This document discusses business basics and key performance indicators (KPIs) for law firms. It notes that law firms are businesses that must focus on accounting, cash flow, and client experience in addition to legal work. The document recommends that firms establish KPIs to measure outputs, client satisfaction, and collections rather than just hours billed. It provides examples of KPIs like billable hours collected, accounts receivable, and net promoter scores. The document advocates for the use of technology to improve workflow and metrics. It stresses that firms should regularly review KPIs on a dashboard and make adjustments to targets, resources, and technology based on data.

1. Mary Juetten Business Basics
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2. 2Mary Juetten Sept 29, 2016
Agenda
What are after Law School Aspirations? – solo, small, large, tech, other?
Business Basics
Start with Clients
Technology
Questions

3. Business Basics
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4. 4Mary Juetten Sept 29, 2016
BUSINESS 101
Law firms are businesses regardless
of size
Accounting, payroll, KPIs are in
addition to the practice of law & can
be overwhelming for small law
Outsource or use technology
KPIs are for all size firms & big firms
will appreciate business savvy
Big Law: more zeros and support but
still a business & appreciate
business acumen

5. 5Mary Juetten Sept 29, 2016
CASH | CLIENT
Number one reason for business
failure is lack of cash flow.
Cash is King
Clients bring cash & repeat business
Develop KPIs that support positive
client experience and collections.
Don’t dwell on billing; focus on
happy clients and collections.
Use the KPI data for creating pricing
and billing models.

6. 6Mary Juetten Sept 29, 2016
Thomson Reuters Small Law Firm KPI and
Benchmark Survey
Participants:
• 690 surveys sent out to customer panel June 2016
• 62 Firms Responded: 10 Solos & 50% under 10 Attorneys
Stats:
• 81% use technology
• 58% do NOT use KPIs beyond traditional billable hours
• Only 6 or <10% use more than 4 KPIs
• 19 use Collected Billings by Attorney
• 15 measure overdue Accounts Receivable (A/R)
• 14 track Matter Profitability
• 3 measure client satisfaction (less than 5%)

7. 7Mary Juetten Sept 29, 2016
SOLO | SMALL
58 responses to TR Survey, 31 firms
reported using either of the two
profitability metrics:
Take-home dollars
Bank Balance
KPIs need to be timely to allow for
corrective action.
Matter profitability was an option
for responses.
Large firms are now using KPIs but
still slow to adopt.

8. 8Mary Juetten Sept 29, 2016
USE KPIs
Key Performance Indicators are
metrics for measuring all aspects of
business and are beyond the
traditional billable hour.
Law can borrow from other
professional services and industries
for KPIs.
Focus on outputs, client
experience, collections rather than
inputs such as hours billed.
Also RECORD EVERYTHING
otherwise cannot judge budget
versus actual.

9. 9Mary Juetten Sept 29, 2016
PEFORMANCE KPI: Misplaced Focus on Billable Hours.
Allan focused on billing, not collecting
At the end of the year, Allan was a billing machine at
116.25% utilization but 86.22% collected.
For one month he was at 88% using Billings Collected KPI
Align your KPIs with firm goals: Cash is King.
Have timekeeper’s focus on collections, not billing. 160
hours does not matter if only 120 hours are collected.

10. Start with Clients
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11. 11Mary Juetten Sept 29, 2016
Focus on Clients
Value of delivery
Transparency
Alternative Fees
Client Input & Feedback

12. 12Mary Juetten Sept 29, 2016
CLIENT EXPERIENCE: Net Promoter Score (NPS)
Net Promoter Score (NPS) (%)
The percentage of total clients responding to the survey question who
are promoters less the percentage of total clients responding who are
detractors.
Q: On a scale of one to ten (with one being not at all likely and ten being
extremely likely), how likely are they are to recommend your firm to
their friends, family, and colleagues?
Survey must be tracked, not anonymous.
Technology:
Google Documents or Survey Monkey.
Set up Excel for responses.

13. 13Mary Juetten Sept 29, 2016
Focus on Collections
Profitability on paper only if you never
collect the cash.
Stats show that small law firms collect
cash from 90 to 150 days after recording
the hours.
If you have to pay all your bills within 30
to 60 days, you have a problem.
Focus on lowering the days that your cash
is ”locked up.”
Important to calculate lock-up days for
both WIP and A/R.
Check on percentage of ”old” A/R.
Deeper dive depending on results.

14. Options for Workflow
Use Technology: Be Early Adopter
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15. 15Mary Juetten Sept 29, 2016
Workflow
Client Development
Cost of Client Acquisition
Productivity
Profitability
Performance
Client Experience
Firm Culture

16. 16Mary Juetten Sept 29, 2016
Time is finite; Technology is not
Infinite possibilities:
Potential client calendaring
Client Development – automation
Practice Management including time
& billing
Accounting
Client Feedback
Excel
Document Signing & Storage
Legal Research
E-discovery

17. 17Mary Juetten Sept 29, 2016
Choosing Tech
Demand Metrics
Measure ROI
Trial or free demo
Less is more
Feedback
Evaluate Client Experience
Start small and build
Be open to change

18. 18Mary Juetten Sept 29, 2016
Continuous Improvement
Dashboard Approach
Like the workflow and matching KPIs,
improvement requires constant
monitoring.
Change and experimentation mentality.
Learn to delegate and outsource.
Budget should not be just revenue
divided by 12, build up costs and
revenue, including pricing.
Enhance your Practice with enabling
technology.
Measure KPIs regularly on Dashboard.
Review and Act upon the results,
adjusting targets, workflow, resources, &
technology.
Budget
Practice
Measure
Act

19. 19Mary Juetten Sept 29, 2016
Small Law Firm KPIs:
How to Measure Your Way to Greater Profits
In print October 2016
Order your copy today:
http://legalsolutions.com/Juetten
Practical Guide to implement KPI
framework as a Dashboard requiring
only spreadsheets
Mary Juetten
@maryjuetten
mejuetten@traklight.com
Evolvelawnow.com