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Managing the Firm Through KPI's

Terrell A. Turner, CPA

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Terrell A. Turner, CPA

CEO, TLTurner Group

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    • Training for law firm admins
    • Data Analytics for law firms
    • Bookkeeping & CFO support
    • Law Firm Finance Chair – ABA
    • www.TLTurnerGroup.com ​

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Learning Objectives

Explain what KPI’s (Key Performance Indicators) are

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Explore examples and use cases for KPI’s

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Create a framework for developing the right KPI’s

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Legal Administrator Responsibilities

CORPORATE

FINANCE

HUMAN

RESOURCES

IT

OPERATIONS

BUSINESS

PARTNERS

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What Are KPIs?

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Key Performance Indicators (KPIs)

  • KPI’s are like road signs
  • Not all numbers matter equally
  • Good KPIs challenge and encourage you

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Vanity Metrics vs. Performance Metrics

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Vanity Metrics

Performance Metrics

Website visitors

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Social media likes

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Hours worked

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# of association awards

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Annual firm revenue *

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Big-name client logos

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Vanity Metrics vs. Performance Metrics

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Vanity Metrics

Performance Metrics

Website visitors

Client conversion rate

Social media likes

Resource downloads

Hours worked

Average revenue per case

# of association awards

# of customer reviews

Annual firm revenue *

Average revenue per attorney

Big-name client logos

Average revenue per case

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How to Use KPI’s

3-Step Framework

  • Define Your Goal
  • Identify Your Drivers
  • Measure the Behavior

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Step 1: Define Your Goal

Set Your Destination

  • What do you really want
  • Be specific and outcome-focused

Examples:

  • Increase revenue by 15%
  • Improve the turn around time on cases by 25%
  • Cover legal admin task with a staff of 2 people

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Step 2: Identify Your Drivers

What Actions Get You There?

  • What steps are required
  • What influences our results

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Examples:

  • Consultations lead to new clients
  • Time to return client calls
  • Manual vs automated steps

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Step 3: Measure the Behavior

Now Track What Matters

  • Where do we find the data
  • Keep it consistent — weekly or monthly reporting is key

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Examples:

  • # of consults to client – CRM
  • Time on cases – Case Mgmt
  • Collection rate – Billing system

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KPI Categories for Law Firms

Functional Groups

  • Financial KPI's
  • Operational KPI's
  • Client Experience KPI's
  • Marketing KPI’s
  • System KPI’s
  • Risk KPI’s

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Financial KPI's

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KPI Name

Formula/Calculation

Revenue by Case Type

Revenue by Case type ÷ Total Revenue

Net Profit Margin

(Total Revenue - Total Expense) ÷ Total Revenue

Average Revenue per Attorney

Total Revenue / # of Attorneys

Collection Rate

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Client Acquisition Cost

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Employee ROI

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Average Case value

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Operational KPI's

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KPI Name

Formula/Calculation

Case Cycle Time

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Utilization Rate

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Realization Rate

Actuals Hours on the Bill ÷ Total Hours

Work in Progress (WIP)

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Matter Load per Attorney/Staff

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New Matters Opened vs Closed

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Average Cases Worked per Week

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Client Experience KPI's

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KPI Name

Formula/Calculation

Net Promoter Score (NPS)

Likelihood clients will refer your firm

Referral Rate %

% of new matters that came from existing clients

# of Client Reviews

# of reviews submitted by client

Average Response Time to Clients

Speed in replying to client inquiries

Bar Complaints by Attorney

# of complaints per attorney

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Marketing KPI's

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KPI Name

Formula/Calculation

Inquiries Volume

Total number of inquires for your firm’s services

Qualified Lead Volume

Total number of inbound qualified leads

Lead to Consult Conversion

% of leads that complete a consults

New Client Conversion Rate

% of consults that become clients

Cost Per Lead (CPL)

Marketing spend / total leads

Cost Per Client Acquisition (CAC)

Marketing spend / new clients

Marketing ROI

Revenue generated / marketing spend

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System KPI's

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KPI Name

Definition

System Uptime

% of time critical software is operations

# of Systems in Active use

# of softwares the firm actively uses

Automation Rate

% of task that are automated

AI Rate

% of task that are managed by AI

Integration Efficiency

% of data successfully synced between systems

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Compliance/Risk KPI's

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KPI Name

Definition

Trust Account Reconciliation Frequency

How often is the trust account reconciled

Conflict Check Completion Rate

% of conflict checks that are completed

Missed Deadline Incidents

Number of filings deadlines missed

Process Audit Findings

Number of audit errors found

Staff Training Completion Rate

% of training completed by staff member

Firm Training Completion Rate

% of total firm training that has been completed

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KPI Examples in Action

Goal

Driver

KPI

Increase Firm Profitability

Volume of Cases, Revenue, Expenses

Monthly Revenue, Avg Case Value, Avg Expense

Improve Cashflow

Time to Bill, Time to Collect

Avg Days to Bill, Avg Collect, Aged AR

Grow Revenue

Case Value, Volume of Cases

Avg Case Value, # of New Clients, Monthly Revenue

Lower Cost to Acquire Clients

Marketing Spend, Conversions

Leads by Source, Conversion Rate, Spend by Source

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Common KPI Mistakes to Avoid

Avoid These Traps

  • Tracking too many things at once
  • Ignoring team input on what matters
  • Focusing only on the “easy-to-measure” stuff

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Quick KPI Tune-Up Tips

  • Pick 3–5 core KPI's to start
  • Review them routinely
  • Tie them to team goals and compensation
  • Use them to start conversations, not condemnation
  • Update as the firm evolves

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Questions

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Let's Connect!

Terrell A. Turner, CPA​

Law Firm + Finance

www.tlturnergroup.com

terrell@tlturnergroup.com​