An In-House Legal (IHL) Dept. Efficiency Audit-also called a Current State Assessment-is the single most important diagnostic exercise for any legal department embarking on transformation. It is not a box-ticking exercise; it is a strategic deep dive into the operational DNA of your legal team.

Why? Because transformation without diagnosis is guesswork. You cannot design a future state without understanding your starting point. The audit provides clarity on what is working, what is broken, and what is missing. It identifies inefficiencies, uncovers hidden strengths, and surfaces opportunities for improvement. It also creates a baseline against which progress can be measured-critical for demonstrating ROI and securing stakeholder buy-in.

This audit is not about compliance alone. It examines the 15 critical in-house functions that collectively determine legal department performance-ranging from contract management and litigation oversight to technology adoption and knowledge management. It evaluates people, processes, and platforms, and how they interact to deliver value to the business.

Skipping this stage is a strategic error. Without hard data, transformation plans risk being misaligned, under-resourced, and ultimately ineffective. Worse, you will lack the evidence to prove success, leaving your legal team vulnerable to scepticism and budget cuts.

PAA: Why is a Current State audit critical for legal transformation?

Because you cannot design an effective future state without understanding your starting point.

The scope of an IHL Dept. Efficiency Audit typically includes:

◼️Process Investigation: Detailed auditing of “Current Status” by reference to the 15 key legal processes that make up the primary performance of an in-house legal team.

◼️Critical Resource Enablers: an investigation into the presence and performance of the individual      Critical Resource Enablers that make up each in-house legal team process. 

◼️Performance Benchmarking: Compare current legal team performance against industry standards and best practices – but particularly “peer” in-house legal team.

◼️Resource Combination: Are in-house resources being combined optimally in order to achieve maximum leveraged productivity outcomes. 

◼️Process Optimisation: is the handover between individual components of a legal function process achieving performance optimisation

◼️Technology Utilisation: Evaluate the effectiveness of existing legal tech tools and identify gaps.

◼️User  Feedback: Gather insights from internal clients on service quality, responsiveness, and value.

◼️Legal Team Engagement: Capture views from legal team members on pain points, aspirations, and improvement ideas.

◼️Risk Profile Analysis: Review compliance posture and exposure to operational or regulatory risks.

◼️Data Capture: Establish baseline metrics for turnaround times, cost per matter, and workload distribution.

PAA: What metrics should be included in an efficiency audit?

Turnaround times, cost per matter, workload distribution, stakeholder satisfaction, and technology adoption rates.

In GLS legal ops speak – the IHL Dept. Efficiency Audit is considered a “Foundational” resource within the process ecosystem of an in-house legal team.

The Foundational Resource: Is responsible for determining the overall performance capabilities of a “critical” legal function. If it is not optimised, the function can never be optimised. 

The best practice features of the GLP are as follows:

◼️Comprehensive Coverage: Audit all 15 critical in-house functions, not just legal advice delivery.

◼️Data-Driven Insights: Use quantitative metrics alongside qualitative feedback for a balanced view.

◼️Stakeholder Inclusion: Engage internal clients and legal team members to ensure buy-in – be as inclusive as possible by utilising desk top survey in addition to face to face auditing

◼️Benchmarking: Compare performance against industry norms to identify realistic improvement targets.

◼️Technology Assessment: Evaluate current tools and integration with business systems.

◼️Actionable Outputs: Translate findings into clear priorities and transformation objectives.

◼️Repeatability: Design the audit as a process that can be repeated annually for continuous improvement.

◼️Confidentiality & Sensitivity: Handle feedback and performance data with discretion to maintain trust.

The IHL Efficiency Audit delivers the following value to the Business:

◼️Transformation Targeting: Provides precise data to identify which legal processes, resources, and technologies will deliver the greatest ROI when optimised.

◼️Cost Optimisation: Pinpoints inefficiencies that inflate legal spend unnecessarily-whether through duplicated effort, manual processes, or underutilised technology-enabling targeted cost reduction without compromising quality.

◼️Performance Transparency: Creates visibility into legal department performance metrics, allowing the business to understand where legal adds value and where improvements are needed.

◼️Faster Deal Execution: Streamlines contract workflows, approval chains, and compliance checks that often delay commercial transactions, accelerating revenue generation and strategic initiatives.

◼️Risk Reduction: Identifies compliance gaps, governance weaknesses, and operational blind spots before they escalate into costly disputes, regulatory penalties, or reputational damage.

◼️Stakeholder Confidence: Demonstrates a structured, data-driven approach to legal department transformation, reassuring boards, investors, and regulators that governance is robust and scalable.
 
◼️Measurable Progress: Establishes baseline metrics for turnaround times, cost per matter, and workload distribution, enabling the business to track and evidence improvements over time.

◼️Strategic Alignment: Ensures legal priorities are aligned with corporate objectives, so legal becomes a growth enabler rather than a bottleneck.

◼️Investment Justification: Provides hard data to support investment in legal technology, additional headcount, or process redesign, making business cases compelling and defensible.

◼️Competitive Advantage: Positions the organisation to leverage legal efficiency as a differentiator-faster deals, lower risk, and stronger governance all contribute to market credibility.

PAA: How does an efficiency audit impact investor confidence?

By demonstrating governance maturity and operational discipline, which reduces perceived risk and increases valuation potential.

PAA: Can an audit reduce legal costs immediately?

Yes-by identifying redundant processes, unnecessary external spend, and opportunities for automation.

PAA: How does the audit accelerate revenue generation?

By removing bottlenecks in contract execution and compliance approvals that delay deal closure.

PAA: Why is performance transparency important for the business?

