09.11
V13.N06
The Journal of Legal Marketing
Law Firm Key Performance Indicators
A Primer
How to Intelligently Run a Law Firm
Dude, Wheres My ROI?
KPIs for Email Marketing
What Am I Worth?
Managing with Key
Performance Indicators
Managing with Key
Performance Indicators
Strategies
09.11
V13.N06
The Journal of Legal Marketing
CONTENTS
Fr:+urrs
Mike Mabey and Stephen Mabey
Law Firm Key Performance Indicators A Primer .......................................................... 4
Fred Quenzer, JD
How to Intelligently Run a Law Firm............................................................................ 8
Jamie Diaferia
Dude, Wheres My ROI? The Value Conversation That Actually Pays Dividends ...............10
Daniel Weglarz, JD
Measuring Email Marketing Success ...............................................................................12
Aria Vaida
What Am I Worth? Key Performance Indicators for Solo Marketers ..................................14
Paul M.W. Hackett, Ph.D., and Yulia S. Sovenkova
Not All KPIs are Equal: Understanding the Interacting Role of KPIs Through
the Use of a Mapping Sentence ......................................................................................16
Donald Aronson
Quant or Qual? KPIs Require Both .............................................................................18
Drr:r+xrx+s
Presidents Podium, Jeanne Hammerstrom ............................................................................. 2
About This Issue, Silvia Hodges ......................................................................................... 3
Dicta, Marketers on the Move .......................................................................................21
Ask the Authorities .......................................................................................................22
Message from the Editors, Steve Conley & Melissa Ho ..........................................................24
Eii+ori:i Bo:ri
Co-Executive Editors
Steve Conley
Freelance Writer/Reporter
Boulder, Colo.
Melissa Ho
MBH Strategies
Kirkland, Wash.
Editorial Board Members
Carol Alfred
InsideCounsel
Washington, D.C.
Marguerite G. Downey
Adduci, Mastriani & Schaumberg LLP
Washington, D.C.
Brian Hickey
CJP Communications
New York, N.Y.
Joe Calve
Morrison & Foerster
New York, N.Y.
Dr. Silvia Hodges
Fordham Law School
New York, N.Y.
Julie Meyers, Esq.
Burns, White & Hickton
Philadelphia, Pa.
Leesa Petrie
Fenwick & West LLP
Mountain View, Calif.
Dave Poston
Poston Communications
Atlanta, Ga.
Stephanie Richter
Williams Venker & Sanders LLC
St. Louis, Mo.
Anisa Salam
BD&M Consulting
Redondo Beach, Calif.
Managing Editor
Theresa Wojtalewicz
Chicago, Ill.
Assistant Editor
Frances Moett
Chicago, Ill.
Art Director
Bill Wargo
SmithBucklin Corporation
Chicago, Ill.
Graphic Designers
Steve Biernacki and Patrick Williams
SmithBucklin Corporation
Chicago, Ill.
Strategies
The Journal of Legal Marketing
By Jeanne Hammerstrom, LMA President
Prrsiirx+s Poiiux
Its Up to You
to Collaborate
N
o silos. No cowboys. We are a team! In my more than 20 years
working in legal marketing, this mantra of teamwork is one Ive
chanted the most. Its also one of the most dimcult mindsets that
trms have had to embrace to be competitive.
Teamwork and collaboration between marketing departments and other op-
erating units are essential for success. One of my philosophies for success is to
surround yourself with good people. To the extent that I am able, I apply this
philosophy when working with other departments at my trm. Here are the key
departments you should be working with at your trm:
1. A solid partnership between the IT and marketing departments at law trms is
critical for trms to dinerentiate themselves and to streamline processes for both
our external and internal clients our attorneys. At my trm, my department
meets almost daily with IT to brainstorm ideas to simplify processes and invent
creative solutions, which has resulted in our best trm processes and technologies.
2. Take advantage of your trms human resources and recruiting departments.
Lawyers and stan join or become involved in the trm every day, and rela-
tionship issues arise. Marketing departments should act as the public relations
arm, providing a new perspective and helping leverage their services. At my
trm, these departments regularly help us provide valuable information for client
pitches and RFPs. We can help to brand, simplify and execute the processes and
programs that may challenge them.
