Why legal departments need better benchmarking

Legal departments have never had more information about external legal spend. Rates, discounts, budgets, invoices, accruals and forecasts are all easier to access than they were a few years ago.

And yet cost control is now the top strategic priority for GCs across the US, UK and Canada, according to Thomson Reuters' 2025 State of the Corporate Law Department report. A separate survey found that 79% of legal departments are under pressure to reduce outside counsel spend, yet 57% admit they do not track or quantify what they actually save.

More data has not solved the problem. Better comparisons are what will.

That is why legal benchmarking has become a much more important part of legal spend management. The question legal and finance teams are asking is whether they are comparing the right things — budget performance, forecasting accuracy, matter delivery and outside counsel performance — and not only hourly rates.

That changes what benchmarking is for and what it needs to do.

Key takeaways:

• Legal benchmarking has become a core part of legal spend management, supporting budgeting, forecasting, panel reviews and financial decision-making.
• Comparing hourly rates provides useful context. Stronger benchmarking also considers budget performance, forecasting accuracy, staffing and matter delivery.
• Legal analytics help legal departments understand outside counsel performance, compare similar matters and identify the recurring patterns that influence legal spend.
• Better benchmarking gives legal and finance teams greater confidence when managing budgets, forecasting costs and reviewing outside counsel management.
• Legal spend management software provides the continuous financial visibility needed to benchmark legal spend using current data rather than retrospective reporting.

Why has legal benchmarking become central to legal spend management?

There was a time when legal benchmarking was largely associated with annual panel reviews, rate negotiations and procurement exercises.

That has changed considerably. The same benchmark data now supports decisions throughout the financial lifecycle of legal work. Budgets are compared against previous matters before work begins. Forecasts are measured against similar engagements as they progress. Outside counsel performance is assessed using financial and operational data collected over time, rather than relying solely on the final invoice.

Legal departments are expected to explain financial performance with greater confidence than ever before, whether they are discussing forecasts with Finance, reviewing panel firms or planning future budgets. Benchmarking provides the context that those conversations depend on.

That's where legal benchmarking has changed most. Legal and finance teams are now comparing current matters against historical performance long before invoices are approved, using current financial data to assess budget performance, forecasting accuracy and outside counsel management as work progresses.

The 2025 CLOC State of the Industry report found that more consistent use of matter planning and budgeting was the top outside counsel management initiative implemented by in-house legal teams, cited by 50% of respondents, ahead of structured rate reviews.

The result is a more complete understanding of legal spend. Benchmarking helps legal departments understand how costs are developing while work is still underway, rather than waiting until a matter has finished. 

➡️Further reading: How legal teams can use benchmarking to improve decision-making

What effective legal benchmarking looks like today

No single benchmark explains legal spend on its own.

Pricing, budget performance, forecasting and outside counsel performance each answer different commercial questions. No single metric covers the full account of legal spend.

Comparing firms on hourly rates remains an important part of legal benchmarking. Pricing influences every commercial discussion and provides a consistent point of comparison across panel firms.

That is only one part of the decision, though. Benchmarking data from across the PERSUIT platform shows that the lowest-priced proposal wins only 48% of the time, suggesting legal departments are weighing a much broader definition of value when selecting outside counsel. 

Legal departments rarely answer pricing questions alone, though. They are also assessing budget performance, forecasting accuracy, financial predictability and outside counsel performance. Those decisions require broader benchmarks than hourly rates alone.

But digging into what those comparisons reveal over time is where legal analytics earn their place. Matter-level analysis allows organisations to compare similar work on a consistent basis, giving legal and finance teams stronger evidence when reviewing panel performance, planning future budgets and discussing financial performance with the business. 

➡️Read more: 6 tips to unleash the power of visualizing legal spend and WIP/accruals

How legal analytics strengthen legal benchmarking

The value of legal benchmarking depends on the quality of the comparison.

More data does not automatically produce better benchmarking. Better comparisons do.

Comparing one firm's litigation work with another firm's employment matters tells you very little. Comparing this year's legal spend with last year's may highlight a change in cost, but it does not explain whether the work, complexity or delivery were comparable.

Effective benchmarking depends on comparing like with like.

Legal analytics is where that becomes possible. Rather than reviewing broad portfolio averages, legal departments can benchmark similar matters by firm, practice area, jurisdiction, matter type or stage of delivery. Those comparisons produce a much clearer understanding of financial performance because they reduce the number of variables influencing the result.

The right analytics make those comparisons precise enough to act on:

• Are similar employment matters following comparable cost profiles across panel firms?
• Does one firm consistently outperform others on forecast accuracy for the same type of work?
• Are budget variances concentrated within particular practice areas or jurisdictions?
• Is the same pattern appearing across multiple matters, or is this a genuinely isolated event?

Gartner research published in December 2025 found that only one in five legal matters sent to outside counsel comes in within the planned budget. That figure makes a compelling case for benchmarking before work begins to understand current market pricing, and throughout the delivery of legal work, instead of waiting until it has finished. 

These comparisons help legal departments distinguish between normal variation and recurring patterns that warrant closer attention. And without consistent matter-level data, those comparisons are difficult to make with any confidence.

