Originally published June 21, 2021. Updated September 18, 2023.
This is the fifth installment of our series about the lifecycle of personal injury claims, in which we focus on what you can do to get more clients while providing them the best service possible. To read previous installments, click here: First, Second, Third, Fourth.
The lifecycle of a personal injury claim includes many key processes, including intake, client management, and closure. We’ve covered each of these steps in-depth, but we can’t truly resolve this series without talking about the metrics law firms can use to monitor these processes, measure their success, and identify areas for improvement.
Without establishing and monitoring key performance indicators (KPIs), your firm would be operating without a compass. Cases will become stagnant, revenue might go uncollected, and inefficiency will become the norm.
However, when you identify and stay on top of your firm’s KPIs, you can identify where your firm makes money, where your operational weaknesses can be improved, and how you can ultimately grow your business.
You should already have a solid understanding of your firm’s foundational financial metrics. That means knowing how much revenue you take in and how much overhead your firm has. Most law firms either already keep track of these figures or at least have access to the resources needed to begin this process.
Before you feel overwhelmed with all of the KPIs you could be tracking, get a clear understanding of one key metric: money in versus money out. From there, you can become more granular in how you track your firm’s financial KPIs.
For example, once you have a system in place to track the amount of revenue your firm generates, you can then begin tracking how your team members’ time is allocated to get a clearer understanding of the processes that make you money versus those that don’t. One specific example is billable versus non-billable hours.
Operational KPIs can vary for each firm. For many personal injury firms, they start with the number of cases or clients they are handling. For example, how many new clients the firm signed in a given period, or how many cases are currently active.
Operational KPIs go hand-in-hand with financial KPIs to give you an overview of your firm’s progress and growth. When laid out in the right format, they’ll give you invaluable insights about your firm’s strengths and problem areas.
You can divide and conquer your firm’s metrics by tasking different team members or departments within your firm to track them. For example, if you have case managers, they can keep track of operational KPIs like the number of new clients and number of active cases. Meanwhile, the person or department in charge of billing can track financial KPIs.
There are endless KPIs your firm could be tracking. The bigger and more complex your firm is, the more metrics you’ll have available and the more important it will be to keep tabs on all of them.
Don’t let these endless possibilities prevent you from getting started. You can learn and dramatically improve your firm’s efficiencies by tracking just a few essential metrics, including:
Having a system that you use to enter, track, and analyze KPIs is critical. It’s important that the system be centralized so that each team member has access to their relevant metrics. The system should also be shareable, easily accessed, and user-friendly.
Tracking KPIs and business metrics for law firms is best done with a practice management system like backdocket. We’ve created our software to offer each law firm’s team member a personalized dashboard where they have constant, easy access to any KPI relevant to their role.
Our dashboards are highly customizable, both for the firms we work with and for each team member within those firms. One of the biggest compliments we receive from backdocket users is how easy it is to get a better understanding of their firm’s operational and financial KPIs because of our dashboards.
We make it easy for everyone at your firm to enter and track their most important KPIs. The data can then be easily read and interpreted by your team to see what’s working for your firm and what isn’t.
If you’d like to learn more about how backdocket can immediately improve the way your firm works, simply contact us today to schedule your free demonstration.
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