April 8, 2008
Large Law Firm Focuses Resources On Measuring Performance
In the February, 2008 Managing Partner Magazine, a case study was published regarding the international firm Herbert Smith, who recently implemented a financial management system that focused on measuring performance. The case study mimics everything we promote on More Partner Income and thus deserves highlight.
The study begins with a quote from William Thomson (Lord Kelvin), who said "if you cannot measure it, you cannot improve it". They may have done well to also quote "don't reinvent the wheel", since most of the sweat put forward in devising their system is already developed by software vendors such as LexisNexis. It is the process, though, that bears note.
The firm adopted a "phased approach" to implementation that focused on basic needs first, then expanded to add functionality as the basic needs were met and a comfort level established by the users. The firm initially only gave access to the system to the partners and used three phases:
- Easy access to key financial reports
- Financial planning and reporting
- Time recording and "universe" design
The first phase entailed providing easy access to the important financial reports that had previously been distributed on paper. This not only provided the partners with the information they needed, it helped them become accustomed to viewing this information electronically.
Phase two was focused on budgeting and management accounts. They also placed some forward-looking indicators of performance and trend analysis. This helped the firm make future projections through modeling.
Phase three provided real-time information for fee earners, including alerts when time entries were late or incomplete.
In my opinion, phase three should have been phase 1, phase 1 should have been phase 2, and phase 2 should have been phase 3. However, whatever works is the right solution. The important thing is that the firm set up their implementation with the highest probability of success by not cramming an entire new method of consuming information to all fee earners at once. Instead, they focused on getting partners on board first, then eased them into the solution by first getting the most important information (read: what they had already been getting) to them first. Then incrementally adding new value to the system until it became an indispensable tool for managing the firm.
When your firm is looking to invest in a software solution:
- If considering to develop it internally, which will require specialized staff to maintain, make sure you research to see if software vendors have already developed the solution you need;
- When you implement the solution, make sure you do it in phases to ensure adoption by all those who will benefit from it.
We have begun taking submissions for the 2008 Law Firm Economic Survey. If your firm is interested in participating, please contact Brian by clicking here.
Related posts
Filed under Forecasting, Management, Technology by Brian J. Ritchey
