Regardless of the size of your law firm, metrics are a huge factor in business development and increasing profits. The amount and types of metrics you utilize will vary greatly between firms; however, there are three main categories all firms will use, which are marketing, financial and operational. In this post, we will provide the top 4 reasons you need metrics in your law firm.
Why Are Metrics Important?
You will not obtain results from your marketing efforts without knowing where your leads come from, how they are converting, and how much revenue they are generating. Having a client relationship management (CRM) system to collect relevant data, along with a practice management system that can create reports will provide insights for marketing campaigns with a high return on investment.
Along with tracking your marketing returns on investments, you will want to review metrics related to the profitability of matter types, partners, and employees. These metrics show you what matter types or employees generate the most profits for your firm, allow you to develop and implement new targeted marketing campaigns, and know the value of what each partner or employee adds to the firm.
Satisfied clients not only become returning clients but become the momentum of your marketing by generating completely new leads with unknown potential clients. These leads come to you at no charge and have trust in you prior to contacting your law firm. Many of the most successful law firms rely heavily on their client’s experience as part of their marketing strategy.
As the lifeline to your firm, your cash flow status needs to be monitored and reviewed regularly. Reviewing these metrics regularly can identify issues with receivables, pro bono work, rates, billing, and overhead expenses before they become a problem. New ideas can be created to cut costs or increase revenues as you review patterns and redundancies in this data.
Metrics are generally the first step to improving your law firm, whether you want to improve the financial or operational part of your law firm. Reviewing these metrics regularly will improve your decision making and assist in moving your matters through the workflow process at a faster pace. These improvements will fuel your marketing efforts and provide a robust return on investments. Using a law practice management solution that collects and stores all this data, combined with the ability to create custom reports tailored to your metric needs can make the process of reviewing metrics simple.