Life Beyond the Briefs
At Life Beyond the Briefs we help lawyers like you become less busy, make more money, and spend more time doing what they want instead of what they have to. Brian brings you guests from all walks of life are living a life of their own design and are ready to share actionable tips for how you can begin to live your own dream life.
Life Beyond the Briefs
The Velocity of Money: How to Use KPIs to Run Your Law Practice
Ever wondered how to convert seminar attendees into paying clients? We're covering every step of that journey, from targeted mailers to signed retainers, specifically for estate planning lawyers. Learn the 7 to 12 crucial KPIs that ensure your firm's health and performance stay sharp. We'll discuss the importance of lead and lag metrics, enhancing client engagement, and the value of a robust sample size to derive meaningful data. Plus, we emphasize the power of teamwork and tools like ChatGPT for crafting effective KPIs. Tune in for a compelling discussion designed to help you build a data-driven, high-performance law firm.
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Brian Glass is a nationally recognized personal injury lawyer in Fairfax, Virginia. He is passionate about living a life of his own design and looking for answers to solutions outside of the legal field. This podcast is his effort to share that passion with others.
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Welcome back into another Friday solo episode of Life Beyond the Briefs. This is the number one podcast for entrepreneurial lawyers who are trying to live lives of their own design and not live lives created by default, because we never ask questions about how could it be any better? And in today's episode I'm diving into what I call the velocity of money, which is, as cases and as clients and potential clients, into our worldview. What are the most important metrics and KPIs that we should be tracking to make sure that we are being as efficient as possible in terms of not losing out on marketing dollars, not losing out on revenue and running the most profitable law firm that we can? Today's episode is an excerpt from one of the tribe coaching modules that we have released here in Great Legal Marketing this year. If you are not already a member of the Great Legal Marketing tribe, I want to share with you every couple of months the things that you're missing on the inside of our program, if this resonates with you, if you think you need some coaching on this beyond podcasts, because the next step with the tribe is that there was some homework that went out with this module that everybody completed, that Ben and I reviewed and then we got on a group coaching call where we answered questions and dove even deeper on KPIs. So if you listen to this episode and this is something that you feel like you need in your law firm, please reach out. We'd love to have you inside the group, and the best entry point for that, if you've never been to one of our events, is to get yourself out to Phoenix, arizona, october 3rd through the 5th for the Great Legal Marketing Summit. It's going to be a three-day event with all sorts of entrepreneurial lawyers talking about how do we run better law firms so that we can live better lives. You can grab your tickets to that event at GLMSummitcom. That's GLMSummitcom. All right on with the show.
Speaker 1:So, number one why is it important to manage by the numbers and to have KPIs set for your teammates? Well, it helps everybody be really clear on exactly what's expected of them and it helps minimize the amount of frustration that people have because they feel like they're being judged unfairly. They might feel like, you know, paralegal one is being judged differently than paralegal two because of personality or because of any other different reason, but when you have KPIs and everybody understands what the set of metrics is that we expect from them showing up on time, doing the work, getting out a certain amount of work product every single month, maybe bringing revenues back into the firm every single month then everybody's really clear on exactly what it is that they have to do on a week-by-week, month-by-month and, ultimately, day-by-day basis. And so let me start this video with the story that's in this month's Great Legal Marketing Journal about what I found when I started at Ben Glass Law back in 2019. And I will tell you that if you are a visionary in your law firm, if you are the big thinker, then this month's module is probably going to drive you nuts and you should probably offload this to your integrator or your CO or the person in your law firm who actually likes the numbers and dissecting the numbers and figuring out where you can get the team to run faster, because I've found that this really is not visionary kind of stuff.
Speaker 1:Okay, so, with that said, what I discovered in 2019 when I started here is that we had no systems, no processes at least on the auto accident side that were really well defined. Everything was managed in Excel sheets. There was no centralized place where we could go and look and see how long has a medical records request been outstanding or how long has a demand been outstanding? And so one of the first things that I did is I had my brother, matt who was a college sophomore or a junior at the time dive into our numbers and I said, matt, take the last 18 months of cases that we closed and I want you to find me a couple of numbers. I want you to find the date that we dispersed the money to the client and paid the firm. I want you to find the date that the case settled or went to verdict. I want you to find the date that the case demand letter went out to the insurance company, the date where the client had his last set of medical care, and then the dates when we were retained and when the crash happened. And so now we have this beautiful timeline and data set of the I don't know maybe 100 or so cases that we'd closed in about 18 months, and we could start to understand where the problems were. We could start to understand number one, most of our clients that are coming to us when are they arriving? Are they arriving two days after the crash or are they taking a long time from the date of the crash to the date that they signed us.
