Law firms are notorious for active engagement with their clients. New issues arise every day, new information is fed to and from clients and other sources on a regular basis, and numerous deadlines and due dates force constant attention on open cases. This is, in fact, the sign of a successful and active firm.
Looking at the same information from a different angle, however, paints a slightly different picture. It’s essential to take the time to look at the health of the law practice and understand what type of cases are most profitable, what activities are costing your business money, and where you should focus marketing efforts to attract and secure new clients.
While you may have a relatively good understanding of your business from being in the office every day and knowing the status of cases, there is more you can learn from hard data. Traditionally, capturing this data and compiling it into a useable format has been time-consuming and the value may not have outweighed the amount of work required.
With the advent of Business Intelligence (BI) tools, law firms are now able to actively measure data that will enable partners and staff to make more informed decisions on business operations such as staffing and advertising, for example. Ultimately, you will be running your law practice with increased efficiency, which leads to increased profitability. BI reporting dashboards provide value, structure and clarity to the plethora of data currently spread across your disparate company systems. The beauty of these BI tools is their ability to pull in information from all of those key sources and automatically consolidate it into a logical, understandable format that you can use to both troubleshoot problems, and proactively grow.
There are numerous pre-built business dashboards available to provide an easy yet effective view of your firm’s operations. However, you can also create customized dashboards based on critical indicators that are most important to your company.
The following three dashboards are examples of existing dashboards that provide a significant level of detail on operations that your law firm may not be tracking today. You’ll be surprised at how much you learn and how quickly you can identify trends and opportunities for growth.
3 Key Business Dashboards to Track:
- Financial Controlling Dashboard – Your firm’s financial status is summed up in one dashboard including all relevant indicators per business unit: available assets, gross and net profit margins, and debt ratios.
- Monthly Financials Dashboard – Key financial indicators help you track the actuals against budget for your income, expenses by category and overall profitability. It also includes the cash flow projection.
- Team Productivity KPIs – This dashboard provides an overview of team time tracking and management. It can be filtered by client project, team or team member.
- Other Possible Law Firm Dashboards to consider:
> Cost of servicing a client
> Profitability by practice area
> Profitability by partner
> Billable optimization
Tracking law practice data through BI dashboards provides the content – and context – you need to make important decisions to grow your firm and ensure operations are running as efficiently as possible. Once you realize the value of the information you can harness with Business Intelligence tools, you can expand your usage to include metrics reporting on all aspects of your business unique to your focus areas, geography and target client types.