This session is entitled “Objective Business Strategy: What Are You Trying to Measure and Why?” The panelists are: Doug Doerfler (Chief Financial Officer, Stinson Morrison Hecker LLP), Stuart Kay (Director, Global Business Systems, Baker & McKenzie), and Timothy B. Corcoran (Corcoran Consulting Group)
[These are my notes from the 2013 Ark Group Conference: Business Intelligence and Analytics in the Legal Profession. Since I’m publishing them as soon as possible after the end of a session, they may contain the occasional typographical or grammatical error. Please excuse those. To the extent I’ve made any editorial comments, I’ve shown those in brackets.]
- How does the Choice of Metrics Affect Behavior? Stuart Kay started as a lawyer working on a fixed fee basis. This taught him to be “super efficient.” Doug Doerfler’s firm rewards lawyers for business origination, so this tends to make lawyers compete more for new business. Tim Corcoran noted that the compensation model absolutely drives behavior: if you compensate for new business, you’ll get a lot of subpar new business; if you compensate for current business, you won’t get any new business.
- How to Show the Value of Your Support Service? Measuring how much you spend is straightforward. Showing the return on that investment is harder. Stuart Kay believes that if you “took out” the KM team, there would probably be little impact on the bottom line today. However, down the road there will be an impact. This has happened time and time again in law firms: there is an initial push for KM that results in a new KM system. If it runs reasonably well, it is taken for granted. When there’s a market downturn, it’s easy to reduce KM staffing because the firm doesn’t realize the value embedded in creating and maintaining that KM system. Then a few years down the road, a partner realizes that they cannot compete for lack of a well-running KM system, so the firm begins to invest in KM again.
- If You Had All the Necessary Tools, What Would You Measure? Doug Doerfler says that he would measure cross-selling success and attorney investment in marketing efforts (are those marketing dollars being spent wisely?). Stuart Kay would like to be able to make better use of the available data. For example, he would like to generate more reliable forecasts rather than just “guesstimates.” He would also like to measure based on a scorecard. This could include measuring attorney satisfaction. Tim Corcoran would measure both short-term and long-term profit. He would also like to improve quality (reduced cycle time, reduced defects in work products). Finally he would measure lawyer satisfaction and voluntary departure rates. Above all, he would measure client retention rates.