You get what you measure. This isn’t news — first you decide what you want to achieve and then you design your metrics to let you know when you’ve arrived. That’s good practice and it’s the message of my earlier post, The Metrics Mess. Simple stuff, right? Wrong. You’d be amazed how often folks misunderstand where true success lies and, therefore, collect metrics that drive them in the wrong direction.
Let’s take the example of the typical law firm. How does it define success? Profits per partner? Long-term client relationships? Employee attrition? Recruiting rates? The reality is that there are many bases on which to judge success. So, what do firms typically choose to track? Billable hours. When you track hours, you send the unmistakable signal that you are interested in time — lots of time. After all, time spent equals money. However, where in that equation is the notion that time spent well is worth more than money? At the end of the day, you know the cost of the time spent. But, do you know the value to the firm or, more importantly, to the client?
If we defined success as delivering high-value services to clients, what would we track? If we defined success as building value within the firm as an institution, what would we track?
For law firm knowledge management, the issue of metrics is a persistent problem. We’ve chased various ways of trying to prove return on investment, but with little success. What should we track to show how our efforts provide value to clients and to the firm itself? Until we’ve conquered this challenge, we can’t expect to achieve any real measure of permanence within a law firm. And, that’s a problem when the economy is heading south.