Tue 27 Jun 2006

If you measure fee earners on billable hours and fees paid you will get a bunch of fee earners who bill the required hours and send out bills of the required amount.
Is that really all you want?
What about:
• Successfully differentiating yourself from your competitors
• Successful management of your existing client relationships. Remember 80% of your business comes from 20% of your clients. You need to look after them.
• Development of new clients and business.
• Providing quality service which delights your clients.
• Cross selling new types of work into existing clients.
• High quality leadership of the firm and its departments.
• Good management of the business and its processes.
• Quality assurance.
• The development of systems and processes to make the firm more efficient.
• Making better profit from the work you do and finding ways to get more profitable work.
• Improving retention of staff and staff morale.
• Recruiting better quality people into the firm.

If “what you measure is what you get” and:
• Success of the firm is based on profits per equity partner, profits per partner and turnover based on annual budgets;
• Success of departments is based on them hitting annual revenue targets;
• Success of fee earners is judged on hours and bills;
What are the chances of achieving success in getting your people to focus on the above list?
In round numbers……zero.
Lots of lip service, little commitment beyond that needed to hit this years revenue targets.
Isn’t that enough?
No. You are never able to focus beyond 12 months out, you will never differentiate yourselves, will not achieve your potential and cannot operate strategically. Measuring numbers will not align your budgets with your strategy (if you have one).
If you come up against competitors who have a strategy and can implement it you will fall behind.
Is there another way?
Yes
Measure a broader range of things. Work out the things that are really important and measure them.
There is something called the Balanced Scorecard which can be used to measure performance at organisation level, department level and individual level.
The Balanced Scorecard has 4 perspectives:
• Financial perspective – how do we appear to our stakeholders?
• Customer perspective – how do we appear to our customers?
• Internal business perspective – What must we excel at?
• Innovation and learning perspective – Can we continue to improve and add value?
At each level the Balanced Scorecard will have key objectives in each area which are measured and against which performance is judged.
Now you can measure all of the things, which are really important to the success of your firm.
“What you measure is what you get”.
If you want to know more…talk to us.