Are KPIs useful when managing lawyers?

In my last blog on the role of coaching in law firms, I argued that a coaching style of management was appropriate when managing lawyers, most especially those who are senior and experienced. The blog attracted comments making the fair point that we should ensure we have the ‘right’ people in the firm in the first place. In my defence, I rather thought that was implicit. But how do we take a view on who are the ‘right’ people?

I think that key performance indicators (KPIs) are of great use, especially to a busy management team. And, I hope, to the lawyers themselves. It cannot be a fair management system if those being managed don’t know the measures applied to them and have no input. I will refer to issues of motivation in a later blog, but the subject of ensuring you have the right lawyers is a subject in itself, and I do not attempt to cover if here. For now, suffice it to say that some lawyers are motivated by having stretch targets, and some are demotivated by having targets they see as tough.

Of course you will choose the KPIs that are important to your firm, but there are some I suggest will be universally useful. What is important? I suggest billing, allied to client care, but bearing in mind the behaviours that lead to those two.

I think the KPIs can be broken down into these headings:

Financial

• Billing per month versus their history, versus firm average
• Fees paid in month
• Fees past 30 days overdue

Marketing

• Leads obtained from own activity
• Total leads handled
• Conversion rate versus their history versus firm’s average
• Leads from recommendation

Customer care

• LCS complaints
• HO service concerns for that lawyer by number
• Client testimonials

You can set targets for each of the above if you wish. We do, and find this useful to chart progress and difference between lawyers. On the face of it, if one lawyer can achieve a certain target then another could with the right input or information. If someone has reached a certain performance figure in the past, it is very useful to be able to point that out to them when they are struggling a little and starting to doubt themselves.

I think these are the main KPIs. What others do you think should be used?

Finally, I would stress that ‘paralysis by analysis’ is to be avoided. It is a course of improvement over many months that we seek to see, and I think it is important not to concentrate on a short-term change of performance.

I think KPIs give a structure to a background supervision of your lawyers, underlying a trusting and coaching management style. Lawyers will know what is expected of them and what they need to do to be the ‘right’ lawyer for your firm.

The above stats can be relatively easily produced by a basic software system if there is proper input to it. Personally, I have a spreadsheet which produces a graph showing the monthly changes, which I find easier to read.