Your Financial Dashboard

AT THE OUTSET, it's important to establish some context for the subjects we cover in this article to maximize what you learn and minimize any stress brought on by the topics of performance analytics.

Stephen Mabey Author
Stephen Mabey, CA
Principal & Managing Director

Colin Cameron
Colin Cameron*
Founder, Profits for Partners

A financial dashboard for a law firm works on the exact same principle as the one in your vehicle. You don't drive your vehicle by watching it alone; rather, it helps you know how you are progressing in getting to your desired destination.

Law firm financial dashboards should focus management and partners on those key performance indicators (KPIs) that are critical to the success of the firm. Because we tend not to use that which we don't understand, the presentation of the information must be in a style—that combination of words, numbers and graphs/charts—that is most meaningful to the audience. As with a car dashboard, too many gauges simply distract and lessen their value—and warning lights may be ignored until it's too late.

Converting indicators to KPIs

When a group of lawyers get together, it's not uncommon to hear them talk about indicators, some of which your firm may track and some you likely have no earthly idea what they are talking about. This is no cause for panic. No firm will use all of the potential analytical measurements of law firm performance, no matter how large or small the firm. One of the key reasons for this is the importance firms place on specific KPIs, which will change over time as the firm changes and evolves.

So the question is, what makes one or more of the various performance indicators change from being “that's nice” to a key performance indicator for your firm? An indicator should meet the following three criteria to qualify as a KPI for your firm:


The rest of this article is available in Stephen Mabey's new Book

Book Cover - Leading and Managing a Sustainable Law Firm - Tactics & Strategies for a Rapidly Changing Profession by Stephen Mabey

Available for purchase on BookBaby.

 

 

 

 

*Colin Cameron is the founder of Profits for Partners Management Consulting Inc., which provides strategic profit-focused advice based on over 25 years of executive management and consulting experience with law and professional service firms.

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This was first published in the ABA's Law Practice volume 39, No. 5
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