Evolve Law: KPIs and Measurement Are What Legal Clients Expect Now

Topics: Business Development & Marketing Blog Posts, Corporate Legal, Data Analytics, Law Firm Profitability, Law Firms, Legal Innovation, Midsize Law Firms Blog Posts

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SEATTLE — On a rare sunny April day, Evolve Law hosted its first event focused on metrics and measurement. Panelists set out to address the question of what metrics actually matter for in-house legal departments and for practicing lawyers. The event also had a Darwin Talk, which focused on key performance indicators (KPIs) for the new legal consumer. The audience consisted mostly of practicing lawyers with a handful of legal operations attendees. About one-third of the audience said they currently use KPIs.

Bernadette Bulacan, Director of Market Development in the Corporate Counsel segment of Thomson Reuters, started the session with a story told to her by a young general counsel invited to his first executive leadership team (ELT) meeting. “He goes to his head of litigation and puts down three bullet points on the yellow pad of paper that all of us as attorneys are just born with,” Bulacan related. “He goes into this ELT meeting and the head of sales comes up and has a PowerPoint with numbers and pictures. It tells a story about the sales team’s contributions. The head of R&D gets up, talks about investment, and what their team is producing, again using numbers, pictures, and stories. Each of his peers goes up with these numbers, pictures, and stories, and he is crumbling inside because he has this stupid yellow pad of paper with three bullet points.”

The story illustrated what the panel was set to talk about: The need for corporate counsel to adopt metrics to talk about the law firms they work with as well as the limited resources — both internal and external — they deal with.

KPIs in Business and the Law

The good news, however, is that the metric frameworks have been honed by other professional services industries like engineering and accounting and are widely used by businesses. That helps law firms deal with the question of what to measure. “That’s a question that we need to talk with our clients about,” explained Brian Fanning, the Pricing Director at Davis Wright Tremaine. “In a law firm, what we typically measure is rates and hours, and we look at matters, but we don’t really get too much into the work, how is it’s being done, what is valuable and what isn’t. Figuring out what’s important to our clients, and then how we measure that — that is what we’re working on.”

Frances King, Business and Account Manager at Microsoft, agreed. “Part of the problem is that KPIs are relatively novel and new. Many think, ‘Oh, well, KPIs belong in the business world and business intelligence (BI) doesn’t apply here.’ So, I think the newness of it is something that might prohibit people from jumping in,” King said. “It has to be something that everybody is interested in and passionate about, and willing to invest in. It’s not easy, but you must start somewhere, and you have to collaborate and work together, but it’s definitely worth it from my perspective.”

The panel discussed the value of data-driven decisions and how gathering the data is difficult, but again, you have to start small and build upon your data and metrics.

“I really use KPIs in solving problems, and in bringing teams together to align on a particular vision. And then I use those metrics to answer the questions, are we getting better or not?”

— Andres Hermosilla

Andres Hermosilla, Continuous Performance Improvement Consultant at Seattle Children’s Hospital, took the panel back to the collaboration theme. “For me, KPIs are so important because they actually serve as a mechanism to bring people together,” Hermosilla said. “If I have one interest on a project or [someone else] had another, and so forth, and we all have different interests; it’s really hard for us to come around a particular issue and improve it. And so KPIs, and just metrics, in general, help us to synthesize value, and it helps us to hone in on where it is that we have agreed to deliver value.”

“So, for me, I really use KPIs in solving problems, and in bringing teams together to align on a particular vision. And then I use those metrics to answer the questions, are we getting better or not? And at the end of the day, each one of those questions is a decision.”

Data Gathering and Analysis

Measuring without action and follow-up will not add value to either the legal department or the law firm. KPIs are just numbers, and without interpretation, analysis, and a commitment to action, they’re time and resources wasted.

A local patent attorney in attendance questioned the notion that the KPIs discussed were looking “in the rear-view mirror,” because they were based on spend and collections. He wanted something predictive of the future, like that which you find on customer relationship management (CRM) systems and in selling. CRM and knowledge management for clients is a relatively new concept for law firms of all sizes. Measuring the size of potential business and tracking all client development in the “pipeline” of new matters is powerful predictive data.

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Others questioned how CRMs will work with practice management systems and KPIs. Large firms have BI systems that are expensive. It’s important that the creators of practice management systems do more than integrate with third-party providers. They have to make it simple for lawyers to measure their results to succeed.

We transitioned from the panel to the Darwin Talk and the questions around using business systems and principles dovetailed nicely into a discussion of net promoter score (NPS) by Sachin Bhatia, Chief Product Officer of Avvo. NPS is a KPI from the technology and consumer world that measures customer or client satisfaction. (And in my experience, it matches well with small law firms that need to start building their framework with a measurement of what value they are adding to their clients.)

Bhatia discussed how shifts in consumer behavior and unprecedented transparency and information not only are impacting the way consumers search for and find legal information and lawyers, but also are providing key insights to lawyers regarding what consumers want when searching. NPS is a calculation based on asking, “On a scale of 1-10, how likely are you to recommend [insert firm] to a friend or colleague?” (A 1 represents not at all likely, while 10 is extremely likely.) With the results, you can dive into how to improve the scores by gathering more feedback. For example, Avvo has discovered that having the basic knowledge and showing up is expected by clients, and that’s not going to generate any improvement in the rating. On the other hand, providing unexpected results can differentiate your practice. Creating a long-term relationship by anticipating client’s future needs and reducing in-person visits by providing services on-demand using mobile technology also will delight your clients.

The key takeaway from the evening was that clients are demanding not only value but reliable measurement of that value, and individual consumers as clients will wish to see metrics in the law that mirror those in the business world. Attorneys too are looking for predictive or forward-looking metrics embedded in their practice management systems. It’s an encouraging start but best practices and successes need to be shared to have KPIs take hold in-house and within law firms.