"There are two key questions every firm that we've worked with has wanted to answer... The first, "What work have we accomplished in a set time period?" And the second, "Are we getting paid for that work in a timely way?”- Kate Eberle, Director of Consulting

To drive growth and profitability, companies need to know their numbers. But which numbers? Regardless of industry, every company needs a firm grip on core metrics such as Profit and Loss (P&L), Accounts Receivable (AR), and Days Sales Outstanding (DSO). But for specific industries, choosing the metrics that advance your model can be the difference between top and mediocre performance.

For example, manufacturing companies measure Overall Equipment Effectiveness (OEE) and Cost of Goods Sold (COGS), while healthcare companies track Patient Wait Time and Provider Utilization. By being selective about which metrics to track, leaders can motivate behavioral change and focus their team’s energy on the activities most critical to advancing the value creation plan. (Change management expert Dain Johnson discusses this topic in depth in an Expert Insight Series interview.)

KPIs for the Legal Industry

In our work with some of the nation’s largest law firms, we’ve found a core group of metrics that drive organizational accountability and productivity. They include: 

  • Work in Progress (WIP) – What work is complete and unbilled/unpaid?  
  • Ratio of Paralegals to Associates and Partners – Are we applying our resources efficiently?
  • Productivity (Activity by Associate) – Is the team managing cases in a timely manner? What will bonus payouts be?
  • Matter Management – Can we analyze performance by office, practice group, and client over specific time periods? 
  • Diversity, Equity and Inclusion (DEI) – Are we proactively managing and creating an inclusive culture that advances the firm’s mission?
  • Case Mix and Pro Bono Work – How can we optimize and promote our case mix to improve our ranking and attract new clients and attorneys?

Listen to host Brick Thompson and Consulting Director Kate Eberle as they discuss these key metrics and other reporting considerations for the legal industry. Read the full transcript below.