Interesting topic going on over at the Hildebrandt blog on whether it is time to develop new ideas for measuring performance at law firms. In Lisa Smith’s post “Time for New Metrics“, she lays out some interesting new categories that law firms should develop to show how they are managing their business:

  • Firm Performance – what are the relevant measures of firm performance, including the profit margin idea above?
  • Expense Management – how do we measure the impact of changes in staffing models, leveraging technology in delivering services, outsourcing?
  • Practice Management – how do we compare the performance of practices who may have very different profit drivers and pricing models?
  • Partner Performance – how do we move from a billable hours and originations driven approach to measuring partner performance?
  • Client Development/Market Strength – how do measure success in strengthening client relationships?
  • Balance Sheet/Risk – can we assess the strengths and weaknesses of a firm’s financial practices?
  • Management and Leadership – can we measure the effectiveness of strategic, talent management and other initiatives? 
I’ve seen a lot of talk lately about how firms and clients are wanting to find ways to improve overall efficiency effectiveness of how matters are handled, and I’ve seen a lot of charts from consultants on methods to follow to improve efficiency and effectiveness. However, it doesn’t seem that anyone is putting these ideas into motion.
It reminded me of a story that a secretary once told me when I worked at a law school. She said that the people she worked for were very good at “getting their ducks in a row.” Unfortunately, they were not very good at “kicking the last duck in the ass to get them to go into the water.”  When that happened, she took it upon herself to do a little kicking to get things moving. 
Once again, someone has come up with a new method of looking at measuring performance, but it doesn’t look as if anyone is lining up to put this type of tool into action. If law firms don’t kick themselves in the rear and get moving… then they might find their clients putting on their boots and getting ready to do a little kicking in order to get their firms into the water.

  • I too have not seen a lot of evidence that firms and departments are truly moving forward. A few are getting some of their ducks aligned, but as you note, line-up ducks aren't yet swimming anywhere useful.

    I wish I knew the cause. Are consultants — from big ol' Hildebrandt to little ol' me — not effective in showing the value and not just talking about it? Is inertia and the fear of the new still the dominant factor? Is the industry reverting to the comfort of the old normal where certain types of inefficiency were rewarded?

    I'm convinced the value is there — and that I and others can prove it with the firm's and department's own data. But it's like the old joke about how many psychiatrists it takes to change a light bulb.

    It depends on whether the light bulb wants to change.

  • In addition, no one wants to be the first few ducks in the water, it's a little risky. Sometimes in order to "change people", you have to "change people". It reminds me of various meetings at firms where the most senior partners in the room were just resistant to any discussion about changes. There was an obvious divide between the older and younger partners. This might be swiping a broad brush, but the thought of giving up substantial income and control over their clients was keeping these firms from any meaningful change. I hope we don’t have to wait for the shift in power to “change the people” as the younger partners exert more influence. This isn’t a case of the raw data necessary to develop metrics and measure against them isn’t available in most of today’s new systems. It’s a lack of desire to expose it and gain consensus on using it to develop new business models.