5 keys KPI for Lawyers
Measuring KPI has an important role in the success of your business because they help you evaluate specific goals and aspects of your firm. In order to do so, you need to gather data and that could take a lot of time (or at least that is what everyone thinks).
There are hundreds of KPIs you can track inside your business, however, we have gathered what we consider the most important 5 KPIs for your law firm:
1. Marketing
We consider this one of the top ones, there is no money or time to be wasted on Marketing Strategies, there is no better way to measure your ROI (Return on Investment) than analyzing the efficacy of your marketing efforts by studying the KPIs and what you should do to improve it based on your goals.
We dedicated a full post for Marketing Success: 5 metrics you need to track in your Law Firm.
2. Client acquisition KPIs
By measuring your Client Acquisition you have the full power to know what you are doing correctly that gets your leads to become clients and helps you assess the effectiveness and ineffectiveness of your lead conversion.
Consider using some of the following client acquisition KPIs :
- Cost of acquiring a new client
- Number of new cases/matters opened
- Number of new clients
- The number of new clients by source (referral, website, review site, etc.)
- The estimated average value of each new case
- Number of consultation appointments set
- The number of potential new clients who showed up to their consultation appointments
- Number of potential clients converted into clients
3. Client development
When you officially have a new Matter/Client, the most important job of a lawyer is performing an efficient job for your client by resolving the cases effectively. This is how your law firm builds a good reputation that leads to new prospects.
What should you be looking to understand where you stand in Client development? Looking at data like how many cases have been closed, the average value of each of those cases, and the number of matters per client.
This is also an opportunity to review your internal processes and find the gaps where former clients have ended the business relationship for any reason.
4. Client satisfaction
A huge metric that most Law Firms forget to take into account. Knowing your clients’ and former clients' satisfaction is a key metric of success. One of the easiest ways is by client feedback and/or surveys. By integrating this into your off-boarding process it will be easy to never forget to collect reviews and surveys.
You also need to look at your client’s referral numbers, the score from those client’s surveys and reviews, and your client retention rate.
Most of the time we focus on getting new clients when it is equally important to focus on the service you are providing to your current clients.
5. Law firm profitability
Like in any other business, the main goal is always to have profits. You don’t want to exceed the costs over your revenue. To calculate your firm’s net profit margin, you need to determine the total revenue for a specific period of time and subtract the total of the Operating expenses including but not limited to payroll, software, marketing, travel expenses, most commonly known as your Profit and Loss Report.
By knowing the position your firm is in, you can determine if there are opportunities for growth and expansion or if there are some aspects in your business that need to be changed.
Now that we have mentioned the main metrics to track, it is important to mention that everything will be based on your goals, so you have to set your goals and adjust as you see necessary. Make sure to be realistic and precise on those goals and evaluate the KPIs on a monthly basis in order to catch problem areas and rectify and adjust immediately.
If your business needs assistance with process implementation, advisory services, and trust accounting do not hesitate to set up an introductory meeting with our experts to discuss how My Books and Taxes can help you and your business.