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You can have plenty of clients, unparalleled courtroom success, a stellar reputation -- and your firm can still go belly up. That's because running a law firm requires business skills on top of your legal ones. And many lawyers simply don't know how to tell if their business is doing well or not.
Enter KPIs, or "key performance indicators," signposts that can help you know whether your firm is thriving or diving. You're already familiar with the one that almost all firms use, the number of hours billed. But smart, successful firms need more than just one metric to measure their success.
Let KPIs Lead You to Greater Success
We know, you became a lawyer and not an accountant for a reason. But if you're managing a small or solo practice, you need to be able to evaluate your success and your shortcomings. Even if you outsource your "administrative" work to a bookkeeper or accountant, you'll still need to understand how your business is doing, and that means understanding KPIs.
Thankfully, you don't have to go to business school to understand KPIs. "Small Law Firm KPIs: How to Measure Your Way to Greater Profits," published by Thomson Reuters, can teach you the basics and more, providing straightforward guidance on performance metrics, how to collect them, and what they mean. (Disclosure: Thomson Reuters is FindLaw's parent company.)
Essential Small Firm KPIs
"Small Firm KPIs" presents a "deep dive" into seven essential small firm performance indicators. These are:
1. Client Development
2. Cost of Client Acquisition
6. Client Experience
7. Firm Culture
With this resource, you'll have a clear guide to how to measure, track, and act on these KPIs, allowing you to "measure your way to greater profits." After all, as the book's author Mary Juetten writes, "KPI knowledge is the power to make informed business decisions for your practice. Ultimately, you are providing valuable services to your clients; therefore, it's critical to measure and monitor your client satisfaction in addition to the cash received."