The KPIs a managing partner should actually watch

A managing partner should watch a small set of numbers that follow the client from first contact to repeat instruction: how many enquiries arrive, how fast they are answered, how many become instructions, how much capacity fee-earners have, how quickly work turns into cash, and how many clients come back. Twelve is enough. Most firms already watch the financial ones at the end of that chain and almost none of the operational ones at the start, which means they learn about a bad quarter after it has happened.

This post is part of our series on revenue operations for law firms. It is about running the firm, not about accounting. Where a number touches the accounts, how you calculate it for your own books is a question for your accountant, and nothing here is financial advice.

Why do most law firm dashboards miss the problem?

Because they are built from the systems that already produce numbers, and those systems sit at the end of the process.

A practice management system knows about matters, time and bills. It knows very little about the people who rang and did not become clients, or about the three days a new enquiry waited for a call back. So the dashboard reports what the system can see: fees billed, time recorded, cash collected. Those numbers are real and they matter, but they are lagging. By the time billing falls, the enquiries that would have become this month's bills were lost two or three months ago.

The fix is not a bigger dashboard. It is adding a few numbers from the front of the firm, defined carefully, and reading them first.

Which KPIs should a managing partner watch?

Group them by stage. Each stage has two or three numbers. Read them left to right, because a problem early in the chain shows up in every number after it.

Stage one: enquiries

1. Enquiries received, by channel and team. The raw volume coming in by phone, web form, email and referral. Use the same definition every month; the guide to writing one is in how to measure your enquiry-to-instruction conversion rate.

2. Missed calls, in hours and out of hours. Inbound calls to the firm's numbers that nobody answered. Your phone system's call log has this. Split it by time of day, because the fix for a lunchtime gap is different from the fix for evenings and weekends.

3. First response time. The time from an enquiry arriving to a person at the firm speaking to or replying to the enquirer. Report the median and the share handled within your target (for example, same working day). The median hides the long tail, so look at both. Why the first hour matters is covered in speed to lead for law firms.

Stage two: conversion

4. Qualified enquiry rate. The share of enquiries the firm could and would take. If it drops, either marketing is attracting the wrong work or the qualification tests have changed.

5. Enquiry-to-instruction conversion rate. Instructions from a cohort of qualified enquiries, measured after a fixed window. The single most useful operational number.

6. Source of new instructions. Recommendation, returning client, referral from another firm or professional, internal cross-referral, web search, directory. Recorded when the file is opened, not guessed later.

Stage three: capacity and delivery

7. Fee-earner capacity. Open matters per fee-earner by team, and whether the trend is up or down. This is the number that tells you whether you can take the work that stage two is winning. A firm that converts well into a team that is already full just creates a backlog.

8. Client update gaps. Open matters where the client has not heard from the firm in longer than your standard, for example 14 days. This is the cheapest early warning of a complaint. Firms rarely track it because nothing in the practice management system is built to.

Stage four: cash

9. Work in progress age. How long recorded time sits before it is billed. Report the share older than, say, 60 days.

10. Debtor days, or bill to payment. How long bills take to be paid. Together with WIP age this is often called lock-up. Agree the calculation with your accountant and keep it fixed.

These two are the ones most firms already watch. They belong on the list, but they are the last two numbers to move when something goes wrong at the front.

Stage five: return

11. Repeat and cross-referral rate. The share of new instructions from existing or former clients, including clients of another department. There is a full guide in repeat instructions and referral sources.

12. Complaints, by cause. Count them and classify them. Delay and poor communication are worth separating from disputes about the outcome, because they have operational fixes.

How should the twelve be laid out?

On one page, in the order above, with the current month, the previous month and a rolling three-month figure. Nothing else. A managing partner should be able to read it in five minutes.

Two rules make it useful:

• Every number has one named owner. Not a committee. The owner explains movements and proposes the fix.
• Every number has a written definition at the bottom of the page. The definitions are what stop the numbers turning into an argument.

A worked example of reading the page left to right

The figures in this example are invented to show how the numbers interact. They do not describe a real firm or a benchmark.

A private client team's billing is down about 15 per cent on the previous quarter. The team leader says the market is quiet.

The page says otherwise:

• Enquiries received are flat.
• Missed calls are up by half. Most of the increase is between 12 and 2pm.
• First response time has doubled, from same day to next day.
• Conversion has fallen from roughly one in three to roughly one in four.
• Capacity is fine: open matters per fee-earner are lower than last quarter.

