Our own Mary Juetten had the opportunity to present a talk on key performance indicators at the recent Law Launcher virtual conference. Here are some of the highlights of that talk.
Most businesses still use the billable hour as the baseline for their work, but when it comes to law firms, too few are using key performance indicators to track their measureables. Law firms might not see themselves as businesses, but whether they like it or not, they are. And as a business, they need to track their KPIs themselves or get someone to do it for them, because knowing how your firm is performing beyond simply the billable hour is the difference between success and failure.
A focus solely on the billable hour is a narrow and short-sighted view of your firm’s overall health. The number of billable hours is irrelevant if you aren’t collecting on those hours efficiently. And if your firm’s focus isn’t aligned with those of your associates, it can result in a misunderstanding of goals and targets. Meeting goals shouldn’t come at the expense of honest reporting and timekeeping, however; you want an accurate reflection of your associates’ metrics, even if it means that they aren’t exactly hitting the targets set forth. Simply relying on how much you have in your firm’s bank account means you aren’t properly measuring the profitablility of your firm when balancing the inputs and outputs.
Net promoter score is an important tool to understand how you are performing with clients. Given the competitiveness of the legal marketplace, it can’t be assumed that a client is necessarily a satisfied one. Reaching out to customers for honest, specific feedback is a good way to understand what you’re doing well and what you’re not doing well, and allows you to work on the latter before it costs you clients. Ultimately, you want happy clients, because happy clients pay their bill sooner, will use your services again, and are more likely to refer business to you.
To learn more about KPIs, you can watch Mary’s Law Launcher presentation below and read her writing on KPIS at Thomson Reuters Legal Executive Institute.