Making data-driven decisions is more than just a tagline for law firms, which is why we are thrilled to share UniCourt CEO, Josh Blandi’s new article “How Data-Driven Firms Develop KPIs from Court Data” that was recently published in Legaltech News. Josh’s article provides a roadmap for law firms interested in leveraging KPIs or key performance indicators on how they can start by identifying, gathering, and tracking the data points that matter to their business model. In addition to discussing how law firms can make use of both internal and external data points and how they can be layered together, Josh also details specific use cases on how law firms can utilize KPIs for digging deeper into litigation trends and creating selling points for why clients should choose them over competitor firms.
Here below is an excerpt from the introduction of Josh’s article:
Law firms that aren’t currently leveraging KPIs to measure progress are already behind. KPIs, or Key Performance Indicators, are benchmarks used to measure a department, firm, or practice group’s progress, efficiency, and effectiveness. In other words, it is a direct, tangible measure of a group’s performance. Law firms need them: Without an empirical way to measure progress, they simply cannot grow in a meaningful, organized and intentional way.
In this article, we will explain how law firms can and should use viable data sources (internal and external) to track their KPIs. We will also illustrate a few use cases on how to implement KPIs by relying on accurate, reliable court data, and share how firms that are not currently utilizing KPIs can start implementing data-driven decisions for meaningful growth.
Using Court Data to Set KPIs
A KPI is a concrete, measurable value that establishes how effectively a company is achieving its top business objectives. In other words, companies use KPIs to take their pulse—to see how well they’re doing in terms of achieving their stated goals. At the highest level, KPIs generally measure the performance of the company as a whole, while at a more granular level, they track the success of individual practice areas and attorneys within law firms.
KPIs are especially vital to growth-oriented law firms, as they provide a way to set and measure progress benchmarks. Firms can do this by leveraging reliable data sources, which can help attorneys within firms make data-driven business decisions.
Internal Data Sources
Building decisions upon accurate data sets can save firms money because they drill down into specific issues like a particular litigation department’s average output, the revenue it brings in, how much it costs the firm, and how it compares to competing departments. This can, in turn, position decision-makers within law firms to better determine when a new hire, a layoff, or a general restructuring is necessary.
For example, consider a plaintiff’s personal injury firm, which will likely face several upfront costs in each case: hiring medical experts, reconstructing accidents, and ordering client medical records, to name a few. The firm could use the dual internal data points of (1) the average revenue cases of a specific nature bring in, and (2) the average expense involved in such cases.
By examining these data points, the firm can make a reasoned, numbers-based decision about whether these types of cases are lucrative enough to continue taking. If a small-scale “neck pop” case, for instance, seems to be more trouble than it’s worth, the numbers can spell out whether that’s true: If the cases cost a great deal in terms of expenses as well as time and energy and result in small settlements, the firm can ultimately decide to stop taking them.
You can read the full article here on Legaltech News.