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LawKPIs Guide to Success: Your KPIs at a Glance

Your law firm’s success hinges on its ability to navigate a complex landscape, make informed decisions, and drive growth. Central to this endeavor are Key Performance Indicators (KPIs) – metrics that keep your practice running smoothly and profitably. Yet, no single KPI can encompass all your firm’s needs or unveil every opportunity for growth. That’s why LawKPIs gives you an assortment of important law firm specific KPIs on day one. And the software is so easy to use, you can customize and share information and reports throughout your entire practice.

Get Immediate Insights

Unlike other business intelligence solutions that require months of setup to tailor metrics and KPIs to your practice, LawKPIs offers immediate insights effortlessly. Built specifically for law firms, our system provides actionable data right out of the box, saving you valuable time and resources.

See why so many firms trust LawKPIs to keep their businesses on track.

Here are just a few of the many KPIs you’ll be tracking out of the box with LawKPIs.

Attorney Utilization Rate

Utilization rate is the most basic way to understand a lawyer’s productivity. It measures how much time is spent on work that is billable to clients. It is generally expressed as the percentage of total time worked that is billable.

For example, if an attorney works 2,080 hours in a year and bills 1,040 hours of time, their utilization rate is 50%. That means that 50% of their time was spent on work that is billable to clients.

All attorneys spend time on work that isn’t billable — administration, business development, team building, work referrals and other activities around the coffee station. But the higher your utilization rate, the higher your overall firm profitability will be in relationship to your salaries and disbursements.

Proper tracking of utilization rates help you uncover which attorneys are using their time most effectively, opportunities for improving efficiency by outsourcing administrative tasks, helping your attorneys stay on top of their time tracking reports and more.

Revenue and Billable Hours Per Employee

Billable hours are any hours you spend that can be accounted for toward your client revenue. Another way to gauge the productivity of your firm is to look at revenue totals and billable hours per employee for a given time period. While attorney utilization rates look at the percentage of time an attorney spends that is billable, this KPI shows you the total amount of revenue and hours billed regardless of the unbilled time spent.

Some firms set targets for revenue and hours billed per employee by week, month and year. According to a recent study by the National Association for Legal Professionals, the average attorney bills 1,892 hours per year.

Revenue Per Matter

The matters — or cases — that your firm works are where you actually make your income. Typically, each matter is quite unique in terms of its own budget, fee schedule, hours billed and profitability.

Analyzing revenue per matter can give you a better understanding of the types of case work that are the most profitable and drive the most income for your firm. That in turn allows you to profile new clients that have the highest potential for success for your practice areas.

Revenue Per Practice Area

Each of your practice areas is unique. Tracking revenue by each practice area can be challenging for some firms. LawKPIs makes it easy to determine the percentage of revenue for all of your practice areas in a single report that can be shared with the appropriate reviewers in your firm.

This is helpful for determining which practice areas generate the most revenue. It also help you determine and share best practices across your practice areas based on real data.

Revenue by Attorneys

By analyzing revenue by attorney, you can determine how much income each attorney has brought into your firm. By comparing attorneys and also visualizing averages across your firm and in each practice area, you can identify areas for improvement.

Some firms set a minimum bar — say $500,000 per attorney — and then overlay the actual revenue per attorney over other KPIs such as utilization rate and billable hours to help improve the growth of their firm.

It’s important to find out as early as possible if an attorney is coming up short on their revenue goals so you can step in to give them assistance and make them more successful:

How many hours have they been billed compared to their peers?

What is their utilization percentage of hours?

Is your support staff overworked so some attorneys are doing too much simple administrative work?

Is revenue per matter too low in certain areas?

Does the attorney need help in converting consultative meetings?

Outstanding Fees by Clients

How quickly your client pays is the most important determinant of the health of your cash flow. The best way to avoid ongoing collection issues and maintain client relationships is to stay on top of outstanding balances and not let them grow in days or total amount.

