Is Now the Time to Think about Your Firm Metrics?aderantuser
Over the years, law firms have used the same metrics to measure their success or failure, most (if not all) of which are internal facing. With the changes we are now seeing in the legal market itself, one has to ask a couple questions:
- Are these metrics still relevant?
- If so, are these the only metrics we should be using to measure our firms success?
- Should these metrics be used as a basis for remuneration?
Following on from the recent Aderant white paper, titled Your Partner Compensation Can Be Better: Here’s How, let’s think about what many firms are measuring and whether this is conducive to servicing clients in the best way possible.
What do our clients want? If the customer is king, we need to be considering what our clients are asking for. Accepting George Beaton’s premise that the legal market has reached a state of maturity and is now driven by the consumer rather than the provider, we must consider the “What” clients are looking for when we measure our firm’s performance.
The recent IADC Inside/Outside Counsel Relationship Survey 2015 tells us that Corporate Counsel requires the following general requirements for Outside Counsel:
- Value billing, fixed or capped fees for projects or project components
- Discounted fees in exchange for volume of work
- Submit detailed budgets
- Submit strategic or financial plans
- Knowledge management software, AI to reduce cost
- Fixed budgets for each project
- Legal project management systems or tools
Common across all of these requirements is controlling matter spend and making law firms accountable for the time and value of a matter. Ultimately, the Corporate Counsel is responsible to their board for their legal spend and expect the law firm to be equally accountable. Fail to note this at your peril!
Based on this, surely at least part of our metrics should be based on how we are performing against our budgets and the ability to keep to budgets should be incorporated into our firm health metrics and also into our remunerations.
Why include such metrics in remuneration? If a metric has no impact upon the ultimate income of a partner, it will never be attributed the level of importance it truly requires and will not be acted upon.
I would suggest that it is time to change our measures to truly consider the client and incorporate metrics into our remuneration process to emphasise the importance of the client to our business. Taking this step will be changing our processes to truly put the client first, and will show law firms taking the first steps in redefining their practice to the new paradigm of client-centric business processes.