Law Firm KPIs: 29 Metrics To Track for Measuring Success

As a lawyer, how do you measure success? You know you’re an expert and you’re great at winning cases, but how do you know you’re hitting targets, making a profit, and providing the best possible service to your clients?

Going data-driven is a great way to help your law firm or in-house legal department identify areas of improvement and scale up for future matters. 

Law firm KPIs, or key performance indicators, help you ensure your firm’s performance is consistent, competitive, and always growing.

However, there are lots of KPIs you could track over time. How do you know which are the most valuable for your firm?

In this guide, we explore how you can start building success from a custom KPI plan.

What Are Law Firm KPIs?

Law firm key performance indicators (KPIs) are data-driven metrics lawyers use to measure their progress toward specific goals and targets and gain a better understanding of what their goals should be.

They could track the number of clients they take on, the revenue they generate, their actual spend on costs and bills, and the average processing time of files and contracts.

Why Are KPIs for Law Firms Important? 

Data-driven KPIs for legal departments play a vital role in helping them confidently measure performance, efficiency, profitability, contract quality, and productivity. Tracking KPIs gives legal teams actionable insights and clear roadmaps to scale up and improve service delivery.

By measuring law firm KPIs:

• It’s easy to measure your performance objectively
• You can hold employees and partners accountable
• It’s easy to assign lawyers and track projects
• You can make informed decisions on complex problems
• You can identify areas of strength and weakness in your team 
• It’s easier to spot which members of your team need support

29 Legal KPI Metrics To Measure and Track

When it comes to legal department KPIs, one size never fits all. Therefore, it pays to experiment with different data while your firm grows.

At least initially, smaller law firms benefit from prioritizing client acquisition and growth KPIs. 

Therefore, once you’re better established, you could prioritize marketing targets before switching to performance-focused, larger law firm KPIs.

Depending on your structure, you stand to gain more valuable insights through tracking a wide variety of legal KPIs. A large firm or in-house legal team could benefit, say, from measuring its performance alongside marketing and financial KPIs. 

This way, it can continue striving for excellent service while driving regular client conversations.

Although 70% of law firm operators believe data analytics is important for commercial success, only 36% are data-driven in practice. 

There’s an opportunity for your firm to become more efficient than two-thirds of the competition.

Legal metrics: 7 KPI categories for law firms

Below, we categorize each of our 29 recommended legal team key performance indicators into seven different categories:

1. Financial (e.g., how much revenue are you making?)
2. Client satisfaction (e.g., how many clients do you retain?)
3. Marketing (e.g., which marketing channels drive the most paying clients?)
4. Client growth (e.g., how many cases do you work each quarter?)
5. Productivity (e.g., how many billable hours do you work?)
6. Individual performance (e.g., how many cases does each lawyer close?)
7. Company culture (e.g., what’s your lawyer turnover rate?)

Now, let’s use these categories to guide us in our exploration of each KPI for legal departments.

Law firm financial metrics (1 to 5)

Measuring the financial metrics of your law firm or in-house legal department, such as profitability, cost-effectiveness, and expenditure, is key for judging its health.

Law firm profitability metrics give you a clear picture of your income and whether you need to attract more valuable clients. They also tell you if you’re chasing more money than you receive.

Some important law firm financial metrics to measure might include:

1. Monthly revenue: How much revenue do you bill from your services rendered? What’s the estimated average value of each case? Does this increase or decrease month by month?

2. Billing realization: How many billable hours are you working in line with your monthly revenue? Do you need to increase your rates or improve your process efficiency?

3. Monthly expenses: What is the total cost of your monthly expenditures? Are you making a profit after subtracting this from your realized revenue, and do you need to cut back and reduce costs?

4. Accounts receivable outstanding: How much legal spend are you owed by clients? Does this increase or decrease monthly? Should you increase efforts to pursue non-paying clients?

5. Run rate: What’s your projected annual revenue? How does this compare to annual revenue from years past? Is it clear you need to bring in more money?

Client satisfaction legal department KPIs (6 to 9)

It’s easy to assume that a case closed means a satisfied client. However, they might leave you a poor review or suddenly stop working with you. Yes, this round of legal matters is settled, but at what cost to the client if they’re unsatisfied?