Staying on top of your outstanding fees by client allows you to be proactive in working with clients that face payment issues. Stepping in early to review any questions or disputes not only improves your cash flow but helps with client relations and retention.

Lead Source Conversion Rate

Most law firms have many different lead sources for new clients.

Referrals from other firms.

Public speaking.

Email marketing.

Search marketing, SEO, and pay-per-click advertising.

Events.

Other advertising, mail, and phone.

In an ideal world, all leads would result in new business. But in reality, different types of leads from different types of marketing initiatives convert at different rates.

It is important to stay on top of your lead conversion rates to know the best places to invest your marketing funds. Just because a marketing campaign generated hundreds of leads doesn’t mean it is your most successful effort. Tracking conversion rates by lead source allows you to be nimble in your marketing spend and grow faster.

Matter Type Conversion Rate

While lead conversion rates help you determine the best places to spend your marketing dollars and source new business, matter conversion rates can help you understand the effectiveness of your consultations and highlight improvements in your client’s journey to success.

Attorney New Business Generation

It’s a fact of life in every law firm that some attorneys are better at generating new business than others. Some are able to rely on a larger network of friends, colleagues, partners, and current clients for referrals. Some have established themselves as thought leaders in the communities and industries that they serve. Others just flat out work hard at driving new business.

By keeping track of how much new business each attorney generates, you can help to spread best practices across your firm and encourage successful attorneys to mentor younger attorneys for the overall growth of your practice.

New Clients Through Referrals

Every person you meet is a potential referral source. It is usually the case that many of your best clients come from referrals from other happy clients and colleagues. Staying on top of your new clients through referrals helps you track the overall health of your practice growth and also highlights referrals sources that deserve some extra attention and nurturing.

Client Retention Rate.

Did you know that it can cost five times as much to find and convert a new client as it does to generate the same amount of business from a current client? You invest so much time and resources in creating new business for your firm, but if you don’t keep those clients, you might just be treading water.

In addition to improving profitability, keeping an eye on client retention rates across your practice areas and attorneys can help you identify areas for improvement in multiple areas.

Where can you streamline your workflow to spend more time on what matters most to your clients?

Do clients see some areas of service as inherently more valuable than others?

Are some attorneys simply more client-centric than others?

What areas are cultivating the longest client relationships and how do you attract more of those clients?

Website Visitors

Your website is your first and most important representative from your firm that most prospective clients meet. Tracking visitors is essential for your law firm so that you can measure the overall performance of your digital marketing efforts. Any firm, regardless of size and traffic volume, can improve their marketing by raising the awareness of their website visitors.

Tracking visitors makes it easy for your marketing team and webmasters to optimize your site to convert visitors into leads. It also helps you determine what the most valuable parts of your site are and where you should invest in future content.

LawKPIs is integrated to Google Analytics. Unless you have a degree in interactive marketing, Google Analytics may not be the easiest tool for most law firms to use. We’ve made it easy to quickly analyze what is most important to you in your web traffic with integrated dashboards right out of the box.

SEO Placement Revenue Year Over Year Comparison

How quickly can you perform a comparison of year-over-year (YOY) revenue growth? Knowing your YOY growth rate keeps you in charge of your financial health and in a better position for making any necessary strategic adjustments.

YOY revenue compares your revenue from the previous year with that of the current year to see how much you have grown in that time period. It helps you identify new areas for growth and change. It is one of the most important indicators of success in your business and can help you attract new partners, employees, and clients. It can also help you put other larger trends like seasonality, market fluctuations and industry changes into context.

Search engine optimization (SEO) has become one of the most important marketing techniques for law firms. Because the legal industry is so competitive, law firms are spending more and more of their marketing dollars trying to gain the top spot-on Google and other search engines.

Getting real-time information on your search positions can help you make adjustments in your web and content strategies that will drive new business with the right keywords and data comparisons.

Download the LawKPIs ultimate guide to Law Firms KPI absolutely FREE here. 

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