Law Firm Dashboards 101: Make Informed Decisions with Real-Time Data

Imagine driving a car without a dashboard. How would you know what speed you were doing? How would you know how much gas you had remaining? What would you do without the check engine light, low tire pressure light, or any of the other warning lights? You cannot drive your vehicle by just using the dashboard, but it makes it easier.

Law firm dashboards are similar; they are an aid to managing and decision-making in a law firm but not the only tool that should be used.

You may not be ready to do away with all the reports that you run monthly, but you may be able to reduce the number and size of the reports. Hopefully, your law firm accounting software allows you to manage reports and gives you the ability to easily create dashboards.

The major difference between a dashboard and a report is reports are static documents that show what has happened and dashboards are dynamic and present live data.

What is a Dashboard?

A dashboard provides, on one screen, important information relevant to you as an individual and your business. This information is presented visually in an easy-to-read format. The dashboard will show in real-time the successes and issues which will assist the stakeholders in making informed decisions more quickly. It tracks, analyzes, and displays key performance indicators (KPIs), metrics, and data points.

Knowing what a dashboard is, is the first step. The next step is to consider and understand what information you will include in your dashboard. Your law firm accounting software should allow you access to all pertinent accounting and billing data. The goal of dashboards is to provide individuals and or groups with data most relevant to them. That data could be key performance indicators (KPIs), metrics, and data points.

Let us look at what KPIs, metrics, and data points are.

What are Key Performance Indicators (KPIs)?

KPIs are measurable indicators of progress that show how a company is doing relative to its key business objectives. According to Bernard Marr, a world-renowned futurist, influencer, and thought leader in the field of business and technology, “In simple terms, KPIs for law firms provide a way to measure how well companies, business units, projects or individuals are performing in relation to their strategic goals and objectives.” As a firm’s goals change so should its KPIs. Because of this, KPIs often relate to a specific period.

Now that you know what a KPI is, what about metrics and data points?

What is a Metric?

A metric is a quantifiable measure used to track the progress and success of a certain process or area of your business. Billable hours, monthly billings, revenue growth, utilization rates, and realization rates are all examples of metrics. Metrics are important because they include a large area of trackable data.

According to Ben Olmos in an article on Azcentral.com, “the primary difference between a KPI and a metric is that a KPI explains what is being measured, while a metric is the numeric value of the measure itself.”

What is a Data Point?

A data point is a discrete unit of information. In contrast to metrics and KPIs, a data point is any single fact. “Total Cash Receipts” is a data point whereas “Revenue Growth” is a metric.

So, to recap, dashboards can show data points, metrics, and KPIs. However, creating dashboards for each of the KPIs, metrics, and data points that you currently track would be very difficult and overwhelming. You will therefore need to spend time deciding what information you want to display on a dashboard. The best practices, as set forth below, will help you in deciding what data to include.

Some Best Practices for Designing a Dashboard

• Know your audience – audiences will often differ for each dashboard. What are their goals? What are their pain points?
• Get feedback from users on what they want – what data is important to them?
• Set objectives for the dashboard – how will they use the data in the dashboard?
• Customize views for the user – dashboards can be user specific to ensure their objectives are met.
• Place items in order of importance – people read left to right. The more important information should be on the left.
• Ensure accuracy – your dashboard presents real-time information from your legal billing software so be sure that information is entered timely.
• Figure out the best visualization tool to use – workflow summaries, heatmaps, charts and graphs, and lists are some of the tools that you can include in your dashboard.

What Makes a Good Dashboard?

• Must be able to summarize activity with appealing and easy-to-understand visuals.
• Visuals need to be simple; you do not want your users to spend unnecessary time examining the dashboard screen to get the information they need.
• Data must be in real-time.
• Data should be easy to access. Think again of the “dashboard” on your car – you can quickly glance at it and get a lot of important information.

Benefits of a Good Dashboard

• Having access to transparent and dynamic data.
• Users must have confidence in the data they are reviewing.
• Real-time data that can be filtered and examined in different ways will allow for better decision-making.
• A good dashboard should provide accountability for those areas where improvement is needed and allow users to easily track their areas of success.

Conclusion

This blog has merely skimmed the surface of the importance of using dashboards to track KPIs and metrics. Many of you are likely already doing this manually with reports generated by your law firm accounting software but, if you are not using dashboards to present and manage at least some of that data, you are probably not getting the full picture.

The goal of your dashboards should be to assist users digest information that is important to them. Hopefully, with the information in this blog and help from your legal software vendor, you will have the basics to start putting together some dashboards for yourself.

This blog post was originally published on April 20, 2021. Coyote Analytics empowers legal professionals to better serve their clients and optimize profitability while working at any time and from anywhere. To learn more, visit https://surepoint.com/solutions-overview/coyote-analytics/.

About SurePoint Technologies

SurePoint® Technologies is the leading provider of award-winning enterprise software that improves workflow and maximizes financial performance and profitability for law firms. SurePoint’s solutions integrate client management, practice management, and financial management for powerful relationship-building and knowledge-sharing capability. With a community of more than 100,000 members, SurePoint continues to transform the legal industry by enabling law firms to unlock higher performance, freeing lawyers of administrative burdens so they can spend more time focusing on their clients and their practices.

Learn more at https://surepoint.com.