Law firm leaders get performance information at the their finger tips

by PracticeLeague

The business environment has become increasingly complex, competitive and dynamic for law firms. They need to adapt and align themselves to the fast changing realities of the business environment. Law firms can no longer be complacent about performance of their lawyers or the financial health of the law firm. Likewise law firms need to respond with strategic decisions that make the most of the opportunities and address the challenges.

To be able to do this law firms need accurate information about the various performance parameters of the firm. An excample of this would be that in a recessionary market, the average effective hourly rate would be a good indicator of how well the firm is responding to the current economic scenario. Another indicator would be the increase or decrease in the number of billable hours per partner. Or for example, your firm has a strategic focus on specific client relationships then your firm the firm would nedd information on the breadth of the relationship. So the following indicators would help:

Bullet The number of matters per client as an indicator of growth in the client relationship;
Bullet The number of practice areas that serve these clients as an indicator of cross-selling success; and
Bullet The number of lawyers with time on matters connected to this client, as it measures the breadth and depth of the relationships between your firm and the client

Such performance indicators can provide law firm management with the information necessary to make informed decisions and adjust direction to meet the goals and objectives of the firm. They could also enable a firm to motivate their lawyers to focus their efforts in certain areas that are critical to the firms success in a given context. Such indicators, also known as Key Performance Indicators (KPIs), need to be first defined for the law firm in question.

KPIs can be many and a law firm needs to choose KPIs that best reflect its business scenario.

A few examples of these are mentioned below:

Financial KPIs

Bullet Billing per month versus their history, versus firm average
Bullet Fees received in month
Bullet Work In Progress - WIP
Bullet Fees past 30 days overdue

Marketing KPIs

Bullet Leads obtained from own activity
Bullet Total leads handled
Bullet Conversion rate versus their history versus firm’s average
Bullet Leads from recommendation

Customer care KPIs

Bullet Legal Complaint Service complaints
Bullet Client testimonials

Once KPIs are defined, Information Technology can play a critical role in creating the platform and system that gathers this information and delivers it to the decision makers in the firm, in an ‘easy to understand’ and ‘easy to act on’ way. In Information Technology parlance these are called dashboards. A dashboard is a snapshot, presented in graphical form, of important indicators from your financial statements and related reports that makes information from a variety of sources readily accessible to management.

This kind of intelligent information is beyond the scope of spreadsheets or computerized accounting and billing systems, that most law firms use.

Law firms will need to reconsider their approach to IT and deploy integrated information technology systems that generate and present this kind of information for quick and responsive decision making and actions.

Uberall’s Law Practice Solution provides real-time Dashboard dashboards, analytics and ready reports that provide complete insight of their law practice at their fingertips. Partners, Senior associates and Team Leaders can now track and monitor productivity for all their matters, resources and clients across all their offices.

Ready Analytics provide greater details of every dimension of the firm functions including Billing, Realization & Outstanding, WIP, Productivity, Performances and Finance.

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