Many attorneys don’t measure their firm’s performance on customer satisfaction, instead focusing on hours accrued. This could cause the client to turn to outside law firms for future matters.

However, measuring client satisfaction by tracking KPIs helps you understand how to improve the performance of your legal department and whether or not you’re attracting valuable clients.

You could measure the following KPIs:

6. Survey scores: What do your clients say about your practice, your legal team’s expertise, and their handling of their cases? You could use anonymous score forms to get an objective view of how people view your firm.

7. Retention rates: If you work with people long-term, how many clients stick around for more than three months? What’s the average client retention period – and is this increasing or decreasing over time?

8. Client referrals: How many new cases and clients are you welcoming based on word of mouth? If this is decreasing over time, could you do more to encourage referrals or go the extra mile for your clients?

9. Star ratings: Similar to survey scores, what are your average star ratings on public review boards such as Google Business or in legal directories? Is there any action you can take to improve the scores?

Marketing KPIs for law firms (10 to 14)

Law firm marketing metrics give you valuable insight into whether you’re wasting money and resources on advertising and whether you need to change how you pitch to prospects.

Tracking these legal department KPIs tells you which channels drive the most return on investment (ROI) and if any need more attention.

Here are some examples of law firm marketing KPIs:

10. Landing page conversions: How many people visit your website’s landing pages and click through to book calls? You could use call tracking to measure which pages drive the most contact.

11. Email marketing conversions: How many people on your email or newsletter list click to learn more? Perhaps you could make your marketing emails more engaging or enticing.

12. Social media engagement: How many paying clients arrive through social media posts? Are certain channels and post types more profitable than others and, therefore, worth prioritizing?

13. Marketing influence: How many new clients are directly influenced by your monthly marketing? You could run A/B tests to see if certain efforts drive people into your business.

14. Website traffic: How many people visit your law firm’s website every month? Do they mostly visit from organic keywords in search results or through paid advertising? Could you improve your website’s visibility in either case?

Client growth legal department KPIs (15 to 18)

Client acquisition KPIs tell you how much you spend on building up new customers and where they’re coming from. There might be some overlap with marketing KPIs.

Measuring this type of law KPI can help you prioritize acquisition channels and learn more about the behavior of your highest-paying and longest-retained clients. In-house legal teams don’t need to worry about this when they’re employed by their client directly.

Consider tracking the following key performance indicators in this section:

15. Number of consultations: How many people agree to consultation appointments with you monthly? Could you improve this by making your online messaging more direct or appealing? Are you targeting the right people?

16. Number of clients acquired: How many new paying clients do you welcome monthly? Do you need to acquire more each month to balance out turnover better?

17. Consultation conversions: How many warmed-up clients attend consultations? Is this number increasing? Could you do more to engage with prospects or establish trust?

18. Client conversions: How many of your consulting clients convert into paying customers? If this number decreases, again, could you be more engaging in consultations?

Law firm productivity metrics (19 to 21)

When you measure a legal department’s performance through productivity, you incentivize them to work as many billable hours as possible. After all, research shows the number of billable hours lawyers work per month has decreased hugely in the past decade:

Source

Therefore, measuring the right metrics helps you find inefficient processes where your employees might be wasting time on non-profitable work.

You could use the following productivity KPIs:

19. Billable hours: How many paid hours do your employees work each month? Is this increasing or decreasing with new client intake?

20. Billable hours vs. hours worked (utilization): How many hours of your team’s work are billable, such as for general counsel or drafting contracts? Are your lawyers spending more time on non-productive work and low-priority admin?

21. Expenses per case: In addition to monthly expenses calculated within the financial KPIs above, are expenses per case increasing? Could you find ways to cut back and save costs?

Individual lawyer KPIs (22 to 26)

Tracking individual lawyer KPIs helps you understand who’s working the most cases, bringing in the most revenue, and receiving the most positive feedback.

These KPIs help you understand where there might be training needs for specific employees or if there are trends between contracting a freelance lawyer and hiring an in-house lawyer. These targets help you prioritize the most talented employees and better support others.

