4 Law Firm KPI’s to Remain Competitive!
You know what you have to do every day…it’s on the calendar. “Meet with this client”, “meet with that lender”, “train the new co-worker”, “plan with the interior designer”, and at the end of the day, “enter in company expenses” (hopefully you’ve got a dedicated bookkeeper for this by now, ahem…”cough cough”).
Aside from reviewing the weekly and monthly regulars like, the time-tracking sheet, profit and loss, accounts receivable or the revenue vs. income reports (all great by the way and essential)… you may be surprised to learn that there are even more types of reports you could be running that would reveal yet another angle of how your business is doing…AND where you will want it to go.
The Key Performance Indicator or KPI concept has been around for a while, but in case you’ve missed it or need a refresher, KPI’s are simply this: A way to measure performance against key business objectives. For instance, if your objective is to learn about a client’s tendency to bring you lunch whenever you’re hot on the trail, then, by all means put THAT into a database management system (DBMS) for easy extraction and note taking.
Track each case life cycle
Wouldn’t it be great if with a click of a button, you could view every case start date, trial date, discovery deadline, post-hearing brief, settlement date, payment date, and so on? What things about your client / client’s trial would you like to track more effortlessly? How long do certain trials go?
Track Client Profitability
Consider the Customer Lifetime Value (CLV). Which are the cases that value rises as costs increase? Long term client relationships can be beneficial for many reasons. The obvious one would be because a client would likely choose you and your firm again—because they trust you, based on your established professional relationship. Long term clients are also more likely to refer you to friends, family and new contacts in natural conversation. You could even measure your highest CLV on other professional groups your client frequents and is a part of… National Association of Realtors? Academy of Integrative Health & Medicine? Which clients rank higher on your preferred networking ladder? You have the ability to positively help one person, while creating “space” for others to follow.
Track referral sources
Often with the word ‘referral’, people tend to think of their clients first, naturally. Afterall, they are hopefully your number one fan! But, don’t limit yourself to only those you’re serving. Really a referrer can be anyone who: is invested in your prospect (personally or professionally), vendors, business friends, the mailman / woman, anyone who you have an ongoing relationship with that is interested in and gets what you do! Consider creating a referral discount program for those who send you new and committed clients. Using a Net Promoter Score (NPS) survey with a tool like promoter.io also gives you the chance to funnel happy customers to a referral page.
Track Website Page Visits
So you’ve gone to law school, and gotten the degree (….You’re AMAAAAZING!!!) and now you are keeping up with in and out going clients, sharing information on your website and maintaining a strong and consistent online presence. Good job! Now’s the time to reward yourself for all that effort by gaining knowledge of WHO is interested in WHAT! In order to track analytics and use them for your KPI readings, you’ll want to be sure your website pages (and blog topics) are categorized neatly into very specific topics / information. Play with different subjects within your skill-set and let the number crunching do the rest for you. ‘Voila’! You’ve just made a list of your most lucrative clientele.
For more thought provoking business tips and strategies, visit our Facebook group: QB Community Live! that I co-founded with Matthew Fulton. It’s a group where we help other accountants and small business owners.
My firm also specializes in working with Law Firms, Real Estate owners and Start ups. You’ll learn about fresh new tips and tricks, and trending apps like Fathom – which gives you in depth knowledge on choosing the perfect KPI’s for your company. Hope to see you there!