3. Legal marketers rely heavily on the accounting department in order to know
which practice areas of the trm are prottable and which need more assistance in
marketing and business development. The same is true for our client base. Our
close relationship with this department makes our service to attorneys and cli-
ents more valuable. Working with accounting allows marketers to get a clearer
picture of the future and to avoid pitfalls from the past.
4. LMAs service providers are crucial to successful law trm operations. Several
LMA service providers have helped my trm establish great internal collabora-
tion. Whether youve introduced new business intelligence software or provided
professional development training, you are just as instrumental in our depart-
ments working successfully together.
5. Just as important as those working in your trm are the ones who dont
your LMA community. Participation in LMAs local chapter events, educa-
tional opportunities or shared interest groups are a vital part of your professional
success overall. Collaborating with your LMA peers and fellow members can
lead to unlimited opportunities that can enhance your success and promote
career growth.
Whatever your trms initiatives are, you will tnd yourself at a great advantage
if you surround yourself with those in other operating departments and your
LMA community. With the challenges of todays business world, having an
open mind and working collectively can make you more strategic, competitive
and valuable.
LMA Bo:ri or Dirrc+ors
President Jeanne M. Hammerstrom
Benesch, Friedlander,
Coplan & Aronon LLP
Cleveland, Ohio
Immediate Past President Nathan Darling
Van Ness Feldman
Washington, D.C.
President-Elect Alycia Sutor
Akina Corporation
Oak Park, Ill.
Secretary Laura Meherg
Wicker Park Group
Birmingham, Ala.
Treasurer Rachael W. Loper
Nixon Peabody LLP
Washington, D.C.
Treasurer-Elect Timothy B. Corcoran
Hubbard One, a division
of Thomson Reuters
Lawrence Township, N.J.
Members-at-Large Per Casey
Tenrec, Inc.
San Francisco, Calif.
Aleisha Gravit
Akin Gump Strauss
Hauer & Feld LLP
Washington, D.C.
Despina C. Kartson
Latham & Watkins LLP
New York, N.Y.
Leesa Petrie
Fenwick &West LLP
Mountain View, Calif.
Maggie T. Watkins
Best Best &
Krieger LLP
San Diego, Calif.
Judith Weingarz
The Interlex Group
Chicago, Ill.
Chapter Presidents Jennifer Reynolds Larivee
Committee Liaison Akin Gump Strauss
Hauer & Feld LLP
Los Angeles, Calif.
Executive Director Betsi Roach
LMA
Chicago, Ill.
The Legal Marketing Association (LMA) is a not-for-
prott professional association serving the needs and
maintaining the standards of those involved in mar-
keting for the legal profession. Advertisements are not
an endorsement by the Legal Marketing Association.
Strategies (ISSN 1099-0127) is published eight times
per year for $80 by the Legal Marketing Association,
401 N. Michigan Avenue, Suite 2200, Chicago, IL
60611, www.legalmarketing.org. Periodical postage
paid at Chicago, Ill., and additional omces. Postmaster:
Send address changes to Strategies, c/o LMA, 401 N.
Michigan Avenue, Suite 2200, Chicago, IL 60611.
Strategies is distributed to LMA members as a professional
development tool for those involved in law trm market-
ing. In addition, it is distributed to others who support
and write about this industry. The annual subscription
fee is included in LMA members dues. The views ex-
pressed herein are not necessarily those of LMA. Strategies
is copyright protected and is not to be reproduced in
any form without written permission from the Legal
Marketing Association. Article reprints are available by
calling Theresa Wojtalewicz at LMA at 312/673.5870.
An additional fee will be charged for this service.
2011 Legal Marketing Association
Legal Marketing Association
401 N. Michigan Ave., Ste. 2200
Chicago, IL 60611
312/321.6898
www.legalmarketing.org
By Silvia Hodges
Aiou+ Tnis Issur
Sizing Up for
Success
:
i
v
r
r
+
i
s
r
r
i
x
i
r
x
ALM: Corporate Counsel 212/545-5987 . . . . . . . . . . . . . . . . . . . . BC
George Washington University www.gwu.edu . . . . . . . . . . . . . . . . 15
Gittings www.gittings.com . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Greeneld Belser www.greenteldbelser.com . . . . . . . . . . . . . . . . . . 23
Hellerman Baretz www.hellermanbaretz.com . . . . . . . . . . . . . . . . . . . 9
InsideCounsel www.insidecounsel.com . . . . . . . . . . . . . . . . . . . . . . . 19
LMA Conference www.LMAconference.com . . . . . . . . . . . . . . . . . IBC
The Closers Group www.closersgroup.com . . . . . . . . . . . . . . . . . . IFC
Vizibility http:/vizibility.com . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Find out how your company can benett from advertising in Strategies.