The market is not quiet. People are still calling. The team's receptionist moved to a different role two months ago, lunchtime cover was never replaced, and enquiries that used to be answered are now going to voicemail. The fix is a rota or a cover arrangement, not a marketing campaign. Without the first three numbers, the firm would likely have spent money on the wrong problem.

Which numbers should you ignore?

Some numbers look useful and mostly are not, at least for this purpose.

Website traffic, on its own. Visits do not pay bills. Watch enquiries by channel instead, and look at traffic only when web enquiries move.

Calls handled, without missed calls beside it. A rising number of answered calls sounds good. If missed calls rose faster, it is not.

Individual fee-earner league tables for conversion. The samples are too small and the enquiries they receive are too different. Measure teams and stages. The moment a number is used to rank individuals, it stops being accurate.

Chargeable hours as the only productivity number. It matters, but it says nothing about the non-chargeable work that keeps clients (the update call, the returned voicemail) and a team that is optimising only for hours will cut exactly that work first.

Where does the data come from?

Mostly from systems you already have, and from one moment you are probably not capturing.

• Phone system: missed calls, call times.
• Website forms and shared inboxes: web and email enquiries, with timestamps.
• Practice management system: matters opened, source field, WIP, bills, payments.
• Complaints log: complaints and causes.

The gap is the enquiry itself. What was it about, was it qualified, and who was it passed to. That has to be captured at the time the enquiry is taken. Ask reception to log it and they will, on quiet days. Ask fee-earners and they will not, and they will be right, because it is not the best use of their time.

A principle that has held in every revenue operations job I have done: if a number can only be collected by asking a busy person to type it, it will be wrong within a quarter. Collect it as a side effect of the work, or not at all.

How often should the page be reviewed?

Monthly, with a quick weekly look at the first three numbers.

The enquiry numbers move fast and are cheap to fix, so a weekly glance catches a gap (a holiday, a sick receptionist, a broken phone line) before it costs a month. The rest move slowly and a monthly review is enough.

Each monthly review should end with one change and one owner. Next month, check the change was made before you discuss whether it worked.

How should you set targets?

Carefully, and not in the first month.

The first month of honest measurement is a baseline, not a verdict. It usually looks worse than anybody expected, because the missed calls and slow replies were always there and are now counted. Setting a target before you have a baseline invites people to argue with the number rather than act on it.

A sensible order:

• Months one to three: measure only. Agree the definitions, fix the obvious data gaps, and let the numbers settle.
• Month four: set targets for the front of the firm first. Missed calls and first response time are the easiest to move and the least contentious. Nobody argues that a caller should wait longer.
• Month six: set targets for conversion by team, based on each team's own history rather than a firm-wide figure. A conveyancing team and a litigation team should not share a target.
• Leave cash targets where they are. Most firms already have them, and they are owned by finance.

Two cautions. First, a target on first response time can be gamed by a quick "we have received your enquiry" message that does nothing for the client. Define response as a person engaging with the enquiry, not an acknowledgement. Second, a conversion target can be gamed by tightening the qualification tests until only certain wins are counted. Watch the qualified enquiry rate beside it, so a drop in one explains a rise in the other.

Who should see which numbers?

The whole page goes to the partners and whoever owns operations. Each team leader gets their team's line, every month, with the firm's figure beside it for context.

Reception and support staff should see the front-of-firm numbers. They usually know exactly why a number moved (a new phone system, a holiday rota, a web form that stopped sending emails) and they are rarely asked. Showing them the missed-call count, and thanking them when it falls, costs nothing.

Fee-earners should see team numbers, not personal league tables. The goal is a shared view of where the firm loses work, not a ranking.

Where WasilX fits

The first three KPIs on this page, and the source field in the sixth, all depend on the front door being covered and every enquiry being written down when it arrives. That is what we built Cam, our AI Engagement Coordinator, to do. Cam takes calls on the firm's line, at any hour, says it is AI, qualifies the enquiry against the firm's own questions, and passes a summary to the right person. Each fee-earner also has a personal assistant that keeps their clients updated on matters, which is the eighth number on the list. Cam does not give legal advice.

If you would like to see the first page of this dashboard built from your own phone line, talk to us.

Frequently asked questions

How many KPIs should a law firm track? Fewer than you think. Twelve on one page, read in order, beats fifty on a screen nobody opens.

Is lock-up the most important number? It is the most important cash number, and most firms watch it already. It is a late signal of problems that start at the front of the firm.

Should KPIs be shared with fee-earners? Team-level numbers, yes. They are usually the first to spot why a number moved.