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Metrics that Matter: How to Measure Law Firm Performance

Rebecca Spiegel

Written by

Rebecca Spiegel


May 26, 2023

Metrics that Matter: How to Measure Law Firm Performance

As a law firm leader, you know that mastering the ins and outs of your given legal practice area is only half the battle. In today’s competitive landscape, you’re also vying for new clients, looking for ways to be more profitable, seeking out opportunities for greater productivity, and more.

In other words, you’re a business owner, which means you hold the many responsibilities that come with that title: accounting (including trust accounting), marketing, operations, IT...the list goes on. But with so much on your plate, it can be hard to know where to focus your efforts to improve and expand your law firm in the years ahead.

That’s where law firm metrics come in. Law firm key performance indicators (KPIs) help you create a long-term business plan and optimize business development.

The age of Big Data is here, and the legal industry is no different. Modern law firm leaders are embracing the numbers that they can mine from their legal software to understand how their organization is performing today, make more informed decisions, and build tighter strategies that catapult their firms into the future.

Still trying to figure out where to start? We’re here to share the most important metrics you should track to measure your legal team’s performance, no matter how you bill or which area of law you practice. Let’s jump in.

The first step: start with a question

Ask any data scientist where they begin when analyzing a data set or choosing the best metrics to track, and they’ll tell you: “Start with a question.” What do you want to know? What problems are you hoping to solve at your firm, and what are your biggest goals for the year ahead?

Beginning with a list of questions you’d like to answer about your law firm’s performance will help you determine which metrics are the most important for your firm to monitor over the course of the year.  

For example:  

Let’s say a law firm aims to increase its profits by 25% this year. To reach that goal, they need to understand where their profit comes from today and what’s working to drive revenue. So they might ask:  

  • Which types of clients bring in the most profit?  
  • Which matter types collect the most billable hours?
  • Which marketing channels are most effective at bringing in new clients?
  • Which types of clients become repeat customers?  

From there, the team needs to align on the law firm Key Performance Indicators ( law firm KPIs) they’ll measure to answer these questions and build a strategy around the most profitable initiatives for their business.  

The most important metrics by billing type

While every law firm’s goals are different, and each may choose to prioritize different metrics, several commonly used KPIs exist to pull from. Here’s a look at how to measure your legal team performance based on your billing type.  

Fixed-fee/contingency billing:

Law firms that operate on a fixed fee or contingency billing structures require specific metrics to assess profitability accurately. These metrics might include:

  • The average fee per client
  • Growth in fees for top clients
  • Practice areas per client
  • Number of lawyers per client
  • Number of matters per client
  • Realization rate (fees collected compared to the total time spent on a matter)
  • Collection rate (how long does it take your clients to pay you?)
  • Write-off/write-down rate (the amount of fees that are written off due to non-billable work or discounts)

Hourly billing:  

Law firms that bill by the hour often focus on metrics related to productivity, profitability, and utilization of their legal professionals’ time:

  • Billable hours
  • Non-billable hours
  • Hours tracked per staff member
  • Realization rate (hours billed compared to the total time spent on a matter)  
  • Billing frequency (how often are you able to bill your clients?)
  • Collection rate (how long does it take your clients to pay you?)  

These KPIs can help law firms determine where there are inefficiencies, like too many or too few legal professionals assigned to a case or too much time spent on non-billable work. They can also help firms understand which types of work bring in the most revenue so that they can focus marketing and lead generation efforts on bringing in more similar work.  

Metrics by Area of Law:  

Different practice areas have unique dynamics and requirements. Measuring performance based on these areas allows law firms to identify strengths, weaknesses, and opportunities for law firm growth. Here are some of the most popular key metrics for each area of law:

Estate Planning:  

  • Number or percentages of potential clients, or leads, from which marketing sources or attorney referral programs
  • Conversion rate of potential clients from various marketing sources into retaining clients
  • Number of estate plans drafted
  • Average time spent per plan to understand which are most lucrative and, perhaps, how to adjust rates
  • Average case value (the average value of each estate planning case or transaction)
  • Estate plan completeness (the percentage of estate planning cases that result in a comprehensive and finalized estate plan)

Real Estate:  

  • Number of transactions/successful closings
  • Average transaction value
  • Average time spent on each case or any particular case to understand profitability
  • Time to close (the average time it takes to complete a real estate transaction from start to finish.)
  • Market share (the firm’s percentage of the local real estate market in terms of transactions or value)


  • Number of cases resolved
  • Trial success rate
  • Average time to resolve
  • Average time to payment
  • Amount of outstanding legal bills that need to be collected from clients
  • Age of outstanding and/or overdue legal client bills

Personal Injury:  

  • Number or percentages of potential clients, or leads, from which marketing sources or attorney referral programs
  • Conversion rate of potential clients from various marketing sources into retaining clients
  • Settlement amount
  • Case success rate
  • Average time to settlement

Civil Litigation:  

  • Case success rate
  • Average time to resolution
  • Client retention and referral


  • Number of new business clients
  • Number of contracts drafted
  • Average time per contract
  • Revenue per client
  • Revenue per matter type


  • Number of cases resolved
  • Time to resolution
  • Case success rate
  • Revenue per client
  • Time to collection/client payment of invoices
  • Percentage of invoices collected

More law firm KPIs to measure success  

We’ve looked at productivity and profitability by billing type and practice area—but what’s left? It turns out, legal professionals need to track a whole lot more to get a full picture of how their firm is performing.  

Growing a law firm isn’t just about signing new clients, completing case work, and collecting bills. It’s about everything that happens before—and after—a given case happens. That means marketing to potential leads and collecting client feedback and referrals after your work is done.  

To reach those goals, here are a few other key metrics that all law firms should consider:

Marketing KPIs

  • Website traffic and search rankings
  • Website conversions rate (new leads or potential clients collected)
  • Conversion rate of potential clients to retaining clients
  • Social media reach and engagement
  • Email marketing performance
  • Digital ad performance
  • Cost of acquiring a new client

Customer satisfaction KPIs

  • Net Promoter Score (NPS): assesses client satisfaction and likelihood to recommend the firm to others
  • Client retention rate: how many clients are repeat customers?  
  • Client referral rate: How many new clients came from a referral?  
  • Online reputation: What do your firm’s online reviews look like?  

Data-driven decisions to drive your firm into the future

Measuring legal team performance by tracking KPIs with law firm data is essential for law firms striving to optimize operations, enhance client satisfaction, and drive profitability. By tracking the right metrics, law firms can gain valuable insights into various aspects of their team’s performance, such as productivity, profitability, client satisfaction, and practice area effectiveness.

Measuring legal team performance is an ongoing process that requires continuous monitoring and adaptation. By using appropriate metrics and leveraging advanced reporting tools like Smokeball’s Law Firm Insights, law firms can proactively identify areas for improvement, optimize resource allocation, and elevate their overall performance.

Remember, the key to success lies in measuring performance and using the insights gained to implement targeted strategies that drive positive change and foster continuous law firm growth.

Find out how Smokeball’s Law Firm Insights puts the right legal metrics into your firm’s hands.

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