Lawyers evaluation – still very few KPIs used

Before we get into this discussion about the evaluation itself, we have to do an analysis of this specific professional and also contextualize him/her in the kind of company where he/she develops his/her job. Besides it, let us focus this discussion on the lawyer (partner or associate) of the so-called (here in Brazil) corporate offices that have their structure focused on the attendance of companies and in several areas of law.

As any and all “knowledge worker” (as Peter Druker says) his/her evaluation consists of several factors ranging from the strictly objective to the subjective ones and the definition of this mixing up is closely linked to the business philosophy adopted by the office where he/she is inserted.

As already mentioned in other previous discussions, a lawyer is a professional who has got a peculiar behavioral psychology and we have to understand it in order to analyze and understand the way he/she behaves.

Now, let us list a lawyer’s main psychological features: i– a very low tolerance to failures; ii-  a high level of skepticism, iii–  a great autonomy, iv – a high reasoning ability, v-a high abstract thinking, vi-a high sense of urgency, vii– a very low resilience and viii a low socialization ability. (by Caliper Human Strategies (UK) LTD).

With regard to the evaluator, there is a difficulty that usually emerges, which is the mixing up that some of them present between the subjective indicators and the qualification or the background of the professional. Factors such as the technical / academic background, previous professional experience, specializations, languages, etc., are factors of qualification and that should be taken into consideration at the time of the inclusion of this professional in the remuneration grid and in the career plan and should not be used in the periodic performance evaluation.

Another difficulty, this one in relation to the office and, which I consider to be the most important one, is the lack of more elaborate objective indicators (obtained in management reports that should exist to help in the economic-financial management of each office). As the majority of the small and mid-size offices still perform their management, which is insufficiently professional and computerized, the objective evaluation of their lawyers usually present a few indicators, such as appointments and invoiced hours.

The Performance indicators (KPIs) should be much more encompassing and only consider its variation during the analyzed period. This also becomes a barrier to be overcome, as, when it is implemented, the evaluation policy, ends up showing eventful previous distortions originated in the past of the professional, such as: i.-wrong insertion in the career plan and remuneration grid by the time of the contracting; ii.- insufficiently professional previous evaluations and iii.- lack of a well defined career plan. The same way we may not use pliers to fix a nail, but a hammer, one must not use the performance evaluation to correct those distortions.

Let us mention now some performance indicators that the lawyers should/ could be evaluated:

Productivity indicators:

billed hours / worked hours
billed hours/ target of the hours defined by the office
billed hours/ partners billed hours
billed hours in area matters / billed hours in other areas matters
billed hours in his/her matter / total hours billed in that matter (KPI for partners)
corrected or cut hours

Financial Indicators

net individual contribution (invoiced – salary)
worked gross amount / billed amount
billed amount / collect /received amount
% participation in profitable matters or not
growth in the period
profitability of the closed / concluded matters  (for partners)

Client acquisition Indicators / crossselling

client fee received in the period
new matters opened by indication
billed hours / amounts generated to other areas

Institutional Indicators

hours intended for speeches and organization of marketing events.
hours intended for articles and publications
hours dedicated to the performance of internal training sessions
hours dedicated to pro-bono
dedicated hours for office managing issues

Subjective indicators

technical evolution in the period
managerial evolution in the period (team)
evolution in the client’s management / matter (autonomy)
client’s degree of satisfaction (whenever there is this type of research)

In addition to those ones, we could list several other ones, but all of them will depend on the existing managerial reports, as well as on the definition of their mix of values and weights, on the work philosophy and market ranking of each office.

The support by an outsourced and experienced consultancy firm which is also exempt from internal political interactions may indeed help to find the solution of this challenge, as well as to define the specific model to the evaluation of these professionals.

José Paulo Graciotti, is consultant and founding Partner of GRACIOTTI ASSESSORIA EMPRESARIAL, engeneer by Escola Politécnica Universidade de São Paulo, with Financial MBA at FGV and specialized in Knowledge Mnagement by FGV. ILTA Member since 1998 (International Legal Technology Association) and ALA (Association of Legal Administrators), with more than 27 years managing Law Firms in Brazil – www.graciotti.com.br