What cannot be measured cannot be controlled; what cannot be controlled, cannot be managed; what cannot be managed, cannot be improved (Peter Drucker’s famous phrase). This rule applies to all businesses without exception.
Monitoring performance has a great impact on your company’s revenue, growth and positioning, but to be successful, in a context as changing as ours, we must evolve against what is measured and how it is measured.
Defining specific KPIs for your law firm and your business model will allow you to make informed decisions based on data. I see with great concern the high level of improvisation in our sector in the planning and execution of marketing strategies. Not having a concrete plan is like shooting with your eyes covered.
KPI stands for Key Performance Indicators. Words plus words minus are metrics to evaluate performance. KPIs must be measurable, specific and focused on achieving a specific objective.
Defining the metrics well will depend on the specific objectives that we set ourselves (never start shooting without aiming, planning is vital). For example, achieve an increase in turnover by 2021 of 30%, grow our contact base on LinkedIn by 50%, position ourselves as a leading firm in labor law, etc. Once we have defined these specific objectives, we proceed to identify the specific KPIs.
This will allow us to identify in time if we are on the right path and if not, take corrective measures, identify the team members responsible for achieving the objectives, times and deadlines, analyze the data and make informed decisions based on in fact and not in hypothesis.
Let’s now look at some KPIs that apply to the legal services business. This helps to ground the concept and is a good guide to implement specific cases in our organization. Be careful, each of the KPIs must be analyzed case by case and in its proper context. Each firm is different, has an internal structure and a particular form of management, and, therefore, there is no one size fits all.
Financial KPIs – The most relevant metrics. They should be monitored periodically to identify opportunities and gaps. Some examples: monthly income, hours billed, billing by practice area, debt, costs, billing by type of service, profit margin, billing by attorney.
Marketing KPIs – Essential to measure return on investment. Some examples: conversion rate, new customers, traffic of our website, most visited sections of our website, number of new followers on social networks, number of fee proposals sent, number of proposals accepted and rejected.
Customer Satisfaction KPIs – If we want objective data and information versus customer satisfaction, we must adopt a scoring methodology. Some examples: satisfaction survey score, new customers referred by current customers, customer retention rate.
Remember that not all KPIs are useful for your company. Trying to measure all available performance indicators is unnecessarily overwhelming and counterproductive. Focus on the KPIs that measure your specific goals and keep in mind that information and data are power.