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Why Business Intelligence Tools are Key to Reaching your Law Firm’s KPIs
Imagine navigating your career without any feedback. No advice, no performance reviews, and no feedback on completed projects. You’re flying blind, just hoping that you’re moving in the right direction toward your ultimate goals.
It’s possible, but it’s not easy.
Law firms operating without business intelligence software are in a similar scenario, pushing toward growth or increased profit without data analysis to inform their strategy.
When optimizing your business, you shouldn’t have to guess your way through it. Business intelligence tools take the guesswork out of KPIs and empower law firms with actionable insights to get where they need to go.
What are business intelligence tools?
Business intelligence tools are programs that allow businesses to sift through different types of data and information to provide insights on performance, make better decisions, find opportunities for growth, and increase profit. Business intelligence tools can provide data for key performance indicators (KPIs) to tell your business what you’re doing right, and where you can improve.
While industry-agnostic tools can be helpful, they may require significant customizations to suit a law firm’s needs. On the other hand, legal business intelligence tools are already tailored toward legal practices, so law firms can hit the ground running with the tools that already work for them.
What are legal business intelligence KPIs?
Your firm’s KPIs should be set—and updated—based on your unique goals and needs. Whether you’re looking at your data to improve profit, decrease overhead time, or build a larger base of ideal clients, these metrics can help you gain a broader understanding of your practice while providing the flexibility to dial further into specific categories as your goals change over time.
While there are many KPIs you could choose from, some commonly monitored law firm KPIs include:
- Average Case Unit Value (ACUV): The average monetary value of all case units.
- Throughput Rate (TR): The number of cases your firm can complete in a year.
- Cycle Time: How long it takes to complete individual issues, from when you sign a service agreement to when the service fee is collected and the case is closed.
When analyzed in tandem, these metrics can help you understand how profitable your cases are and how to project firm capacity for future work. For example, as you review reports, you might discover that one practice area generates a higher ACUV, while other areas produce significantly less profit.
Business intelligence tools allow law firms to create in-depth reports that highlight their KPIs and break them down further based on client, matter, and other categories.
Ultimate Guide to Law Firm Business Intelligence
Are you sure about running a law firm without regularly analyzing performance data?
There are just certain things in life that you wouldn’t, even couldn’t, do without a little research and background information. Running a legal practice is definitely one of those things.
Understanding your business, your competitors, and your marketplace
Business intelligence tools don’t just tell you about your performance. They also provide valuable data regarding your market.
Dive into your firm’s business network
No matter your firm’s goals, business intelligence can provide insight on:
- Key clients and contacts at various companies
- Potential corporate connections
- Complimentary partners in related practices or industries in your area
- Potential mergers or acquisitions targets and predicted outcomes
- Alumni connections via law school and past work experience
Using these tools, firms can determine the success rates of organic growth compared to growth through mergers and acquisitions.
Analyze the competition
Law firms don’t exist in a market monopoly (although some might wish they did!). Many firms operate in saturated markets, and a leg up over competitors can make or break a practice. Competitor research can identify shifts in other firms’ employment structures, hiring practices, and retention rates, which may inform a firm’s strategy to create the most effective workplace.
Acquire the ideal clients
By reviewing your ongoing and past casework, business intelligence can provide an accurate picture of what types of clients are best for your firm. Which clients require additional work, or which services take more time than they’re worth? Identify your best clients, determine what sets them apart, and use that knowledge to generate more qualified leads and nurture them through a better client intake process.
Review your resource allocations
Use business intelligence tools to review hiring needs internally, as well as external factors that may inform compensation needs.
For example, consider the following:
- Are your partners spending too much time on non-billable tasks?
- Can you free up much-needed time by expanding your team?
- Which employees may need more support? Alternatively, which ones outperform the group but are compensated less than market rates?
These insights can help your firm form retention and hiring strategies to build an effective team that works.
Further analysis on areas such as market growth or decline can indicate where your firm may need to invest more resources moving forward. For example, are IP and copyright services on the rise, or should your firm focus on expanding its elder care team? Data analysis facilitates more educated decision making about profitable practice areas , instead of your firm’s best-educated guess.
Contextualize your data
Don’t get stuck with a list of meaningless or confusing data sets that take hours to sift through. With business intelligence software, you can quickly generate reports in the context of your practice. Instead of spending a day parceling through data, you can spend that time making big-picture decisions using that data to further your firm’s growth.
Working smarter is easy with Rocket Matter’s Business Intelligence Module
When you leverage business intelligence, you can find valuable opportunities for growth. With actionable insights from customized reports, your firm can make intentional decisions that move you closer to your strategic goals, improve your operations, and refine your services so you can better differentiate your practice from competitors.
Take the guesswork out of your business planning today. Rocket Matter’s Business Intelligence Module, available as part of our Premier tier, takes high-end reporting to the next level, with information you can actually use. Firms can navigate an easy-to-use interface to generate high-level reports based on clients, invoices, tags, contacts, and more.
Schedule a demo or start your free trial today!
Ultimate Guide to Law Firm Business Intelligence
Are you sure about running a law firm without regularly analyzing performance data?
There are just certain things in life that you wouldn’t, even couldn’t, do without a little research and background information. Running a legal practice is definitely one of those things.
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