Contact Kris Wolcott, 312/673-4722.
Not everything that is countable counts, and not everything
that counts is countable.
W
hat gets measured gets done is said to be one of the core prin-
ciples of good management and leadership. Hence, we measure
nearly everything in law trm marketing. After all, how could
anyone argue with cold, hard facts? Even the most hard-nosed litigator is un-
likely to win a battle if you are armed with numbers.
Key Performance Indicators, or KPIs, are a jargon term for an approach to
measuring performance. KPIs help manage complexity to drive performance
improvement. Before 2008, the legal industry had to worry relatively little about
complexity in regard to their service onering, organization and process. This is no
longer the case. KPIs are increasingly used to evaluate a trms success or the success
of a particular activity. Success can be detned in terms of making progress toward
strategic goals or the repeated achievement of some level of operational goal.
When selecting KPIs, you need to think about your trm and departments goals.
What are these goals? What is important to your organization? Today, it is often
identifying ways to reduce costs and create nexibility so trms can adjust to a new
normal. The articles in this issue of Strategies magazine will provide you with lots
of food for thought and heated discussions in your trms, I hope on what
you can and should measure.
Please keep in mind that picking the right KPIs is only the start. We measure lots
of things, but that doesnt mean that things really change. The challenge is using
data to change behavior, enhance systems and have a robust process to interpret and
apply data for continuous improvement.
Best of luck with your quest for performance!
Dr. Silvia Hodges teaches marketing and management at Fordham Law School in New
York. Prior to joining academia, she worked as an in-house legal marketer. As a speaker
and researcher, she focuses on how clients buy legal services and cross-cultural/international
challenges of law rms. Hodges can be reached at hodges@silviahodges.com
By Mike Mabey and Stephen Mabey
Law Firm Key
Performance Indicators
A Primer
Revenue per square foot
Revenue per employee
Revenue per matter
Percentage at point of billing
Operational KPIs:
Billable hours per full-time equivalent timekeeper (FTE)
Percentage of partner hours
Billings per FTE
Average bill rate
Average work rate
Ratio of billed-to-work rate
Number of matters opened
Stamng ratio
Number of billable hours per legal assistant FTE
Cost recovery revenue per matter
Marketing and Business Development
Firms are still in the early stages of exploring marketing and
business development KPIs to understand what will work
best for them. A trms strategic focus will impact its selec-
tion of KPIs: Transaction-focused trms will have dinerent
KPIs than relationship-focused trms. Other factors, such as
whether your trm is focused on new business or on retention
of existing clients, will also play a role in your trms selection
of marketing KPIs.
The following list of possible KPIs for marketing and
business development in law trms is not intended to be
exhaustive; rather, it presents examples of KPIs you might
consider adopting and adapting for use in evaluating your
trms enorts:
Client Growth Rate: The ratio of the number of clients
the trm handled its trst matter for in the past 12 months
to the total number of active clients (active can be detned
as having handled a matter for in each of the past two of
three or three of tve years).
Dormant Client Percentage: The ratio of the number
of clients that trm has not handled a matter for in two of
the past three or three of the past tve years to the number
of total clients.
Average Fee per Client: The fee revenue for the year
divided by the number of clients billed during the year.
continued on page 6
L
aw trms of all sizes measure various behaviors and indi-
cators of trm health and performance. These indicators
are important sources of information for the manage-
ment of the trm and its stan. The challenge is to identify the
subset of these metrics that are critical to the success and life
of the law trm and then focus on these metrics, which are
referred to as key performance indicators, or KPIs.
When choosing KPIs, your trm should consider that the
KPIs must:
renect the trms strategy and goals;
be seen as key to the trms success; and
be quantitable.
All KPIs should be trm specitc but also taken in context of
an industry-level view.
No trm uses all KPIs.
Every law trm should identify the KPIs that are important to
the trm and its detnition of success and put in place a system
for tracking and using these metrics to guide trm strategy.
