Key Performance Indicators, Part 2: Important KPIs for Your Firm

Last week in part 1 of this series, we talked about what KPIs are, how to choose them, and how to integrate them into your firm. In this second part, we wanted to provide you with some inspiration on potential KPIs for your firm based on what others around the country are doing.

Remember, your firm can have several different KPIs depending on the particular department or function you’re trying to keep track of. This can be financial, marketing, operational, etc. But most importantly, each member of your team should be assigned ONE appropriate KPI (no more than 3) to monitor and report on with regularity.

Depending on the number of seats you have in your firm and who occupies them, here are a few different examples of what a KPI might be.

Client Acquisition

  • Number of new cases
  • Average case value
  • Number of consultations
  • Conversion rate (from consultation to retainer)

Financial

  • Monthly revenue
  • Cash flow
  • Operating cash reserve balance
  • Past due ARs (less than 30 days and/or greater than 30 days)

Marketing

  • Number of referrals
  • Number of qualified leads
  • Cost of acquisition

Productivity

  • Number of billable hours OR ratio of billable to non-billable hours worked
  • Collection rate (hours collected divided by hours invoiced)

This is certainly not everything that could be a KPI, but we hope these examples gave you some inspiration! These KPIs should be monitored on a quarterly or monthly basis and be an integral part of your HR/performance review process. If someone isn’t hitting their KPIs, it could mean that they aren’t the right person for the job, or that something in your firm is severely broken and needs to be looked at.

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