It allows leadership to make informed decisions about resource allocation and strategic priorities.

PAA: Does the audit help justify technology investment?

Absolutely-it highlights inefficiencies that tech can solve, making ROI clear.

PAA: How does the audit support risk management?

By uncovering compliance gaps and governance weaknesses before they become liabilities.

PAA: Can efficiency audits improve board confidence?

Yes-boards value structured, data-driven approaches to governance and operational improvement.

PAA: How does strategic alignment benefit the business?

It ensures legal resources are focused on enabling growth, not just managing risk.

PAA: What is the link between efficiency and competitive advantage?

Efficient legal teams close deals faster, reduce risk exposure, and enhance investor trust.

PAA: Does the audit influence ESG or compliance reporting?

Yes-by improving governance processes, it strengthens ESG credentials and regulatory compliance.

PAA: How does an efficiency audit impact business valuation?

Strong governance and operational efficiency enhance investor confidence and can positively influence valuation.

For the legal team, the IHL Dept. Efficiency Audit delivers:

◼️Operational Clarity: Provides a precise map of current capabilities, workflows, and resource allocation, enabling leadership to understand what is working and what is broken.

◼️Prioritisation Capability: Equips the legal team with hard data to make informed prioritisation decisions-what to fix first, what to optimise later, and what can be left as is.

◼️Performance Baselines: Establishes measurable benchmarks for turnaround times, cost per matter, and workload distribution, against which future improvements can be evidenced.

◼️Efficiency Planning: Enables structured sequencing of transformation initiatives, ensuring that high-impact changes are implemented first for maximum ROI.

◼️Resource Justification: Supplies objective evidence to support requests for additional headcount, budget, or technology investment, making business cases far more compelling.

◼️Risk Visibility: Highlights compliance and operational risks that may not be apparent in day-to-day firefighting, allowing proactive mitigation.

◼️Strategic Positioning: Transforms legal from a reactive service provider into a proactive business partner by aligning operational improvements with corporate objectives.

◼️Knowledge Leadership: Builds internal expertise in legal operations and performance management, positioning the department as a centre of excellence.

◼️Stakeholder Engagement: Creates a collaborative platform for internal clients and legal team members to contribute to shaping the transformation roadmap, reducing resistance to change.

◼️Technology Readiness: Identifies gaps in current tech utilisation and integration, ensuring that future investments are targeted and effective.

◼️Continuous Improvement Culture: Embeds a mindset of data-driven decision-making and iterative optimisation within the legal team.

PAA: How does an efficiency audit help with prioritisation?

By providing data-driven insights into which processes deliver the least value or consume the most resources, enabling targeted improvements.

PAA: Why are performance baselines critical?

They allow the legal team to demonstrate measurable progress and ROI, which is essential for sustaining executive support.

PAA: Can an audit improve morale?

Yes-by involving team members in shaping the future and addressing pain points, it fosters ownership and engagement.

PAA: How does the audit support technology decisions?

It identifies underutilised tools and integration gaps, ensuring future tech investments solve real problems.

The IHL Efficiency Audit is essential for:

◼️General Counsel: To set transformation priorities and secure executive buy-in.

◼️Legal Operations Leaders: To design and implement efficiency strategies.

◼️Executive Leadership: To understand legal’s contribution to business performance.

◼️Compliance Officers: To monitor risk exposure and governance standards.

◼️Board Members: To evaluate legal department effectiveness as part of corporate oversight.

A legal team operating without an IHL Efficiency Audit will face a wide range of inefficiencies including:

◼️Misaligned Priorities: Transformation efforts that fail to address real pain points.

◼️Resource Waste: Investment in tools or processes that do not solve core issues.

◼️Stakeholder Frustration: Internal clients perceive legal as unresponsive or misaligned.

◼️Missed Opportunities: Failure to leverage technology or process improvements for competitive advantage.

◼️Inability to Prove ROI: Lack of baseline data undermines credibility of transformation outcomes.

◼️Compliance Risks: Blind spots in governance processes leading to regulatory exposure.

Technology plays a dual role in the IHL Efficiency Audit:

◼️Diagnostic Tools: Online platforms (like GLS Legal Dept. Efficiency Audit) automate data capture and analysis.

◼️Benchmarking Engines: Compare performance metrics against industry standards.

◼️Survey Tools: Collect stakeholder feedback efficiently and anonymously.

◼️Data Visualisation: Present findings in dashboards for easy interpretation and decision-making.

◼️Integration Assessment: Evaluate how legal tech interacts with enterprise systems (ERP, CRM).

PAA: Can technology replace a human-led efficiency audit?

No-technology enhances data collection and analysis, but strategic interpretation requires human expertise.

1. How long does an efficiency audit take?

Typically 4–6 weeks for a comprehensive review.

2. Who should lead the audit?

Legal operations professionals or external consultants with expertise in legal performance diagnostics.

3. Does an efficiency audit require external support?

Not always, but external expertise ensures objectivity and benchmarking accuracy.

4. Can efficiency audits improve team morale?

Yes-by involving team members in shaping the future and addressing pain points.

5. What happens if you skip the audit?

Transformation efforts risk being misaligned, ineffective, and impossible to measure.

6. Is stakeholder feedback mandatory?

Yes-it ensures transformation addresses real business needs.

7. Can an efficiency audit identify technology gaps?

Absolutely-evaluating tech utilisation is a core component of the audit.

8. What metrics should be prioritised?

Turnaround times, cost per matter, workload distribution, and stakeholder satisfaction.

9. How often should audits be repeated?

Annually or before major organisational changes.

10. Does the audit cover compliance?

Yes, but its primary focus is operational efficiency and transformation readiness.