How to Create KPIs that Help You Reach Your Law Firm Objectives
You’ve probably heard a lot about KPIs. You might have a basic understanding of what they are and why they’re important. However, maybe you still feel confused about exactly where to start with them.
Today we’re doing a deep dive into KPIs just for you!
Let’s get clear on this key component of running your law firm.
A KPI is a key performance indicator. It’s a measurable value that demonstrates how effectively a company is achieving its key business objectives. The key is that you must have key business objectives in order to know what your KPIs should be.
Some of the most common KPIs for businesses are gross income, sales, effectiveness, expanding your firm, and growing your team. Your firm’s KPIs will be determined by whatever your objectives are. You need to define them and make them very clear because that’s what you’re going to look at to start building your KPIs.
Leading and Lagging
There’s a concept of leading versus lagging indicators. Lagging indicators are ones that you track but, by the time you can see the results, it’s too late to fix it. The goal is to have more leading indicators. They indicate future results.
Some examples of leading indicators include client participation in reviews. That’s a good leading indicator for future referrals. Another might be leads that came in via marketing. Those could be a leading indicator of how many new clients you’ll gain.
Assigning Team Members to KPIs
One of the most important parts of KPIs is figuring out who on your team is tracking each one. For example, your bookkeeper probably keeps track of gross income. You might have an intake person who tracks leads. Your paralegal might request and keep track of client reviews.
These things aren’t necessarily difficult to track but if you’re not doing it consistently, or you don’t have someone assigned or responsible for tracking them, then it just doesn’t happen. Then you have to go back and figure it out at the end of the year.
Additionally, once you’ve determined who’s tracking each KPI, you’ll want to consider who’s responsible for each KPI. Your sales and marketing team might be responsible for the number of new clients you gain, the person sending out review requests and following up with clients might be responsible for the number of positive reviews you get, and your operations team might be responsible for your firm’s efficiency. You must know who is responsible for each KPI so you can hold them accountable.
If you want to learn more about best practices for creating KPIs, check out Episode 070: KPIs Demystified.