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June 8, 2022

Leading the Way: The Business of Law in 2022 and Beyond – Part 3

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Lead the Way with Key Performance Indicators

About the Leading the Way Series

“Leading the Way: The Business of Law in 2022 & Beyond” from SurePoint Technologies is a series focused on the competitive advantages of mid-size law firms. In this eight-part series, we will examine how the pandemic accelerated changes and created a much-needed paradigm shift in the legal industry. In our last post, we examined how firms are using legal technology to meet evolving client expectations. This time, we’re looking at how firms can measure their success using key performance indicators (KPIs). 

Measure Your Firm’s Success with Key Performance Indicators

In recent years, the term KPI has been used a great deal in the business world, and for good reason. KPIs are the benchmarks you use to determine how successful your organization is and what steps you need to take to meet your goals.

Forward-thinking law firms embrace KPIs as an essential tool in their overall growth strategy, recognizing that KPIs are important for understanding and analyzing the firm’s overall health. Law firm leaders understand that the data from KPIs can help address issues in their firm so they can adjust to create a more client-centric experience.

When it comes to KPIs, there isn’t a one-size-fits-all answer. The metrics that matter to you might differ from other law firms, so it’s good to understand how you’ll use them and why you should spend some time on them.

Why Your KPIs Matter

Traditionally, law firms have focused on two related metrics when assessing their overall health:

  • How much money they’re earning (Revenue)
  • How many billable hours they’re producing (Total Billable Hours)

That information is valuable, but it doesn’t provide the complete picture. You may still not know:

  • Are your clients satisfied?
  • Are you meeting your clients’ expectations?
  • Which clients may potentially go to another firm?
  • Which marketing strategies work best?
  • Which clients are your most profitable?
  • How many leads are converting into clients?
  • Are you bringing in enough new clients to offset churn or grow your practice?
  • Are you effectively collecting on revenue billed monthly?
  • How do you need to evolve your practice areas to remain competitive?
  • Which practice areas are most profitable and which ones need to be re-evaluated?

Information based on the above questions can be used to set a path forward, relying on facts and figures, not on gut feeling. When you know which marketing strategies work, you know where to invest.

When you have information on how many new clients engage the firm, you know if you need to focus additional resources on bringing in new leads as well as develop strategies to revitalize practice areas or create new ones.

Your KPIs are important because they enable you to identify what’s important to your firm, so you can track and measure those metrics and take necessary action.

Law Firm KPIs

There are endless options for setting your KPIs. Ideally, they’ll be tied to your firm’s goals. If your goal is to bring in ten new clients a month, your KPIs should revolve around the number of new clients coming in each month and which initiatives are successful at bringing them to the firm.

If your goal is client retention, you’ll need information on which clients are staying and which may be thinking about moving to other firms. You’ll also need to look at when and why they leave so you can take the necessary action.

It’s easier to track KPIs based on data you already have available in your firm’s practice management system. You can also measure areas such as:

  • Client satisfaction
  • Employee satisfaction
  • Monthly expenses
  • Website traffic
  • Cost of acquiring a new client
  • Number of consultation appointments set
  • Number of matters per client
  • Client retention rates
  • Number of client referrals
  • Realization rate
  • Collection rate

And you can measure individual performance KPIs, such as

  • Average bill rate
  • Percentage of partner hours
  • Number of matters opened
  • Number of tasks completed

While the list above represents some of the KPIs that can be measured, some firms use a “profitability accounting analysis” to measure their performance. The methodology is outlined here.  

How to Measure Your KPIs

If this sounds like a lot to measure, technology like client relationship management (CRM) can help you. As both a platform and a strategy, CRM takes relationship and contact information from your firm, so you can understand the relationships that exist and leverage them to generate new business.

You can use your CRM to create reports that show how you’re doing relative to your KPIs. You can then take that information and decide what actions you’ll need to take to meet your KPIs, ensuring that your actions are aligned with your law firm’s goals.

Once your system is appropriately set up, set aside time to regularly review the results, look for patterns, and develop a plan to adjust.

You can also use your financial and billing system to understand the return on investment (ROI) for business development. The integration of CRM with financial data gives law firms the ability to better communicate with clients and prospects and understand more aspects of client relationships.

Managing Expectations

Your KPIs must be realistically based on your firm’s capabilities. It may be tempting to go after significant changes, but small adjustments made over time can also transform a law firm. Pick a few metrics that make sense to your firm, ensure your staff is on board with them, and test the system by tracking those KPIs and adjusting. Once you’re used to the process, you can continue with more.

Don’t Wait to Take Action

The great thing about KPIs is that action can be taken quickly to address issues or threats to your firm. When you have the information available to you, you can take action right away rather than waiting until it’s too late. A robust CRM integrated with your financial and practice management system can give you the data you need to ensure your law firm prioritizes its most profitable matters. To learn how implementing financial intelligence gives firms a competitive advantage, download our free report here.

Are You Ready to Lead the Way?

Schedule a demo to learn more about how mid-size firms are leading the way, finding their competitive advantage, and unlocking higher performance with SurePoint.

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 nationwide. Its distinctive cloud platform integrates 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