Why should your law firm use analytics? Because the data your firm generates everyday could be improving partner profits. Every time slip, accounting entry, and financial record is a potentially valuable piece of data.
When data rests in your billing system, accounting ledger, or bank statement, it remains nearly worthless. When you harness this data into analytics – you’ll improve your firm’s cash flow.
Law Firm Analytics – A Primer
Analytics provide three primary benefits:
- Higher profits per partner
- Visibility over the business
- Identifying “red flags” before they become full-blown business issues
Improving profits per partner
Reviewing financial reports is rarely one’s favorite responsibility. Boilerplate reports from billing systems, accounting ledgers, and banks can be exhaustive and hard to understand. More importantly, they rarely make you money.
Quality analytics that are customized for your law firm will make your life easier. Analytics that are concise, easy to understand, and prudently-constructed will improve profits per partner by:
- Increasing attorney utilization
- Reducing time written-off
- Improving collections
- Identifying “red-flags” before they become full-blown business issues
Analytics enhance visibility
Good analytics provide crystal-clear, unbiased visibility. Knowing which cases and associates are driving economic disruption is a critical first step in taking corrective action. From the moment a client walks into the door to the day their matter is resolved, managing partners should know:
- The retainer is sufficient
- Work is completed on-time
- Costs are within budget
- A/R balances are paid on-time
Identifying red flags
A law firm’s analytics will often prevent an emerging business issue from becoming a full-blown crisis. Are your flat-fee matters on-budget? Are each of your associates achieving utilization rates that maximize partner profits? Are your retainers sufficient, or are there individual cases that are weeks away from causing a financial disruption in your firm?
Your law firm’s analytics should highlight specific deviations in the metrics that matter most to your firm. If you know about emerging financial issues as they happen, you’ll be able to take corrective action rather than having to constantly “fight fires”.
Law firm analytics improve profits per partner
Leverage the data that lies dormant in your billing system, accounting ledger, and bank statements. Analytics will save you time & make you money.
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Whenever someone says they want to “manage” something, I cringe.
I immediately ask myself, is there a better word? After all, words matter. The words we chose carry deep significance, not just because of their inherent meaning, but because they give insight into our actions. They cast light on our motivations.
So when people tell me they’re going to manage something (or even worse, manage-through something), I immediately try and discern whether they’re setting themselves up for failure.
After all, ownership breeds success. Management reeks of passivity.read more