Performance Measurement for Law Firms
Increase firm profitability through effective performance measurement.
Hodgart, an acknowledged industry expert, provides practical step-by-step guidance on how to effectively measure the performance of your fee earners, core support functions and overall firm. Hodgart highlights the key challenges many law firms face when measuring performance and provides critical advice on how to tackle them successfully through the development of an effective performance measurement system.
Key topics covered include:
+ Measuring performance in law firms - what it means and what to measure;
+ The key financial measures of profitability and how to calculate them - cost, profit, revenue;
+ The data and financial information required at firm and practice-group level;
+ The effective use, and abuses of financial data;
+ Aligning the economic structure of your type of work to maximise profitability;
+ Implementing an effective performance measurement system;
+ How to measure the performance of your fee earners and support staff - finance, IT, Marketing, HR, KM and other;
+ Client profitability, project management and much more
The report focuses particularly on profitability and demonstrates how it can be used to monitor and compare the outcomes of working with different clients to project future revenue and profit levels. It also includes a useful appendix - an 'Economic Template' which demonstrates how to assemble the relevant data to manage the financial performance of your firm. Performance Measurement for Law Firms is essential reading for any firm looking to measure and enhance all areas of their performance.
Table of Contents
|About the author||ix|
|Chapter 1: Measuring performance in law firms – What it means and what to measure||1|
|Chapter 2: The key financial measures of profitability||7|
|Example one – The difference between cash and profit||9|
|Example two – Impact of revenue definition on Revenue per Fee Earner (RFE)||11|
|Example three – Impact of revenue definition on average price per hour||12|
|Example four – Cost and leverage per equity partner||16|
|Chapter 3: The uses and abuses of financial data||21|
|Determining the right economic structure for the type of work||22|
|Chapter 4: Measuring fee-earner performance||31|
|Chapter 5: Measuring the performance of support functions||35|
|The finance function||35|
|The marketing function||37|
|The HR function||38|
|The IT function||39|
|Other support functions||40|
|Chapter 6: Client profitability and project management||41|
|Chapter 7: The art and science of measuring performance||47|
|Chapter 8: Issues in setting budgets for the next financial year||51|
|Chapter 9: Setting fees that balance the firm’s and client’s interests||57|
|Key profitability drivers||59|
|The client perspective – Value||60|
|Pricing – Balancing profitability and value||61|
|Project management, pricing and profitability||63|
|Chapter 10: Deleveraging – The case for and against||65|
|Chapter 11: Performance trends for the year||73|
|Declining fee income||74|
|Profits per Equity Partner (PEP) under pressure||75|
|Top 11-25 at tipping point||76|
|Funding under pressure||77|
|Head counts falling||78|
|A radical response||79|
|Appendix 1: The economic template||81|
Alan Hodgartart is recognised as one of the world's leading strategic development advisers to professional services firms. His client base covers a very wide range of businesses, from some fairly small firms to some of the world's largest. He works throughout Europe, the US, Asia Pacific and Latin America.
Alan assists his clients in developing the means to improve and sustain their competitiveness by establishing effective strategic management and leadership processes. He is particularly experienced at converting strategic change into practical action steps, and in helping firms build commitment to the behavioural changes required. He has a deep knowledge of competitive trends in the professional services markets and uses this to assist clients in arriving at a genuinely competitive position.
Alan also maintains a research database on competitive trends in the professional services markets of all major jurisdictions. This provides a strong basis in advising firms in different countries because he is able to take into account the particular features of each geographical market, as well as provide objective data on which to base his advice. Alan has been a strategic consultant for his entire professional career and has specialised in working with professional firms for over 20 years. Prior to this, he was trained in strategic consulting and analysis, as well as organisational change methods, where he worked on a global basis with major companies and institutions.
Alan was awarded a 'Lifetime Achievement Award' for his work with professional services firms. Previously director at H4 Partners, Alan became managing director at Huron (UK) Limited when H4 Partners became part of Huron Consulting Group in November 2009, a consultancy advising professional firms (including in-house legal departments) for nearly 20 years.
For more information on Huron (UK) Limited, please visit: http://www.huronconsultinggroup.com.