"That's why it's critical for law firms to position themselves for long-term success by building economic resilience. Doing so means strengthening your firm's fundamentals while always being aware of what could be coming next. "Just because you have your books and you get your financials, that's just a report of what has happened," says Kelley Brubaker, a fractional CFO and host of the "Your Profitable Law Firm Podcast.""
"Metrics like billable hours and revenue, while important, won't give you the full picture of financial health and resilience. When Kelley works with a client to determine their KPIs, she matches the metrics they track to their goals for the firm. Each practice is different, she notes, and therefore she would expect five different firms to each have their own unique KPIs to track."
Even during boom times, economic challenges can appear unexpectedly. Law firms should build economic resilience by strengthening fundamentals and maintaining constant awareness of future risks. Firms must align KPIs to strategic goals rather than relying solely on standard metrics like billable hours and revenue. Organize metrics into past (P&L, revenue), present (bank balance), and future (incoming leads) to gain a full financial picture. Track lead volume and conversion through the intake funnel to forecast revenue and staffing needs. Each practice should select KPIs tailored to its goals, enabling proactive decisions and long-term stability.
Read at Above the Law
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