It's Time to Update Your Law Firm's KPIs

November 9

What are KPIs?  And how can they guide the success and improvement of your law firm?  

Of all the metrics that speak to your law firm’s financial and operational health, KPIs speak the loudest. Even if your firm does not currently have an advance reporting system in place, you can start now by incorporating the suggestions and new-and-improved KPI metrics outlined below. In doing so, you will be able to reshape how you view productivity and efficiency at your law firm. 

Of all the metrics that speak to your law firm’s financial and operational health, KPIs speak the loudest.

Target_vector_Icon-656x6561. Get More Accurate. 

With recent hikes in turnover and hiring struggles across the country, you might be thinking about your staffing headcount more frequently.  But headcount may not be very informative at the end of the year when you know you had 35 attorneys pass through your doors but only about 20 of them were there at any given time. Instead of headcount, we recommend Full-Time-Equivalency, or FTEs, for their higher accuracy.


FTEs are a proportion of a time period. E.g., If an employee was present half the year, the FTE is 0.5 years. For example, you might have had a total of 30 attorneys this year but due to turnover, only 23.7 in FTEs. FTEs are a better representation of your firm’s revenue-producing capacity because they take into account not only how many people you have, but how much time they spent at your firm as well.


You can also use FTEs to help you scale your metrics down to a per-person level to make them easier to understand and more effective. For example, we recommend calculating KPIs like Billable Hours Per FTE and Overhead Per FTE.


  1. Make Comparisons in Proportion to Your Firm.
    Expenses don’t exist in a vacuum. They exist in the context of firm size and productivity. How can you tell if you are spending too much when budgets look different for every firm? Try to get some perspective using percentages.

For example, the next time you want to tell if an attorney’s salary is fair, don’t just look at annual salary plus bonus. Divide their payroll by billings and/or collections to take into account their productivity. Typically, 30-35% of collections is healthy, but there are exceptions, such as for rainmakers.

You can also analyze other expenses in this fashion – for example, “Office Expenses as a % of Fees Billed” or “Benefits as a Percent of Payroll,” but keep in mind that the benchmarks differ from metric to metric.


  1. Operational, Not Just Financial.
    Are you looking at the same three tired old stats over and over again? For example, billed hours, rates, and collections? Step up your game using operational KPIs. These will help you better understand your employee productivity, firm’s procedural efficiency, employee satisfaction, client satisfaction, firm’s ability to attract clients, and much more. 





Case count

Number of days the average file  is open

Assignments/tasks completed per timekeeper

Open cases vs. closed cases

Number/rate of files opened and          closed    

Staffing efficiency

(over- vs under-utilized employees)

Not sure where to begin?  Check out our starter list:

One of the most difficult parts of developing a business approach driven by data is deciding what to measure in the first place.  This KPI starter list is a great place to begin:  









Track how well you fuel your revenue machine

Billable Hours Per FTE

Measure attorney productivity



Payroll % of Collections

Puts costs into perspective

Icon_Money_Bag_white-1 Overhead

Total Overhead Per FTE




Profit % of Collections

Puts profit into perspective



Marketing-Icon_Gears_white-2 Operational

Average days files are open

Understand case handling efficiency

Average time spent on a case

Utilization rate (billable vs non-billable hours per timekeeper)

Watch out for employee burnout and turnover

Timekeeper % of time spent in overutilized, healthy and underutilized state

Workplace Satisfaction

Turnover Rate per year

Icon_Idea-3 Marketing

New/active clients versus lost clients

Track and compare firm workload and revenue stability across time periods.

Understand firm ability to generate new revenue. Forecast revenue generation

Client retention rate





WATCH:  WEBINAR: Advanced Reporting & KPIs Can Transform Your Law Firm





Financial and Operational KPIs Your Law Firm Can Track Right Now-1

READ:  Financial and Operational KPIs Your Law Firm Can Track Right Now







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