Using specific KPIs to track performance is becoming increasingly popular. Research shows that 90% of corporate law firms measure individual performance, compared to 75% in 2015.

Consider tracking the following sample KPIs for legal departments: 

22. Cases and billable hours worked: Which employees are working the most cases? Who works the most billable hours and are the most productive lawyers in your firm? Are there some employees who need training or more encouragement?

23. Expenses per case: Which lawyers are generating the most expense per case? Do some employees have larger expense-to-revenue ratios than others? Is there a need to re-establish expense boundaries?

24. Non-billable hours: ​​How many hours does each employee spend on non-billed work? Who has the largest non-billable-to-billable ratios in the firm? Could this present further training opportunities?

25. Average survey scores: Which employees have the highest individual average scores from clients? Are any employees referred to new clients more frequently than others? Do those with the lowest scores have any training or support needs?

26. Revenue per employee: Which employees bring the most money into your firm? Why might this be the case? Is it related to the cases they work on or how they handle them?

Law firm culture KPIs (26 to 29)

Law department culture KPIs help you understand how your company appears to employees and clients. Measuring culture can help you retain the best employees, boost client satisfaction, and even improve conversion rates from setting consultation appointments to providing legal services.

After all, the more positive and supportive your work culture is, the more proactive and engaging your team is with your clients. That’s also a positive boost for your reputation, meaning you can expect more referrals and better quality clients.

You could measure the following culture KPIs:

27. Employee turnover: How many employees leave your business over the last quarter? How does this compare to the number of people you hire? 

You can always expect some turnover beyond your control – after all, top American law firms experience an average annual turnover of around 26%. However, it’s still worth examining the data to see if there are any concerning trends.

28. Employee tenure: What’s the average time for employee retention at your company? Is this increasing or decreasing? Are there any correlations between tenure and hiring sources?

29. Satisfaction scores: Based on anonymous employee reviews and scoring, how satisfied are people when working for you? What areas need the most improvement?

How To Pick Key Performance Indicators for Your Law Firm

It’s easy to assume that choosing all the above KPIs is the best route toward data-driven success. However, your legal team’s needs differ greatly from those of others. 

We suggest a tailored, individualized approach. dNOVO’s experts, for example, build custom action plans for each client. 

For instance, we understand that smaller firms might need to focus on marketing and lead generation, while larger firms might need to boost their client retention and reduce unnecessary costs.

Moreover, larger and more successful firms may not think it’s necessary to track KPIs for marketing – some simply want to retain clients for longer. 

In-house legal departments for larger companies might be more focused on individual performance and employee retention of their in-house lawyers.

Steps for choosing specific KPIs to track

Measuring so many data points can get confusing and even frustrating. Therefore, we recommend following these steps to decide which KPIs are worth focusing on:

1. Be clear on your objectives. What are your most important short- and long-term goals? Be realistic and follow the SMART formula (set specific, measurable, achievable, relevant, and time-bound targets).

2. Look at your current data. Based on these objectives, how is your firm currently performing? Look carefully for downward trends in your employee, case, and financial data, and prioritize these points.

3. Plan to access the data you need. Depending on your goals, you might not have all the data you need to measure success. You could start creating and delivering questionnaires at the end of cases and consultations.

4. Plan for software. It’s worth investing in software for tasks such as litigation management to break everything down into simple, actionable chunks. For example, you could work with a marketing agency offering a law firm KPI dashboard and direct advice.

Consider, too, that 70% of professionals at large law firms use analytics regularly. It’s the norm.

5. Don’t focus too much on the financials. Yes, law firm success is typically measured by revenue, but be careful to measure lawyer and client satisfaction. It’s worth measuring these KPIs to understand how people perceive your business.

Let’s consider two scenarios with legal department KPI examples. Remember, your practice area and the size of your firm dictate the legal KPIs you should measure. For instance, you’re unlikely to measure client tenure if you run an injury law firm.

Scenario one

A small accidental injury law firm is just starting, and its owners want to measure marketing effectiveness to build a reliable funnel of warmed-up clients.

They could start by measuring their social media engagement, such as Facebook likes and clicks from posts. They could then use agency analytics and tools such as Meta Business to make custom reports of how many people engage with their posts, click through, and make calls.

