Running a law firm is like running any other business, yet many firms never gather and analyze business data. Still, the operational aspects should be similar to other businesses, like restaurants, online companies and even retail stores. Measuring the right metrics can increase profitability, improve inefficiencies and increase efficiencies. So, do you know the most important metrics to track? Here are three that can be quite useful to identify.
- New leads by case type.
Look over the past 30 days, and see how many new leads have contacted your firm. If leads aren’t coming in at an improving or consistent rate, it’s just a matter of time before your firm shrinks. Also look at your competition to see if you can determine what their lead flow looks like. If they have 50 new leads per month, and your firm is only seeing five, it goes without saying that something needs to change.
- Signups by case type.
While leads are great, make sure they’re translating into good, profitable cases. If leads are up, but signups are declining or static, you have some behind-the-scenes issues. In other words, are people calling you to get information, thanking you and disappearing forever? You need to transform the leads into real clients in order to see a profit. Analyze signups and leads together since both are critical to knowing whether your firm is headed for success or doom.
- Fees by case type.
If your signups and leads are both looking good, but you struggle to get cases to the finish line, you won’t see any profits. Are clients letting you go halfway through their case? Are they deciding against your firm or saying “no” to legal services altogether? Fees, signups and leads are all critical aspects of your firm, and monitoring them together each day may just be one of the most important things you can do.
Just because you’re in the office every day doesn’t necessarily mean you have a good grasp on what’s happening in your firm. If you can successfully gather and report information, whether it’s through a basic Excel spreadsheet or custom case management software, you will ultimately be in better control of your practice.