize the "hot" areas of a web interface.

This will allow you to understand the behavior of your users once your project is implemented and to rely on this real interaction data to take the necessary improvement measures.

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• Theme: Detecting what works and what doesn't

• Tool: Hotjar, for example

• Hot zone = area where visitors interact the most on a web or mobile interface

• Cold zone = area where visitors interact the least on a web or mobile interface

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Measure the ROI of Legal Design from the statistics maps of your audio content

Cumulative listening can be useful to measure the performance of your actions if you use audio content on your deliverables.

The number of cumulative listeners measures the performance of an audio format in terms of listeners. Do not confuse the number of cumulative listeners with the number of unique listeners.

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• Theme : Visibility and listening of the Legal Department / Impact of the legal culture

• Tool: Ausha, for example

• Note: Ausha will allow you to publish your podcast in a restricted way, only to your company's collaborators. This is a private RSS link. Ausha's statistics dashboard will allow you to track the number of cumulative listens and other types of statistics related to your audio format.

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