Our firm is an 8 attorney general practice firm in Kansas City. In addition to hourly work we have a heavy mix of contingency fee work as well. Other than our monthly profit and loss statement and a report of hours produced we have no other financial reports that we use. I have read about financial dashboards. What might we use them for in our firm?
In these economic times effective pipeline management is becoming more and more important in law firms – especially in those firms that do a lot of contingency fee work. This might be a good place to start using some dashboard metrics.
Pipeline management is a term used in the management consulting profession to refer to the process by which you continually evaluate your active opportunities (prospective clients to booked clients) for their balance of QUALITY and QUANTITY. The goal is to continually stay on top of the overall health which is a full pipeline. Pipeline management allows client relationship managers to more accurately forecast fee revenues, better staff and manage client engagements, and close more client business.
I often also refer to Pipeline Management in law firms in the context of using financial dashboards by which the individual charged with financial management responsibilities is continuously aware of significant changes in the firm's Pipeline (from prospects to cash):
By comparing these dashboard statistics to a prior month, quarter, or year – you are able to measure the effectiveness of your marketing and avoid financial surprises down the road.
John W. Olmstead, MBA, Ph.D, CMC