Speaker 1:What we found when we looked at that number will not surprise you. It's that our largest cases waited six or nine months before they retained a lawyer, before they found us. We didn't at the time look into our data set and figure out when's the first time that they contacted us. We talked about this a little bit in the process pipeline module, but when we later went back and we said, okay, these people who retained us six or nine months down the line the ones with the biggest cases when did they first contact us? It was well before they hired us, and so the understanding there is.
Speaker 1:People come into your law firm's worldview. Maybe they download a white paper, maybe they download one of your books, maybe they watch some of your videos and we've gotten really good at tracking this now but it might take them a long time to decide hey, I do actually need a lawyer for this problem. And the larger the case, the longer they tend to wait right. On the other hand, the people that are hiring you one, two, three days after the crash by and large those are smaller cases and that's fine. Those cases make up the cases that pay the monthly bills. They keep the electricity on, they make sure the payroll hits every month. Right, we need those cases too, but the larger ones take more time. So that's one thing that we learned from that.
Speaker 1:Another thing that we learned when we looked in those numbers is that we had just an enormous amount of time that was being wasted while we were waiting for medical records to show up and then was being wasted in the demand process. And so in some cases I'm embarrassed to say we had 300, 400 days go by between the last day to the client's medical care and the time that the demand package went out Completely unacceptable. We've gotten that down in our firm to about 27 days on average. Now, right, because we understand the velocity of money. Now we understand that while you have that case inventory sitting there, it's just sucking up staff time because they're answering phone calls from clients who are saying what's going on with my case? It's irritating your clients because it's 10 or 12 months when there seems to them to have been no progress in the case, and so we put systems in place now to condense that time where the client is waiting for us to do something, for us to take their finished case in their mind and send it off to the insurance company for an evaluation and move it closer to a settlement or to a verdict.
Speaker 1:The last part of this well, the last two pieces of this that we've sped up what happens after we've sent a demand? So at some firms there's no deadline, that's going on demand. That's not the case with us. We put a 30-day deadline on demand and in my mind there really should be no reason that we go longer than 45 days from the day that we send a demand to the date that we are very, very close to settling the case or the date that it's in suit, right. I mean, for most cases, you're going to know within a couple of days of receiving the offer is this a case we can settle or is it not a case we can settle? We've got to move it faster. The last piece that we identified is we had these outlier cases and they were outlier cases. It took a long time from the date that the case was settled to the date that the money hit the bank account. Again, that's dead space, right, and it's because we hadn't done all these things on the front end of the case to make the back end of the case move faster. And of course, this is going to be different if you're in a family law firm or an estate practice or criminal defense practice, and I'm going to break down for you how I would approach those kinds of practices later in this video.
Speaker 1:But the important thing to know is that with your KPIs, you have lead metrics and you have lag metrics, and everything that we identified with Matt is really a lag metric of when am I going to get paid? Right? And that's the ultimate metric that most firms care about is what was the revenue in the last year and what was the profit in the last year. That's all the way at the end of the timeline. But identifying those metrics Other intervals in the case helps you identify what's the lag metric along the way. What is the lag metric that leads to? Geez, it takes us three or four hundred days to send a demand package out.
Speaker 1:Okay, now that we know that, what can we identify earlier in the process and put KPIs around so that we speed it up? So, for instance, back to the example of it should only take 45 days from the time that a demand goes out to the time that the case is either nearly settled or settled or we have it in suit. That's something that we have absolute control over. I have absolute control over my activity on day 46. Do I talk to the client and get them to file a lawsuit or do I continue to give the adjuster extensions? I have absolute control, almost absolute control, over the amount of time that it takes a case to disperse, once the case is settled, because of the activities that I took or didn't take earlier in the case. And so when you identify things like in my practice, identifying lien holders, checking out sanity balances and we put KPIs around when those should happen in the case process all of a sudden we speed up all of the lag metrics, we speed up all of the things that are going on in the back end of the case, and so by identifying the places where money is stuck in your firm, you can really compress into the next three or six months probably teen months worth of files, and that's awesome. But it only works once, because now that the system is up and running, we can't expect that compression to increase our revenue in quarter three and in quarter four. After we put it into place, we've got to spin up more and more cases and we've got to make things happen faster and faster. So there actually have to be KPIs around marketing, what's going out, appointment sets and also around what's our conversion rate once clients are coming to us.
