Tracking key performance indicators (KPIs) can sound intimidating, but it doesn’t have to be. We break it down into something manageable and useful so that you can start tracking the most important metrics today.
There is an overwhelming number of KPIs your firm can track, but not all of them will apply to your firm or practice area. For example, a contingency firm running mass tort cases will track different KPIs than a personal injury firm with a high volume of motor vehicle accidents. It’s important to pick the KPIs that will have the most impact on the health and growth of your business.
3 main categories for law firm KPIs
Most KPIs for law firms will fall into three categories: financial, operational, and client-related.
Financial KPIs measure the financial health of your practice, including total revenue and revenue growth, expenses, and profit margin. Examples of financial KPIs include total expenses as a percent of revenue, cost per lead, cost per acquisition, and average revenue per case.
Operational KPIs measure the efficiency and effectiveness of your firm’s processes, including things like time to resolution, average case duration, and staff productivity.
Client-related KPIs measure the quality of your firm’s client experience, including client satisfaction rate, client acquisition cost, client retention rate, and referral rate.
As you can see, there are a lot of potential KPIs to track. Rather than trying to track all of these metrics at once, focus on the KPIs that will give you the most insight into the health and growth of your firm.
5 impactful KPIs for law firms
Here are a few of the most important KPIs to track for a typical personal injury practice:
1. New cases opened
Track the number of new cases opened over time to understand the growth trajectory of your business and where you should expect your revenue to trend. Segmenting new cases by case type, referring attorney, or advertising source can provide further insights.
2. Staff productivity
Staff productivity metrics, like the ratio of cases or revenue to attorney or staff, can help you understand how well your team is performing and highlight opportunities to improve efficiency.
3. Case or staff cost
Tracking the cost per case or per staff member can help you understand whether you need to adjust your staffing model or outsource activities that can be performed more cost-effectively by third-party vendors.
4. Marketing effectiveness
Tracking where your cases come from and how much it costs to acquire each client will help you understand which marketing channels are delivering the highest-quality clients at the lowest cost.
5. Client satisfaction
Measuring client satisfaction over time can help you identify areas for improvement in your client experience, and a high Net Promoter Score (NPS) can be a leading indicator of increased referrals.
Tracking KPIs in your case management system
The best way to track these important metrics is to take advantage of analytics and reporting tools that are built into your case management system. Neos, for example, has a robust and customizable analytics and reporting suite that provides out-of-the-box insights into practice performance.
With these dashboards, your firm’s leadership can:
- Understand the “temperature” of the firm at a glance by viewing real-time data on new case activity, the status of all open cases, and other critical metrics.
- Drill down into cases by type, staff member, or date range to identify bottlenecks or performance issues.
- Track financial data, including costs and payments, to ensure all cases are on track for an efficient resolution.
With the right KPIs in place and a powerful analytics tool to track them, your firm can continuously improve its performance and grow more efficiently.
Schedule a Neos demo today to learn more about how Assembly’s analytics and reporting tools can help you track and improve your firm’s most important metrics.