This way, they set achievable goals for social media reach. For example, they might decide to focus on Facebook and increase clickthroughs and conversions by a certain percentage. 

Alternatively, they could ask a marketing agency to help them measure which landing pages drive the most clicks and conversions each month through Google Analytics. 

With these valuable insights, they could finally redirect their attention to creating relevant content, such as around motor accidents or workplace injuries.

Scenario two

A large copyright law firm oversees steady revenue from legal spending and good client retention but very little financial growth.

Given this firm’s solid reputation and client base, it might be wise to consider productivity sample KPIs for its legal services departments, e.g., whether or not lawyers are spending too much time on non-billable work, restricting their profit potential.

They could track the time lawyers spend on billable hours vs. non-billable admin using time-tracking software and asking employees to log their work. 

If there’s a clear lean toward unbilled hours, the company might try to improve its average processing time so there’s less time wasted on unbilled work. For instance, they could use legal AI and automation to cut out lengthy administrative tasks.

Other KPI metrics, such as tracking expenses vs. income, could help the legal team boost profits and cost-effectiveness. In this case, the firm could use financial analytics tools to break down money coming into the business and money leaving.

Finally, the firm’s owners could re-evaluate marketing costs and run incremental analyses, especially if word of mouth remains positive and retention and tenure are high.

How To Use Law Firms KPIs

Now that you know some legal department KPIs to track and how to narrow down your options, let’s focus on how to use them in practice with some examples.

Putting legal KPI metrics into practice

1. Set clear goals and choose KPIs to measure them: You could decide to improve your legal team’s performance by measuring billable hours worked and average survey scores.

2. Set unique, achievable targets to measure with your KPIs: Look at your current survey scores and hours worked, and set new SMART benchmarks.

3. Start collecting data and measuring your KPIs: Send your clients surveys, record individual ratings, and use a KPI dashboard to measure billable hours worked per employee.

4. Regularly check your KPIs and set a final checkpoint: As part of your SMART goal, decide the timespan you want your team to improve and set checkpoints to reassess data.

5. Assess the results and decide what action to take: Check individual scores and compare them to your previous performance data. If any employees appear to struggle compared to others, prioritize their training and development.

6. Repeat the cycle after taking action and measure your progress regularly.

Use Law Firm KPIs and Make More Confident Decisions

Using law firm KPIs is a measurable, objective way to identify trends that ensure your company builds a profit, provides exceptional client service, and continues to grow in your industry.

With KPIs, you have a wealth of data that answers some of the most complex questions you face when running a law firm. 

Instead of building marketing plans on assumptions, harness the power of critical data and start making concrete, informed decisions.

When you work with a law firm marketing agency, it’s even easier to pick and measure legal KPIs beneficial to your growth. Likewise, in-house legal teams can cooperate with other departments of their company to determine the right legal KPIs

With dNOVO, you have a team of experts by your side to not only brainstorm KPIs but who can also help break down the data along the way. Contact us to learn more about getting started.

Want additional resources about scaling up your law firm’s success by going data-driven? Read our guide to law firm growth strategies.

Legal Metrics FAQs

Let’s close our guide to legal metrics and KPIs with a few commonly asked questions.

What is a KPI for lawyers?

A KPI (key performance indicator) is a metric that helps you measure certain areas of your company’s health. For example, you could measure your firm’s financial health by tracking revenue, income, and billable hours.

Lawyers use KPIs to find objective, concrete answers to difficult questions about marketing, growth, and training decisions. Our guide above provides legal department KPI examples.

How do you set KPIs for legal departments?

Start by considering the most important goals for your specific law firm. For example, you might run a small family law firm and want to know the best marketing channels.

You could track social media, paid ads, and landing pages to determine which option drives the most paying business into your firm. You could set goals to find and prioritize the most popular channels and collect data over a quarter.

What is the best law firm KPI dashboard?

There’s no one “best” law firm KPI dashboard, but popular analytics and goal trackers for lawyers include Clio, SimpleKPI, and Tableau.

The best way to find a KPI dashboard that fits your needs is to work with a law firm marketing agency. Experts can then use in-house software and custom KPI tracking to gather the data you need to measure complex goals.