Top Law Firms Profitability Metrics to Measure for Success
Which Law Firm Profitability Metrics to Measure for Success
There’s an old saying: if you don’t know where you’re going, any road will take you there.
For your business to meet objectives and grow, you need to be precise in identifying your goals as well as what needs to be measured in order to gauge your success in reaching those goals. Key Performance Indicators are measurable numbers and data that provide insight into how successful or not you’ve been in meeting your business goals. In other words, KPIs let you know how your firm is doing and if changes need to be made.
If you want your team to meet certain goals, you have to set those goals and thereby generate accountability. To set these goals accurately, you need to predict realistic performance milestones. To do that, you need to review the right trends over time up to that point. These trends are your KPIs, the beating heart of business intelligence.
Measuring Legal Intake Efficiency
There are certain baseline metrics for evaluating firm success. Certainly, if the number of signed clients has increased year by year, that’s a good sign. It may not tell the complete story, however. If your costs for securing those new clients was greater than the benefit and projected value of those clients, then something needs to be adjusted. It’s easy to get lost in a sea of incomplete, inaccurate or misleading information. Picking the right KPIs to measure and abide by, then, is the most important step in the whole process.
Success for many or most firms is measured by the bottom line and proper marketing is critical in drawing in clients. To measure the effectiveness of marketing efforts, it’s important not to rely on a single KPI. Instead, it is likely to be the interrelation between several KPIs that yields the best analytic and predictive value. Since using all possible performance indicators would overwhelm anyone with mostly irrelevant information, a strategically curated focus on those key indicators provides the most benefit in measuring the health and performance of your business.
For setting law firm marketing strategy, a short term overreaction and over-correction is not a successful path. On the other hand, if you’ve measured the right KPIs and drawn the right conclusions, but fail to implement any actions in a timely manner, you may as well have never had the data in the first place. The human factor is still the crucial one, though the right software puts everything a decision maker needs at their fingertips.
The Right Software
In order to generate more revenue, it’s important to spot and address potential issues in a hasty manner. On the daily level, GrowPath’s Matter Trackers brings issues and areas of low productivity to the attention of relevant team members. A Timeline header gives all employees a current breakdown of cases by type and status.
GrowPath’s software offers lightning-fast retrieval of the data you’re searching for, whether you’re in the office or working from home. Decide which types of reports would actually be helpful to you, and generate them in seconds. On a broader level, you might want to know which marketing channel is triggering most of your leads — and that report can be pulled up in an instant. Or you might have a more immediate concern: Are you overworking your paralegals? Run a gravity report and assess the workflow distribution.
Have you emailed back the Johnson family with an update on their case? Actually, you wouldn’t need to pull up a search on that one. If you had neglected to follow up on the Johnson case, your customized dashboard would have already alerted you. With GrowPath, it’s worry-free case management.
Reports: Limitless Business Intelligence and Insight
When you manage a team’s workload, you have to manage performance and fairness. You also need to balance long term versus short term interests. In juggling multiple people and concerns, significant attention must be devoted to how time is scheduled and how work is shared.
Being diligent about managing staff properly means having access to updated information on everybody’s tasks and current workload. Of course, productivity is not simply a matter of hours worked, which is why GrowPath’s reports can be tailored and configured to give you the data you most need. In this way, employees can know that a concerted and sincere effort is being made to ensure that everyone on the team is contributing their fair share.
Naturally, there’s a virtually endless list of things that need monitoring: How quickly are your cases closing? Which attorney should be rewarded for going above and beyond? Which departments have completed their cybersecurity training requirements? Whatever you need to discover, report calculations and combinations are limited only by your imagination:
From client data to firm analytics, easily search and access key information from anywhere.
Monitor and manage your cases and data from one intuitive dashboard. Cases needing your attention are highlighted in red, prompting you to intervene and drive those cases forward.
The essence of business intelligence. Where are your dollars going and are they being maximized? Use hard numbers to guide your overall business model.
Superior Analytical Tools
The big picture. The small details. On-site or on the go. With GrowPath, you make better business decisions and monitor your firm according to your preferences.
Case Management and Intake Key Performance Indicators
A brand can’t be built overnight. Effective marketing means trying new things and measuring the variables. Without measurement, methodical trial and error becomes aimless flailing. The right software allows you to remain a marketing student at heart, drilling down to the tiniest detail to identify both positives and negatives over time in your current marketing spend.
So what sorts of reports should you be pulling up? To assist you in choosing the most useful KPIs, GrowPath has assembled two short guides for you to download and implement. The guides discuss how to trigger and maintain satisfying growth in your firm or law office. Both were written by Jim Farrin, who draws on over 20 years of towering success with his Durham-based plaintiffs? firm, The Law Offices of James Scott Farrin.
A Comprehensive Plan
Knowing which metrics to measure is only part of the battle. One related question that commonly arises is how much of the firm’s budget to actually spend on advertising. You might have heard different numbers: five percent of your budget? fifteen percent?
Whatever you decide, how you spend the amount matters as much as the amount itself. In a saturated market, for example, you may want to differentiate your services by the time of day when your ad airs. Fewer dollars spent in a growing market might be much more effective than spending more in a highly competitive and established market.
The secret to marketing is that there is no secret to marketing; with all of the ongoing changes in a rapidly evolving world, trial and error is the safest best. If you’re not testing everything, you are likely not maximizing your spend. Is social media the right avenue for your campaign? Is it old school radio or is a multi-channel approach best? As you experiment, let GrowPath illuminate you on the effects and results of your marketing efforts.
Facing the Future with GrowPath
Technology and new developments are friends in your quest to save time and increase revenue. For instance, automating elements of your marketing effort is the sort of improvement you can make to have your marketing dollar go further. This should complement a broader venture to run your law firm more like a business.