Data powers the world. Businesses and organizations gather massive amounts of information, analyze it and attempt to use resulting insights to obtain a competitive advantage. Data analytics are important for massive companies like Facebook as well as small law firms. If your firm is not yet taking advantage of data analytics, it is time to seize this opportunity. Data analytics will prove essential for gauging the health of your business.
Key Performance Indicators
Most people have heard of KPIs in passing yet many are unaware as to what they actually are. KPI stands for Key Performance Indicators. These are quantifiable metrics that gauge whether your firm is making progress toward goals, meeting those goals or stagnating. Make proper use of KPIs and you will find out if your firm is on track to meet or surpass your targeted realization rate. An excellent example of how KPIs should be used in the context of small law firms is to measure the rate of new client conversion. This metric is determined by taking the number of recently added clients and dividing it by the number of potential new additions.
As an example, a small law firm that has 10 inquiries from prospective clients in the previous month and converts three into new clients will have a client conversion rate of 30 percent. The initial step to KPI is to gather data analytics. Begin by tracking the number of potential clients that contact you and the number of conversions to clients. The next step is to ask questions and track the manner in which prospects initiate contact with your firm. Find out exactly how potential clients find you when calling your office. It might be through a Google search, Facebook, a print ad or a client referral.
The Challenge of Data Analytics Collection for Small Law Firms
The challenge of law firm KPI is the collection of data. If you lack an automated and accurate method to gather data, you will find you invest more time on KPIs than necessary. Opt for legal practice management software to assist in the tracking of your work, obtain the data necessary to set goals and gauge performance. The goal is to find a solution that empowers you to work across the entirety of the day without worrying about how to track data.
Consider tapping into the power of legal practice management software such as Smokeball. This software empowers users to gather detailed analytics about your firm and fully harness the power of information while working. Smokeball makes it possible for your and your staff to go about your regular workday while all of your activities are recorded. For example, creating a document will trigger Smokeball to track exactly how long it takes to edit the text. Even reading and replying to emails can be tracked in Smokeball. This is the data analytics tool your small law firm needs to understand how time and effort are being spend and ultimately maximize efficiency.