Winning verdicts and settlements typically mean a law firm is on the right track. After all, if your clients come out victorious, it typically translates into more profit for your firm. Is there anything else worth keeping track of when it comes to knowing whether or not your firm is profitable after a series of wins?
Years ago, a “no” might have sufficed. However, the recent changes in technology have ushered in advanced software, litigation support that can give a jury a clear picture on how accident happened, and new ways of getting your firm’s name out into the public that go beyond the historic newspaper and TV ads. In order for these things to work, one must be willing to cover the costs.
I just recently came across an article by Frank Strong called “Six Business Metrics Every Law Firm Should Measure.” To view the full article, click here. I have to agree strongly with the article, as some of the metrics mentioned were:
- Cost of servicing a client
- Marketing expenditure as a percent of revenue
- Technology expenditure as a percent of revenue
I believe keeping track of these metrics of business is extremely important, especially for a contingent-fee based law firm. Even if an attorney is winning a lot of cases, he can quickly find himself in a financial bind if he is only focusing on the money coming in.