Speaker 1:So what I'm going to do next is break down for you some of the lead and the lag metrics at the beginning of a case. I'm going to do it in the example of an estate planning lawyer who's hosting seminars. I've seen some wine and will seminars. I've seen, obviously, the financial planner steakhouse seminar. If I were doing one of those, here's what I would be thinking about about how do I get more clients into the front of my funnel? Okay, so there really are seven steps that take place between the time that I send a mailer out and the time that I have somebody who's come to one of my seminars signing my retainer and giving me some money. So at the end of this, I have money this is from my retainer but you have to think through the KPIs and the number of prospects you have to start with if you want one paying prospect at the end.
Speaker 1:So what are all the steps that take place in between? So at the beginning, we're sending a mailer out to a list, right, and you know, the old financial planner way of doing this is sending to everybody in the zip code who's in a certain age bracket. When we do that, we're only going to get a certain number of responses, and from those responses we're going to get a certain number of people that actually show up. And from the people that show up, I'm going to have a certain number of people that show up and eat my steak and drink my wine and then I never hear from them again, right, but I'm also going to get some consultations and those people are going to come back through my office at a later date. And from those consultations we've also got to think how many of these guys are going to show up, right? Because how many times have you had an appointment that's set on the phone that something comes up in their life or they get scared off or something else happens in the meantime, and then they decide not to show up in the meantime, and then they decide not to show up. Last step there is I've got to sit through this consultation and I've got to decide do I want to work with you? And then, ultimately, if I do decide that I want to work with you, I've got to get you to sign the retainer. So there's all of these steps in the process, no-transcript.
Speaker 1:So I would be thinking, if I were looking at this process, about two things when can I spend more money to increase the number of at-bats that I get, increase the number of chances that I can get a new client, and then where can I have a better batting average? Where can I increase the number of people that are not falling out of my funnel? So here I would be looking at how can I spend more money on a mailer, or how can I spend better money on a mailer by dialing into my list, and that goes back to understanding who's actually in your client base, targeting your mailers at people that are in the client base. Second part of this that I'd be thinking about is where are the levers? So there's got to be things that happen in between the initial response and getting people to actually show up on a Tuesday night at the steakhouse to drink my wine, eat my steak, right, and so what can I do to improve the client relationship? And who on my team can I identify? Who's going to be responsible for that KPI? Can we take the show-up rate from 50% to 80%. What would that take?
Speaker 1:And then I'd be working on my own presentation, right? I got these people that show up. I don't want to waste my time and my money. So how can I get them to convert better to a consultation, right? What can I offer them while they're sitting there? Maybe it's a discount, maybe it's a bonus onto the package, something they wouldn't receive had they just called my office and set an appointment. What can I do to get them to schedule the appointment while they're sitting in my seminar?
Speaker 1:And then, of course, just as important as the first one, is what can I do to get them to actually show up? This probably looks something like a deposit that's going to be credited against the retainer should they decide to retain you, and then a guaranteed refund of the deposit if they decide not to retain you. So those are the refund of the deposit if they decide not to retain you. So those are the places where I would be looking to maximize my dollars and I would put a KPI around every single one of these. And the KPIs are only going to be important and they're only going to be useful for you if your sample set is large enough. So you've got to be hosting enough of these seminars and sending enough of these mailers that you're not suffering what I call random chance distribution of the numbers. Right, because if you're only getting one or two or three clients out of these, because you're only sending 100, 200, 300 of these mailers, well then your sample set isn't going to be big enough to know whether what you did worked or whether you just had the right lucky people show up that day. And so, as you start to dial in your processes, I want to challenge you to think bigger and to host bigger and bigger events, because that ultimately will drive the knowledge and the training and you getting better at every single one of these steps.
