How to Set Law Firm Goals That Boost Profits and Productivity
May 3, 2023
Reviews are a great way to analyze employees’ past performance, but law firm goal-setting is far more effective in shaping how individuals, teams, and entire firms operate in the future. And now that most law firms offer some version of a hybrid work model, law firm goals are an effective way to keep teams grounded in your firm’s culture and long-term vision.
We’ve previously written about the importance of conducting regular performance reviews. These check-ins help individuals assess their performance, understand their personal strengths and weaknesses, provide invaluable mentorship opportunities and allow employees to provide their own feedback — aiding effective collaboration moving forward.
Let’s dive into how law firms should set, assess and achieve long-term goals.
The benefits of effective law firm goal-setting
Goals give our work meaning and keep us motivated. Having a goal means that we know what we want to achieve — and we won’t stop until we get there. According to McKinsey, “goal-setting can help improve employee engagement in a way which elevates performance and benefits organizations overall”. Win-win.
Goal-setting is a core aspect of effective performance management. By specifically identifying what they want to achieve, individuals, teams, and entire firms can properly assess their performance as they progress toward achieving the goal. Senior leaders will understand which employees are outperforming expectations and can reward them with greater compensation, a new title, and more responsibility. This is key to ensuring the firm’s ongoing success.
Goals also ensure that everybody keeps the bigger picture in mind — both personally and across the entire firm. Ideally, every employee’s goals will contribute to your firm’s overall performance and will aid effective collaboration. It’s impossible to successfully work together if you don’t even know what you’re trying to achieve.
What sort of law firm goals should your team set?
Goal-setting is far from a prescriptive process — the best goals are intrinsically motivated. Encourage individuals and teams to pursue goals they are inherently passionate about rather than trying to force benchmarks on them.
A few main categories of goals might apply across your firm:
Yes, valuable fee-earners should be encouraged and incentivized to increase their billed hours and collections rates at law firms. But there are other types of financial law firm goals, and other ways of reaching them:
- By capturing more billable hours. Rather than forcing more hours on already-burned-out teams, make sure you’re actually capturing all the work they do for clients. On average, Smokeball legal practice management software clients bill for 34% more time, thanks to automatic time tracking software that bill for every minute spent in our software.
- By increasing efficiency. Think flat-fee firms can only increase profitability by increasing their fees? Think again. Your firm can reduce its hours worked against your fee charged by increasing efficiency. Smokeball’s Law Firm Insights pull data from your automatic time tracking to show profitability by matter and fee earner, so you can understand your profitability and set goals to improve.
- By retaining more — and more profitable — clients. Your firm serves clients of many types and backgrounds, but understanding which ones have the biggest impact on your bottom line helps you set financial goals. Smokeball’s Firm Insights also reveal profitability by matter type, realization, and more, so you can zero in on success.
Our legal practice management software also helps boost pesky collection rates, thanks to auto-generated invoices that draw from your matter details, seamless integration with LawPay, and more. Plus, Smokeball now allows for automatic credit card charges for clients on a payment plan.
Business Growth Goals
Setting specific business growth goals allows you to work towards specific growth. Lawyers should think big picture of what they want to achieve ultimately, what they think the near future will look like, and then reflect on the recent past. From there, they can narrow down to specifics such as:
- Ideal numbers of new cases or clients
- With targeted client growth, hiring goals for more legal professionals
- Growth into new geographic markets or practice areas
As you think about growth, consider who will oversee your business growth goals. Some law firms employ a dedicated professional responsible for business development. A business development manager may participate in marketing efforts but will focus on business growth, including establishing referral relationships with other attorneys and improving reputation management, such as asking clients for reviews.
Law firm marketing goals focus on driving new client acquisition for your law office and may be related to
- Building a high-performance website;
- Website content writing and search engine optimization;
- Offering webinars;
- Live chat features on websites;
- Social media marketing;
- Pay-Per-Click marketing;
- Organic search engine optimization;
- Obtaining ratings and reviews;
- Marketing a new practice area;
Business Management & Operations Goals
Operations goals might involve process improvements for law firms, such as:
- Improving and modernizing your legal intake and onboarding process;
- Increasing employee retention;
- Investing in new technology, such as legal practice management software.
All attorneys are required to complete a certain number of continuing legal education (CLE) credits, depending on your jurisdiction (Check out upcoming free CLE sessions offered by Smokeball). CLE shouldn’t feel like a burden; rather it’s an opportunity for attorneys to explore areas of interest, share their learnings with the firm and provide better service to their clients and communities.
For aspiring lawyers, paralegal and staff roles can serve as a stepping stone in the path toward their JD; if this is the case at your firm, provide time and mentorship for team members to pursue educational goals like studying for (and taking) the LSAT. By supporting employees with their long-term educational goals, they’ll feel your firm truly has their best interests at heart, and they’ll be more engaged in the workplace.
Understandably, most law firms have struggled to support their existing culture in the wake of COVID-19. Nearly two-thirds (64%) of firms who participated in Smokeball’s upcoming Law + The Great Resignation survey told us the pandemic has negatively affected their culture.
We also identified an area where law firms can immediately focus their goals: Burnout. More than two-thirds (68%) of respondents told us they personally experienced burnout. But respondents were most likely to say less than 10% of their employees also reported burnout (34%).
That doesn’t mean employees aren’t burned out — it’s more likely they’re not comfortable talking about it. Help your team set goals that promote a culture of mental wellness — discuss your own burnout; take their teambuilding and anti-burnout suggestions seriously; and set timelines for using vacation days. Smokeball’s Firm Insights also offer value here: They show which employees are working the most hours, potentially burning the candle at both ends.