What changes when legal departments have confidence in their benchmarks?

Legal, Finance, Procurement and business stakeholders often approach external legal spend from different starting points. One team may focus on budgets. Another may be looking at forecasting accuracy. Outside counsel may be discussing delivery against scope. Without a common point of reference, those conversations can quickly become subjective.

And that makes reaching an agreement harder than it needs to be. Comparable financial data gives everyone the same context, making it easier to discuss performance, challenge assumptions and agree on the next course of action.

As a result, the difference shows up across every stage of the financial lifecycle:

• Budget discussions can be grounded in the performance of similar matters and current market activity, rather than individual expectations. 
• Forecast reviews become easier when current matters can be compared with previous engagements.
• Panel reviews can draw on consistent financial evidence collected over time.
• Outside counsel selection benefits from a fuller understanding of how firms have performed on comparable work.
• And that impact is perhaps most visible in the relationship with outside counsel. Current market benchmarks support commercial discussions before work begins, while continuous financial visibility keeps those conversations informed as work progresses. 

That’s where continuous legal spend visibility becomes essential. Rather than relying on a single point of reference at the invoice stage, legal and finance teams have a shared financial view throughout the lifecycle of legal work. Combined with our outside counsel selection capabilities, organisations can compare original commercial expectations with financial performance as work progresses, creating greater consistency from firm selection through to final invoice review.

➡️Further reading: Build stronger law firm partnerships through a modern approach to invoices

Why continuous legal spend visibility improves legal benchmarking

Historical reports, completed matters and approved invoices all have an important role. They explain how legal spend has developed over time. The challenge is that many commercial decisions are made before a matter has finished.

Every legal department has visibility into its own legal spend. Far fewer have visibility into how that performance compares with the wider market.

Part of the reason is that many legal benchmarks are still built from surveys or self-reported data. That makes it harder to understand whether your legal spend reflects current market conditions or information collected months earlier.

This has made broader market context much more valuable for legal departments looking to strengthen budgeting, forecasting, outside counsel selection and panel management.

Increasingly, legal departments are combining continuous visibility into their own legal spend with market benchmarking built from current proposals and legal transactions. With near real-time information, budgets can be reviewed against similar matters while work is still underway. Forecasts can be assessed before they become financial surprises. Outside counsel performance can be benchmarked using live matter data alongside current market benchmarks.

What better legal benchmarking looks like

Instead of waiting for panel reviews or year-end reporting, our legal spend management solutions combine continuous legal spend visibility with market benchmarking built from more than $22 billion of real proposals and legal transactions. That means legal and finance teams are comparing their own legal spend with current market activity, using benchmarking built from real proposals and legal transactions.

That allows organisations to:

• Benchmark internal performance alongside current market pricing and firm performance.
• Compare legal spend with market benchmarks built from more than $22 billion of real proposals and legal transactions.
• Understand how current pricing compares with commercial agreements being reached across the wider market.
• Identify cost trends before invoices arrive.
• Give Finance direct access to current legal spend data, reducing manual reporting.
• Improve forecasting using live matter-level financial information.
• Support panel reviews with consistent financial evidence.
• Benchmark similar work across firms, practice areas and jurisdictions.
• Have earlier, more informed conversations with outside counsel while work is still underway.

The clearest example comes from our customers. 

As Bill Priestley, Chief Investment Partner at Epiris, explains:

"The key point is that there is a degree of clarity when both sides can see where the time is spent more precisely. Rather than having to say, ‘please send me reams and reams of information’, you can see it in Apperio almost immediately. And not just when the money’s already been spent."

That level of visibility changes how legal spend is managed. Legal and Finance can review financial performance while work is still underway, address potential issues earlier and access the information they need without chasing it. 

Marex experienced that directly after introducing Apperio across Legal and Finance. The business replaced manual spreadsheets with current legal spend data, giving Finance direct access to the information needed for forecasting, accruals and month-end reporting. 

Since implementing Apperio, Marex has:

✔ Reduced legal administration by 90% by enabling Finance to self-serve legal spend data.
✔ Automated reporting across 10+ international law firms.
✔ Gained real-time visibility into current and future legal spend, improving planning and financial decision-making.
✔ Reduced audit time, risk and cost through accurate real-time accrual data.

Current financial visibility improves how legal departments manage active matters. It also creates a richer financial record for future benchmarking, giving legal and finance teams stronger evidence for budgeting, forecasting, outside counsel selection and panel reviews. 

Better benchmarking starts with better comparisons

Getting legal benchmarking right depends on current data, matter-level analytics and a shared financial view across Legal and Finance. A spreadsheet and an annual panel review will only take you so far.

Every legal department has access to its own legal spend data. Putting that information into market context provides a much stronger foundation for commercial decision-making. 

If you'd like to strengthen legal benchmarking and legal spend management, we'd love to show you how we can help.

Our legal spend management solutions combine continuous visibility into your own legal spend with market benchmarking built from more than $22 billion of real proposals and legal transactions. That gives legal and finance teams current market context alongside their own financial performance, helping them make commercial decisions with greater confidence.