Speaker 1:So if you're crafting your first set of KPIs in your law firm, understand that you don't have to do it alone. Especially if you are the visionary in your law firm. You should recruit other people on your team who are better systems thinkers than you are, and you should probably, if you don't have somebody like that on your team, just go to ChatGPT. Just say ChatGPT, I want to create some KPIs around driving a number of new clients to my law firm. Here's where I think my clients are currently coming from.
Speaker 1:What metrics and ask ChatGPT for the lead and the lag metrics. What lead and lag metrics should I be looking at in order to drive more people to my law firm and then take those numbers and hand them to the staff and say, staff, does this look like an accurate representation of what's going on in our firm today, and what would it take for us to increase these numbers by 25 or 50 percent? And if we were able to increase these numbers by 25 or 50 percent, what would you like as a bonus? Because we've got to give our people great incentives tied to their performance, tied to the actual revenue and the dollars and the profit coming in at a law firm, so that they will do great work for us. Because we're really trying to build a culture where everybody wants a great experience for the clients and everybody wants a great experience and a place to stay in our law firms, and so that's kind of how I think about crafting my first set.
Speaker 1:And the thing is you only have to do one, start with one. Don't go back after this video and try to create KPIs around every single thing that your law firm does, because you are just going to frustrate your staff. Pick one area, just an area that you think is going to have the highest leverage. Maybe it's new clients, but I would suggest it's probably not. It's probably how do we get a better and a faster process in our firm to move people through the pipeline so that when I create the next set of KPIs and we have more clients coming through, they're running through faster, right? Let's get all the plumbing running correctly before we put more water through the pipes.
Speaker 1:So here's our reporting rhythm, and I'll close with this. The reporting rhythm at Bangalas Law is that everybody has a number that they're responsible for. Everybody on my team, from me down to the medical records collection clerk, has either a number or a percentage of cases that they're responsible for, and here's what I mean by that. Some people are responsible for collecting a certain number of medical records or shipping a certain number of demands, or doing a certain number of medical records. We're shipping a certain number of demands. We're doing a certain number of things. Other people are responsible for keeping our conversion ratio of cases that we want to cases that actually retain us high, and those numbers, depending on what they are, get reported on either our weekly EOS scorecard or quarterly, and I'll give you an example of that also.
Speaker 1:So the weekly medical requests that come in, that's something we can do on a week-to-week basis. Why? Because the numbers are high. But something like a conversion ratio is something that I want reported quarterly, because if I'm signing four or five clients a week and 20 clients a month, well now we're susceptible again to that random chance where if we had a really good week it's 100%. If we have a really crappy week it might only be 20%. 20% doesn't necessarily mean there's something wrong with our process. 100% doesn't mean anything's great about our process. But by expanding the data set we kind of remove those outlier small sample sizes, especially for the ratio numbers. We get better reflections.
Speaker 1:And then the last thing that I'll say on that is you have to look at a couple of periods and you have to look at the trend over time. Right, one bad week, one bad month, one bad period. That doesn't necessarily mean that something needs to be fixed in your firm. But if you see a steady decline or you see one area holding flat where everything else is increasing, that's an indication that now we need to go in and manage by the numbers and see if there's something in the process that we need to fix in order to get that changed.
Speaker 1:The last little piece on this and I think I said it is that everybody in your firm needs to be responsible for one thing. At least one thing, and only they should be responsible for it. If you have two people that are responsible for driving the number of medical rec, if you have two people that are responsible for driving the number of demands, if you have two people that are responsible for conversion rates, it doesn't work because it's easy to blame somebody else. But if you have one person who owns that process and who actually has the ability to make changes if changes need to be made, well, that's a recipe for success. And I want you to think about what you can assign when you come up with the.
Speaker 1:Here's the most important desert island numbers. Here's the 7 to the 12 numbers that I would want to know if I were on a desert island and it would be my leading indicator that I've got to get my butt back into the office and fix some stuff and who can you assign those to and what reporting intervals should they be tracked on? So that's KPIs, and that's how we use them in our law firm, if you've gotten some value out of this podcast. Do me a favor leave us a rating and a review. That really helps podcasts like mine grow. And share this with somebody else at your firm, because it is really hard to do this stuff on your own. If you were the only one who is listening to these firm growth self-development podcasts, get somebody on your team who can be your ally in building the data-driven law firm. Until next time,
