Law firm performance can be measured by tracking key performance indicators. These key performance indicators measure a firm’s success versus a set of targets, objectives, or industry peers.
Primary KPIs can be financial, including net profit (or the bottom line, gross profit margin), or revenues minus certain expenses, which measures your firm’s overall profitability.
To measure law firm performance in terms of efficiency and profitability, here are 5 KPIs you should keep measuring:
New Matters Per Month
This one’s pretty straightforward: you can’t sustain if you don’t grow. That’s why most firms set specific quotas for new matters each month.
Closed Matters Per Month
Tracking closed matters per month with a legal management system is important; it can help you identify where you need more resources or support, so you can successfully close cases.
Stalled Matters/Bucket Age
A Stalled matters indicator helps you identify when a case has hit a wall (typically, no movement in 90 days). Whereas bucket age is very specific, it tells you exactly how long a case has been in a particular status. They help with the proper allocation of resources and support.
Task Completion Rate/ Task Age
Task completion rate tells you the number of tasks completed out of the total tasks assigned in a given period, and task age reports the number of days it took to complete a particular task.
These two KPIs give you actionable insight into how you can improve as a firm and process cases faster.
Client Acquisition Cost/Conversion Rate
Client acquisition cost asks, “How much are we spending on sales and marketing to land a new client?” Whereas the conversion rate reports the number of leads converted into intake/matters out of the total number of leads.