For some law firms, success is the ability to add new clients to their roster. And while that is an important part of any firm, there are plenty of examples of firms that are bringing in new clients and still find themselves struggling to stay afloat. Success that is sustainable and long-lasting requires greater efficiency and insight, and that requires measuring key performance indicators (KPIs).
Businesses of all stripes have long used metrics to measure their relative success, but law firms have largely considered themselves separate and exempt from the rules that govern businesses. But law firms are businesses, and like any business, they can’t take success as given or final. The modern legal customer is more frugal and therefore more discerning, especially in the current on-demand economy; why wouldn’t they demand value from their lawyer as they do with every other service? And law firms can’t fall back on being the only game in town with alternative service providers easily accessible from anywhere in the world via the internet. In order to survive, firms have to become leaner, more efficient, and more focused on meeting their client’s needs and keeping them satisfied if they hope to compete.
KPIs are fairly simple tools that have nevertheless been underutilized for too long by firms that were able to succeed and grow despite inefficiencies. They offer a means to track and understand how their resources are being used, and how they are performing in meeting clients’ needs. They provide a full view of your firm’s health, laid bare in numbers rather than a reliance on your own gauzy perceptions of relative performance. KPIs allow you to understand the detail of how each attorney spends their day, what they’re billing, and how clients feel about the quality of the legal work done for them. Far from being intrusive or micromanaging, it allows you to set realistic goals and expectations for both the firm and the attorneys that comprise it, and to ensure that your clients are getting the value and service that keeps them happy.
Tracking billable hours, profits, and customer satisfaction should be the standard at any firm, let alone any business, but there is still a long way to go before they reach something close to universal adoption across the legal sphere. The legal profession is an old one, and like any entrenched industry, there is a conventional wisdom and a reluctance to change how business is done. Resistance to KPIs can come from fear of change as much as broad institutional inertia, and trying to deal with the new data that come with measuring your work can feel like an unnecessary complication for those who are more comfortable with the traditional ways of running a law firm. But those ways are dying a slow death, and it is the firms that embrace the future of law that will survive and thrive.
To learn more about KPIs, sign up for Mary’s webinar on October 3rd with GRC Educators.