Mary Juetten's slides from her presentation on October 14, 2016.

1. SMALL LAW KEY PERFORMANCE INDICATORS
Use Metrics to Manage & Grow your Practice
October 14, 2016
Mary Juetten
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2. 2 Small Law KPIs with Mary Juetten
Presenter
Mary Juetten, founder and CEO of Traklight
Mary has dedicated her more-than-30-year career to helping
businesses achieve and protect their success. Mary developed the
only self-guided software platform that creates a custom intellectual
property (IP) strategy and assesses business risk – Traklight.
In 2015, Mary cofounded Evolve Law and speaks internationally on
change and technology adoption in the legal industry. Mary was
named to the American Bar Association's Legal Resource
Technology Center 2016 Women in Legal Tech list and FastCase
Class of 2016. She now serves on the Group Legal Services
Association (GLSA) Board.

3. 3 Small Law KPIs with Mary Juetten
KPIs: Use Metrics to Manage & Grow your Practice
KPI Overview
– Who
– What
– Why
– When
– Where it worked
Clients First
– Client Development
– Pipeline
Getting Started on the Right Track for 2017
– Full KPI Framework & Technology
– Continuous Improvement

4. 4 Small Law KPIs with Mary Juetten
KPI Overview

5. 5 Small Law KPIs with Mary Juetten
KPI Overview: Ws
Who
What
Why – billable hour misconceptions
When
Where it worked – client experience
Q&A at the end of the presentation

6. 6 Small Law KPIs with Mary Juetten
WHO
Law firms are businesses
Accounting, payroll, KPIs are in addition to
the practice of law can be overwhelming
Outsource or use technology
KPIs are for all size firms because they use
the same principles; just add zeros
Use small firm examples here

7. 7 Small Law KPIs with Mary Juetten
WHAT
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.
Move from Profits per Partner.

8. 8 Small Law KPIs with Mary Juetten
WHY
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 collected fees.
Don’t dwell on billing; focus on collections
and happy clients.
Record all hours regardless of fee structure
Use the KPI data for creating pricing and
billing models.

9. 9 Small Law KPIs with Mary Juetten
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.
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.
Results are 88% when look at one month based on this data.
Note that Firm Central provides collections realized by
timekeeper or $ collected by timekeeper.

10. 10 Small Law KPIs with Mary Juetten
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 (includes time & billing, & practice management)
• 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%)

11. 11 Small Law KPIs with Mary Juetten
WHEN
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 on the
survey.

12. 12 Small Law KPIs with Mary Juetten
WHERE IT WORKED
Positive and Predictable Cash Flow:
Satisfied clients tend to pay and it’s easier
to upsell or have happy clients refer friends
and associates.
Start with client development KPIs,
including pipeline and cost of client
acquisition and measure firm culture and
client experience.
Borrow from outside the law: Net Promoter
Score (NPS)

13. 13 Small Law KPIs with Mary Juetten
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?
Additional Question: Why or Why Not?
Allow for feedback, good and bad.
Help with action plan for improving NPS.
Survey must be tracked, not anonymous.
Technology:
Google Documents or Survey Monkey, Excel for
responses.

14. 14 Small Law KPIs with Mary Juetten
Clients First

15. 15 Small Law KPIs with Mary Juetten
KPI Framework
Follow the Workflow
Client Development
Cost of Client Acquisition
Productivity
Profitability
Performance
Client Experience
Firm Culture

16. 16 Small Law KPIs with Mary Juetten
Focus on Clients: Happy Clients; Profitable Practice
Value of delivery
Transparency
What input do the clients have into your
practice?
Borrow from outside the law:
Client Pipeline
Client Feedback
Client upsell or referral rate
Client conversion rate

17. 17 Small Law KPIs with Mary Juetten
Potential Client Pipeline
Help or support – outsource?
Targets – look backwards to measure first
history if possible.
Just get started with a listing of potential
clients & estimated revenue.
Terms:
Go | Get
Suspect, Prospect, Lead, Paused

18. 18 Small Law KPIs with Mary Juetten
CLIENT DEVELOPMENT: Pipeline
Adjusted Prospect Pipeline ($)
Total dollar value of the Prospective Clients’ Matters on
the Pipeline adjusted for likelihood of success divided
by total Attorneys (and Paralegals in some cases*) to
yield a dollar value.
Technology:
Can start with Excel and move to Customer Relationship
Management (CRM).
Some Practice Management have CRM capability.
Targets:
Should tie into the monthly revenue in your budget.

19. 19 Small Law KPIs with Mary Juetten
Getting Started on the Right Track for 2017

20. 20 Small Law KPIs with Mary Juetten
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
the WIP and A/R.
Check on percentage of “old” A/R.
Deeper dive depending on the results.

21. 21 Small Law KPIs with Mary Juetten
KPI Framework: 40+ measures
Client
Development
Client,
Acquisition Cost
Productivity
ProfitabilityPerformance
Client,
Experience
Firm Culture

22. 22 SMALL LAW BENCHMARKS: Does your Profit Measure Up?
PROFITABILITY: WIP & A/R Lockup Days
Total days in the period divided by the WIP
Turnover Days.
WIP Turnover Days are the Unbilled Time
(WIP) for the same period divided by the
average outstanding WIP balance at the
beginning and end of the period.
Same formula for A/R, for example in a
month of 31 days using the numbers here:
31/ ($500,000/(($125,000 +$531,250)))
2

23. 23 SMALL LAW BENCHMARKS: Does your Profit Measure Up?
PROFITABILITY: Aging Tolerance
4- Profitability (f) Aging Tolerance (%)
Total collections within 60 days divided by total billings.
Set deadline for recording WIP by month-end.
Policy to bill out all WIP each month (where practical) or at end of
each engagement, regardless of timing.
Set payment terms.
Investigate factoring or other services if necessary.
Use e-billing and consider accepting credit cards.
Unbilled(
Time
Billed(
Time
Collected
Time

24. 24 Small Law KPIs with Mary Juetten
Systems & Data
Systems – from manual to high tech, define
your workflow. Pick the appropriate
technology.
Garbage In; Garbage Out.
Check the data sources and set up as many
links as possible.
For example, QuickBooks data to
automatically populate your spreadsheet.

25. 25 Small Law KPIs with Mary Juetten
Targets
Just Get Started
Go back to the Previous Year or Years
Measure more often at the start, start
monthly or weekly depending on KPI.
Do a first quarter review and make
adjustments
Look for industry benchmarks but also
outside to other professional services.
Targets depend on your circumstances!

26. 26 Small Law KPIs with Mary Juetten
Time is finite; Technology is not
Infinite possibilities:
Client Development – automation
Practice Management including time &
billing
Accounting
Client Feedback
Excel
Document Signing
Document Storage for Business (secure)
Customer Relationship Management (CRM)

27. 27 Small Law KPIs with Mary Juetten
Dashboard: monitor frequently
Client Development
Client Acquisition Cost
Productivity
Profitability
Performance
Client Experience
Firm Culture

28. 28 Small Law KPIs with Mary Juetten
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

29. 29 Small Law KPIs with Mary Juetten
Choosing Technology
Simple to use
Demand Metrics | Case studies
Measure Return on Investment
(ROI)
Trial or free demo
Less is more
Feedback
Evaluate Client Experience
Start small and build
Interoperable tech
Be open to change

30. 30 Small Law KPIs with Mary Juetten
Questions

31. 31 Small Law KPIs with Mary Juetten
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