With the end of the year fast approaching, now is the time to review your achievements and failures of the past year. Doing this in November will give you time to consider how to approach the year ahead. For sole practitioners and small firms without the benefit of a business management team, this exercise is critical to the future productivity and profitability of your firm.
“Twice and thrice over, as they say, good is it to repeat and review what is good.” ― Plato
Reviewing the year's successes and failures will help you determine what worked and what did not. In order to ensure that you are as honest as possible, it is necessary to have an objective measure of your results. Businesses, small and large, use key performance indicators as objective measures of progress toward targets.
Common law firm KPIs include billable hours, revenue per file or client and revenue per practice area. However, being a sole or small practitioner allows room for creativity in deciding what other KPIs to use. You can measure the traction of social media or blog posts, the activity on your website compared to others you admire, the ratio of clients generated from lunches compared to all networking engagements, the ratio of how much you bill to how many total hours of work are put into a matter, etc. The sky is the limit, and incorporating KPIs is a proactive way of planning to improve how you practise law and run your business.
The KPIs you select are a reflection of your firm's values and what you think is important for success in the region, industry or practice area. They will steer your firm in a particular direction and become part of your firm's identity. Therefore, it is important to take the time to properly select KPIs.
While KPIs can help you decide what to focus on and how to measure your progress, they do not work without discipline in reviewing your progress. Many of us fail to achieve New Year's resolutions not for lack of a desire to achieve them but for lack of an oversight mechanism to monitor progress.
One great way to stay on track toward your annual goals is to have quarterly reviews of where you are at. By incorporating KPIs into your system and analyzing your progress every quarter, you will be better equipped to achieve targets.
When you are creating resolutions, goals or thinking about what KPIs to incorporate in the new year, it is best to do it one or two months before the end of the year. This will give you ample time to consider how to build from the previous year's successes, what to do differently and determine exactly what you want to achieve in the new year. Importantly, it will also allow you to hit the ground running in the new year as there will be no lost time creating goals on Jan. 1. Coupled with quarterly reviews, by preparing early you increase your chances of maintaining goal-striving momentum throughout the year.
Whether you work alone, in a small firm or a large firm, you need to prepare for the upcoming year. Preparation should not be undertaken when the new year has already started — it should be done now. We have all heard the famous Benjamin Franklin quote: “By failing to prepare, you are preparing to fail.” Don't let that happen to you in 2018.