A lifeblood of any legal practice in a competitive environment is analysing their KPI’s (Key Performance Indicators) on a weekly, monthly and quarterly basis. This allows the ability to set budgets and measure against growth forecasts.
Make sure your system is capable
If you wish to be a successful law firm for the long term, you’ve got to identify, measure, benchmark, and act upon these key metrics.
You can’t measure what you don’t track. The first step in establishing your KPIs is looking at the data you already have available in your firm’s practice management system. Make an inventory of the data being collected and determine if there are any holes between what you have and what you need. If the firm is using a whole practice management system that is integrated across departments and work areas, then pulling in figures is a streamlined process.
What does success look like?
Long-term success is not just profit per partner. Clients have more choices, and many are following the do-it-yourself trend for legal services. Measuring client satisfaction is a new concept for the legal industry but knowing what you can improve upon based on solid feedback is mission-critical to business success today.
Ultimately, cash is king. Businesses and law firms alike fail because they pay out more than they bring in. Measuring more than the metrics associated with the traditional billable hour will help your firm better understand its current and potential monetary situation.