As we approach the end of 2013, now is the time to sit down and take stock of how you did during the past year so that you can look forward to making 2014 the best year ever for your law firm. If you are a golfer, then you understand that after you finish the front nine, then you take a break, tally up your score, get something to eat/drink, and then you go back out and hit the back nine with renewed energy. In your law firm, every year around this time we are taking that break to fill-up (quite literally for most of us), and tally up our scores for the past year before we head back out to tackle the challenges that the new year will bring us.
So what should we be looking at?
A year in review – Let’s take a look at the numbers
Here are 10 major metrics that I like to look at. Some of these are work-related, some are more personal. Fair warning here, I am a numbers guy (most lawyers hate numbers – that’s been my impression anyway), so a lot of my review comes in numbers.
- Yearly revenue. This is probably the single biggest number I will look at. How much money did my firm pull in? How much of that money was attributable to me, and how much was attributable to my staff? Right now, the numbers are skewed towards me for a number of reasons. Now that I have hired a contract attorney, and am looking to bring on a full-time associate next year, my goal is for me personally to be generating around 60-65% of the revenue for the firm, and for my paralegal and staff to generate the remainder. There are only so many hours in the day, so the revenue I (and any attorney that bills by the hour) can only grow so much. If I want to meet my revenue goals, I have to hire an associate.
- Yearly Expenses. This is something I like to take a look at at least once a quarter. When I say “yearly expenses”, I’m really referring to monthly expenses. Most of my expenses recur on a monthly basis, so looking at what I’m spending my money on, and trying to keep it below a certain amount is a goal of mine. At the end of the year is a good time to take stock of not only expenses, but the actual services you use. I recently switched from Rocketmatter to MyCase. This switch was driven by the fact that I perceive MyCase to be a superior product, and my staff loves it. However, I would be lying if I didn’t also mention that MyCase is 50% of the cost of Rocketmatter – something that was not lost on me when I made my decision to switch.
- Average case value. If you are not already, you should be tracking the dollar value of each of your cases. This is a pretty simple report that can easily be run in Quickbooks. Look at the revenue generated by all of the cases you worked on for the past year, and divide this by the number of cases, and you should be able to come up with an average value. That is what a new case is worth to your firm. This number can be used to evaluate marketing ideas and run cost/benefit analysis for marketing decisions that are going to cost you money.
- Your top 20 list. Can you put together a list of the “Top 20” people who refer you business each month? I want you to think about this for a minute. If you can develop relationships with 20 people who send you business on a regular basis, how would that impact your law firm? Let’s say you get a case once a quarter (4 times a year) from each of these referral sources, and your average case value (from above) is $3,000. Let’s also assume that you only convert 50% of those referrals into clients. That’s an additional $120,000 per year in revenue! So if you don’t think having a top 20 list is important, think again!
- Web Analytics. I actually track my web numbers on a weekly basis – every friday. I also get a report from my paralegal each Friday showing the total number of calls for the week, total number of calls from new prospects, and the total number of initial consultations she scheduled. I throw that information into a spreadsheet which aggregates these numbers from the past year, and I also throw in the total number of consults I completed, total files opened/closed, total number of referrals, and number of unique web visitors for the week. These numbers are the heartbeat of my firm. If my web traffic drops, I can expect that my call volume will also drop.
- Total number of family members (dogs and cats not included). Right now we are holding steady at 4. I anticipate that this number will jump by about 25% in the coming year. If you are curious about the dogs and cats – we are at 1 dog, 5 cats presently. If you had asked me about this last year, I would have anticipated that we would be down to only cats at right now. However, our blind, deaf, 13-year-old mutt still has the energy of a puppy. I think he will be with us for the long haul.
- Number of books read. Those of you that follow this blog with any regularity know that I like to reference the books I am currently reading. I don’t really keep track of how many books I read in a year, although I should. I seem to be the most productive when I am reading good books. I’ve recently subscribed to Audible.com so that now I can also listen to at least one new book per month. My long-standing goal is 10 pages per day. Doing that, I anticipate I can get through a little more than one book per month (assuming 200-300 pages). So I think that 12-15 books for 2014 is a good goal, not including another 12 audiobooks.
- Number of podcasts listened to. I don’t listen to the radio anymore. If I am not listening to an audiobook on the way to the office, I’m listening to a podcast. I love them – can’t get enough. One of these days I will do a podcast or a post outlining my favorite podcasts.
- Workout days. I will be honest here – I’m really dropping the ball with this one. I know and understand that when you workout, your body gets more oxygen. You get a natural high, you feel more energized, you sleep better, etc. One of my general goals for 2014 is to start exercising more. I’m already getting up at 6 am to write every morning – maybe I just need to bump that to 5 am and start walking/jogging every morning for a ½ hour. I will say that this will NOT happen while I am in Cleveland, Ohio for the holidays this coming week. But maybe after I get back? Stay tuned…
- Amount of time spent with family. When I was a kid, I never saw my Dad. He always worked late and worked on the weekends. I’ve vowed not to do that to my kids. I try to leave the office by 5pm everyday – on the dot. Some days I go a little over, but I’m working on that. Spending time with your family is one of the most important things you can do. That’s one of the main reasons I have my own law firm – it gives me the flexibility to work when, where, and how I want. So if I want to leave at 5 and maybe do some work later, I can do that. I also strive to not work on the weekends unless I have an important trial or court hearing coming up.
How did you do? How do you stack up? It’s time to start thinking about 2014. If you are like me, you are taking the next week off and focusing on spending time with family. However, I’m also going to try to steal and hour or two here and there to look at these metrics for the past year and start to put together some goals for 2014 (fyi, I’ve already got my goals in my head – time to put them to paper, which is how they stick).
If you want to share about your goals for 2014, accomplishments for 2013, etc., please feel free to comment below. I’d love to hear from you!