No one KPI tells the full story; rather, KPIs must be viewed
collectively to ensure the trms decisions are made on an in-
formed basis. For example, if your trm has a strategic focus on
specitc client relationships and supports that focus with client
teams, then perhaps the following KPIs might be important in
measuring the breadth of the relationship:
The number of matters per client as an indicator of growth
in the client relationship;
The number of practice areas that serve these clients as an
indicator of cross-selling success; and
The number of lawyers with time on matters connected
to this client, as it measures the breadth and depth of the
relationships between your trm and the client.
Function-Specitc KPIs
KPIs typically have focused on the tnancial and operational
aspects of law trms.
Financial KPIs:
Unbilled days
Uncollected days
Net income as a percentage of revenue
Average net overhead
Stand Out. Bring Business In.
You only get one rst impression.
The Vizibility personal branding service allows law rms
to proactively control, organize and share the online
identities for their legal professionals. Make it easy for
clients and prospects to instantly access your attorneys
curated Google results, hand-picked online professional
proles, mobile business card
and more. Get alerts when
theyre searched or when
their QR code is scanned.
QR codes are a sign of a savvy attorney.
More than 30% of legal marketers are already using
QR codes, and another 50% plan to use them within
the next 12 months. With Vizibility, QR code manage-
ment has never been easier. Our rst-of-its-kind QR code
management tool helps you easily setup and manage
the online identities of any number of professionals.
Congure and download QR codes, update mobile
business cards, monitor usage, standardize on one
experience and more.
Avoid mistaken identity online.
Win the business.
Attorneys from leading rms are using Vizibility, such as
Duane Morris, Lowenstein Sandler, McCarter & English,
Novak Druce + Quigg, Nutter McClennen & Fish,
and more.
Call 866-380-3400 x150
Visit vizibility.com
Email solutions@vizibility.com
2011 Vizibility Inc. U.S. Patents 7,831,609 and 7,987,173. Other Patents Pending.
QR Code Study: Adoption and
Usage by Legal Marketers
Contact us for a complimentary
copy of the results.
Average Fee per New Client: The related fee revenue for the year divided
by the new clients (of clients that the trm handled its trst matter for in the past
12 months).
Marketing Budget Ratio: The ratio of the total marketing spend (including
salaries) to the total fees billed during the year.
Business Development Ratio: The ratio of the business development spend
for the year to the total fees billed during the year.
Marketing Cost per Client: The ratio of the total marketing spend (including
salaries) to the number of clients billed during the year.
Business Development Cost per Client: The ratio of the business develop-
ment spend for the year to the number of clients billed during the year.
Average Fee per Matter: The fee revenue for the year divided by the number
of matters billed during the year.
Average Fee per New Matter: The related fee revenue for the year divided
by the number of matters billed for new clients (handled its trst matter for in
the past 12 months).
Client Retention: The ratio of clients billed in the last 12 months to the total
clients that had been billed in the 12 months prior to the last year.
Growth in Top Clients: The ratio of fees billed to top 100 clients (number
can be adjusted to size of trm) in the past 12 months to the fees billed to the
top 100 clients in the prior 12 months.
Practice Areas per Client: The number of individual practice groups billed
to clients on average.
Number of Lawyers per Client: The ratio of individual lawyers who gener-
ate working fee credits billed to clients on average.
Number of Matters per Client: The ratio of number of matters billed to the
number of clients billed.
The importance a trm places on specitc KPIs can and will change over time. How
the trm uses them should not change.
... factors, such as whether your rm is focused on
new business or on retention of existing clients, will ...
play a role in your rms selection of marketing KPIs.
Challenges to Using KPIs
Utilizing KPIs to assist in making businesslike decisions does
have its challenges, including the following points:
Finding a relevant external benchmark against which to
compare your trms KPIs so it has real meaning and ap-
propriate strategies can be developed.
Most law trm accounting software packages dont lend
themselves to generating the information in a timely fash-
ion (if at all).
Misinterpreting KPI results and overreaction to short-
term variations in results.
Keep in mind that context is critical to the enective use of
KPIs. An excellent way to do this is through benchmarking,
comparing your trms KPI results against the same KPI for
other organizations. The trouble is that access to benchmark-
ing data in the legal profession is limited. Several national
sources of benchmarking include the following indexes:
Strategies: The Journal of Legal Marketing, September 2011, V13.N06 | 7
Lexis