How to go from zero to 60 with law firm metrics

How to go from zero to 60 with law firm metrics

Posted on November 14, 2017 by in inVOICE Newsletter

Welcome to this month’s issue of inVOICE. These “5-minute reads,” brought to you by InvoicePrep, are short, informational executive briefs designed for law firm executives and managing partners. They provide practical tips and provoke new ideas to make your management of your Firm more effective. (For our prior newsletters please visit us here).


Last month we looked at a technology that we previously would have associated with “the future” — the use of Artificial Intelligence (AI) to examine invoices, identify patterns, and to propose more efficient ways of practicing law.

As we discussed, however, that vision isn’t in the future anymore. It is very much a current reality, at least as the folks at IBM Watson would have you believe. They are already touting 30 percent reductions in legal spend for customers using their advanced technologies.

We provided a number of helpful tips and best practices to that we believe firms should consider deploying so that that 30 percent reduction in legal spend is taken from firms down the street, and not yours.

This Month – Measure, Measure, Measure

We should point out, of course, that the fact that clients can adjust invoices so dramatically suggests that there can be inefficiencies in the way firms practice. Most good firms would acknowledge that fact and would also point to their own efforts to minimize such inefficiencies where possible.

Firms are no different than other businesses that are constantly looking to improve how they deliver their services and products. Firms want to be perceived as better than their competition; they want to perform better and get more business as a result.

However, firms are a bit different than many other businesses in the sense that — at least from what firms tell us — they find it more difficult to measure their current processes, the amount of resources required to perform certain activities, and the speed with which they get things done. In short, firms tell us that they don’t have the right “metrics.”

Why it’s So Hard for Firms to Capture Metrics

To a significant degree, the firms talking to us about metrics are right. They don’t have the right metrics. And they’re not sure where to start. The entire process can seem overwhelming.

It might make many firm executives and leaders feel a bit better to know that this really isn’t their fault. We say that because the traditional law firm technology industry (those companies selling technology solutions to law firms) have really fallen short in providing firms with the right tools to capture the right metrics.

Most law firm time and billing systems, for example, start with the premise that it’s their job to simply capture what activities the attorneys have performed. They dutifully capture to the second every activity completed, but they miss two important data sets that are critical to measuring or creating the right metrics.

First, most time and billing systems fail to incorporate back into their data what the client actually paid for in terms of the activities noted. That means that, for most firms, the data that resides their time and billing system is essentially obsolete from the moment a client makes an invoice adjustment.

For example, if a firm bills $1,000 to do Activity A, but the client only pays $800 of that, it is imperative that the firm knows both those amounts. From an efficiency standpoint, the firm needs to know both that it took them $1,000 worth of time to get Activity A completed, and ALSO that the client didn’t feel that Activity A was worth $1,000.

Second, most if not all time and billing systems fail to capture data elements that allow firms to drill down and analyze like case types. This includes the type and venue of the matter (case) that the activities are being performed on. It also means injury information and case disposition information and a variety of other data elements.

These additional criteria are imperative if the firm is going to analyze its efficiencies in a meaningful manner. After all, that level of analysis is what clients now utilize and firms need to catch up to that. A client is not going to say, “How does your firm generally handle cases?” They are going to say instead, “How good is the firm at handling serious auto bodily injury cases in the State of Texas?” Without a breakdown by matter type, venue, injury and case disposition, the firm really has no idea.


How Firms Should Get Started with Metrics

Our advice to firms looking to go from 0-60 with a metrics program is to start first with data already available to them – the data available to them through the e-billing platforms they use to submit invoices to clients. If you think about it for a second, this source has the first two components mentioned above: the time it took the firm to perform an activity, AND the value the client placed on that activity. In other words, what was billed and what was paid.

Another benefit of tapping into this information-rich source of data is that it means that firms don’t have to think of a metrics program as only a “go-forward” project. To the contrary, mining a year’s worth of historical e-billing data creates a year’s worth of metrics. Firms can be ready to rock and roll, answering detailed questions on their next client Request for Proposal or in their next marketing pitch.

Obviously, what is missing from the equation described above is the second layer of information (matter type, venue, injury, disposition, and other sorting criteria).  Tapping into a year’s worth of e-billing data doesn’t magically produce these important elements. However, when analyzed historical e-billing data for firms we’ve found that it is relatively painless to pull those additional data elements from files and to add them to the historical e-billing data sets. And by “relatively,” we mean a few legal interns in a file room working through a thousand files to grab some critical data points.

Once the historical e-billing data has been classified, and with the right technology, matter and venue information can be added to the invoice as it is submitted to the client. That’s critical to the process and we offer that technology to help firms not have to do the retrospective analysis ever again. From that point forward it’s “metrics on demand.”

What Do You Think?

We view invoicing data to be at the core of how firms can improve their businesses because we’re in the business of making invoices better. When combined with client adjustment data, firms have what is truly needed to improve their businesses, including how much time and what resources the firm used to complete an activity, how the client valued that activity in terms of what they were willing to pay – all sorted and parsed by a variety of critical elements (venue, matter type, injury, disposition).

What do you think about this topic? Are you challenged by the concept of starting an in-depth metrics program at your law firm?

I’d like to know.


About InvoicePrep

InvoicePrep enhances law firm profitability by improving e-billing quality and accuracy. When invoices are prepared properly, payment is more prompt and the number of denied charges decreases. InvoicePrep’s system is streamlined, efficient and uses a combination of cutting-edge technology and professionals with extensive legal invoice compliance and e-billing software knowledge. To learn more about InvoicePrep, please visit

About the Author


InvoicePrep helps law firms prepare invoices that meet their clients’ e-billing and litigation management guidelines. When invoices are prepared properly, payment is more prompt and the number of denied charges decreases. InvoicePrep’s system is streamlined, efficient and uses a combination of cutting-edge technology and professionals with extensive legal invoice compliance and e-billing software knowledge. To learn more about InvoicePrep, please visit