CCL Resources

Is Your Law Firm Truly Client-Centric?

In the business world, Key Performance Indicators, otherwise known as “KPIs,” measure a company’s strength and success. A KPI can help explain how well a business or an individual is performing compared to its strategic goals and objectives.

Some examples of KPIs include indexes for revenue, income sources, profitability over time, and working capital. This data can help businesses determine if they are meeting their goals.

KPIs can also help businesses identify areas of improvement, as well as new opportunities for growth. In the legal field, a law firm’s KPIs can include the following:

  • Billable hours
  • Revenue per employee
  • Number of matters pending
  • Number of new matters opened
  • Revenue per matter
  • Amount of average bill

However, KPIs mostly consist of internal data in the legal field, KPIs are not the best measure of whether the client’s expectations are being met, and how quickly or easily the client’s desired outcome is realized.

These factors are more appropriately measured by Customer Performance Indicators, otherwise known as “CPIs.” Firms and businesses that are customer-centric will rely on CPIs, rather than KPIs.

CPIs are more valuable than KPIs because client satisfaction is perhaps the best way to realize increased growth in a law firm. Therefore, measuring how well a law firm performs against its CPIs can help a law firm realize its goals for expansion and growth.

Identifying Your Law Firm’s CPIs

In general, a CPI is an element that clients indicate is important to them. A CPI is measured in accordance to the value brought to the client. In the legal profession, factors such as time, money saved, or money received, amongst others, are typically important to firm clients.

When law firms track what is important to its clients, as opposed to what is important to its bottom line, attorneys can better understand what is most important to its clients, and in turn can also determine how they can better serve their clients.

When clients feel well-served, customer loyalty and sentiment will improve. That is, when your firm’s CPIs met, profitability will typically improve.

In the legal profession, CPIs will vary based on the type of law firm and the cases it handles.

In a small law firm that handles personal injury matters and other general legal matters, CPIs might include the following elements:

  • Time and attention to client during intake process
  • Clarity with which attorney explains legal rights and legal process
  • Ability of attorney to address all of client’s questions
  • Ability of attorney to provide sound legal advice
  • Availability of attorney to speak to client for duration of matter
  • Quickness in returning phone calls and emails
  • Providing adequate notice of upcoming important dates / events
  • Friendliness and helpfulness of staff
  • Number of days to obtain a settlement after the accident
  • Settlement amount vs. amount of insurance available

In a large law firm that handles legal matters on behalf of corporate clients or insurance companies, CPIs may include:

  • Hourly rate for legal services
  • Cost per matter handled
  • Cost per attorney
  • Amount budgeted for matter v. amount actually spent
  • Percentage of cases resolved successfully
  • Length of average case
  • Amount of settlement of average case
  • Number of cases tried v. number of cases settled
  • Work assigned to appropriate staff
  • Compliance with internal deadline
  • Response time to emails and other requests
  • Timeliness of submitting billing statement
  • Quality of legal services provided

When developing your firm’s CPIs make sure that you identify what is important to your own clients. Do not make the mistake of borrowing and implementing the CPIs of another law firm.

Also, do not use outside experts or focus groups to determine your firm’s CPIs. Additionally, online surveys are not always reliable when setting CPIs for your legal practice.

However, one effective way to identify your firm’s CPIs would be to work with researchers specifically trained to identify customer expectations and frustrations in your field.

Use Your Firm’s CPIs to Increase Your Firm’s Profitability

Once you have identified your CPIs, you should develop and implement a method to accurately measure your CPIs. After you have collected your data, you can analyze what actions can be taken to become more client-centric.

By performing this analysis, you can determine the effect your CPIs had on your firm’s KPIs. When you have determined which CPIs positively affect your KPIs, you can instruct your employees and staff on how to meet your CPIs, and hold them accountable for same.

When your firm is able to address the outcomes important to customers, firm growth will follow.

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