How to Set SMART Lawyer Goals?
Keep these eight best practices in mind when working with your team to set long-term law firm goals:
1. Review the Previous Year's Goals and Performance
It can be difficult to look at your firm’s failures and shortcomings, but you must review what has worked for your law firm, and what has not. Consider law firm growth in the following areas:
- Marketing performance
- Client acquisition/new matters
- Sources of new clients' cases (internet ad, website visit, social media, attorney referral service, etc.)
- Client satisfaction/reviews
- Billable hours
- Collection rates
- Individual performance
- Revenue billed vs revenue collected
- Employee turnover
The above list is certainly not comprehensive, but is a good starting point. It can be helpful to involve your law office team in the law firm goals process, as they may identify OFIs (opportunities for improvement). If your team is involved in the goal-setting process, you are more likely to get their buy-in when it comes to making changes.
2. Identify Your Biggest Pain Points
Every business has pain points - specific problems. Your pain points are not necessarily commonplace in the legal industry - but they are experienced by your law office and may result from how the office is managed, hiring practices, resistance to modernization, etc. Examples of law firm pain points may be:
- Your website doesn’t rank in search engine results;
- 75% of your revenues come from one referral source which you may lose in the future;
- You constantly receive negative Google reviews;
- Payroll is often late, and several employees have quit as a result;
- You are using obsolete technology, such as paper intake forms;
You may be able to identify pain points by reading reviews and comparing them to your competitors’ reviews. Also, ask your clients for feedback on how things are going, before their matter is wrapped up. Ideally, you can foster a dialogue with your clients where you will be given the opportunity to improve your service before your client writes a review in a public forum.
3. Make Sure You Set SMART Goals
You have likely heard of SMART goals, a concept that dates back to the early 80s and provides guidance for how to set goals. SMART goals should be:
- Specific: For example, your goal may be to “be a more successful law firm” - but what does this mean? Does success mean more clients, more settlements, an additional stream of income from leads that you refer out? You need to define your goal, such as “Increase law firm revenue by 50% next year, and an additional 30% the following year.”
- Measurable: However you write your goal, it should establish what constitutes success. If your goal is to improve your search engine ranking for your city and practice area, you should define how many website visitors you need to achieve your goal. Make sure you have law firm key performance indicators to measure your progress.
- Achievable: Dreaming and high aspirations are all well and good, but if you just started your law firm, a goal of being voted “Attorney of the Year” next year by your state bar association is probably not achievable. For you to invest time and resources into a goal, it should be achievable.
- Relevant: You may want to buy a new home, run for City Council, or read 50 books this year. Those goals are good, but not relevant to your law firm growth and should not be the focus of your law office.
- Time-Bound: Goals should be achievable in a realistic period of time. For digital marketing goals, you might set a goal of 1,000 unique website visitors each month, this year. This may or may not be realistic based on your current online presence.
There’s no point in setting unclear goals that your staff can’t achieve, that you can’t assess, and that are irrelevant to the individual or the firm’s success.
Examples of SMART goals for lawyers
- Send out one client newsletter by the 15th of each month.
- Publish at least one press release each quarter.
- Increase each partner’s billable hours by 10 each month this year, based on prior hours billed last year.
4. Prioritize Goals
Think of goal prioritization as triaging. If you appropriately crafted your law firm's smart goals, all of your goals are relevant. But one smart goal may be more critical than others, and your spending budget may not allow you to fund your goals all at once. If your business is in need of more revenue, funding a digital marketing campaign will likely be more urgent than professional development opportunities you would like to offer your paralegal staff.
5. Create a Milestone Timeline
Think of milestones as rungs on a ladder or steps on a path - toward a smart goal. Milestones transform projects into processes by breaking down goals into steps - but with a specific date tied to them. In order to achieve a goal, milestones must be met. Having milestones scheduled on your calendar can keep stakeholders accountable and prevent unnecessary procrastination and delays.
6. Measure Your Goals
Earlier we touched on making smart goals measurable, and specifically defining what will constitute progress toward and ultimately reaching a goal. You need to regularly review that progress and determine if you are reaching your goals, or need to adjust your efforts. For example, if your smart goal is to sign up 3 new personal injury cases each month, you need to review each month how many cases you signed up.
Many law firm goals can be measured using Key Performance Indicators (KPIs), which may be included in firm performance metrics in your legal practice management software.
7. Remember: Intrinsically-Motivated Goals Work Best
A 2012 study showed that employees are three times more engaged when pursuing intrinsically motivated goals at work than pursuing extrinsically motivated goals. McKinsey research backs this up, revealing that intrinsically motivated employees show 46% higher job satisfaction and are 32% more committed to their jobs.
Don’t just impose arbitrary smart goals on your staff. Instead, let employees tell you what they want to achieve and, if possible, connect their individual goals and motivations to the firm’s future success by involving your team and securing their buy-in.
8. Recognize and Reward Those Who Achieve Their Goals
We all like to be recognized for a job well done. If staff work hard and achieve challenging goals, remember to celebrate them. Use tangible numbers from Smokeball’s Law Firm Insights to inform bonuses or incentives, taking the guesswork out of identifying consistent outperformance.
Always champion employees who pursue tough goals, raise their own performance levels and make the firm more effective as a result. This will go a long way to creating a culture of consistent outperformance.
Achieve Success with Smokeball
Whether you have been thinking about your goals for weeks, months, or years, taking that first step is critical. Smokeball’s award-winning law practice management software offers the support and resources you need to improve processes and reach success. Ready to see how we can help you reach your law firm marketing goals? Contact us today to book a demo.
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