LAWYERS´EVALUATIONS: STILL VERY FEW KPIs USED

21/07/2017 – Lawyers’ Evaluations: Still Very Few KPIs Used | Legal Management – Association os Legal Administrators

LAWYERS´EVALUATIONS: STILL VERY FEW KPIs USED

By Jose Paulo Graciotti

According to Management Consultant Peter Drucker, knowledge workers

are individuals who have “high degrees of expertise, education or

experience and the primary purpose of their jobs involves the creation,

distribution or application of knowledge.” Their evaluations consist of

several factors ranging from the strictly objective to the more subjective

and they can be defined by the business philosophy of the office where

they work.

 

Before evaluating an individual’s work, we should do an analysis of this specific professional and

contextualize him or her in the kind of company where he or she works. The focus for this article

is the lawyer (partner or associate).

We have to understand the particular behavioral psychology of a lawyer to analyze and

understand the way he or she behaves.

According to Caliper Human Strategies (UK) Ltd., the following are some of a lawyer’s main

psychological features:

  • Very low tolerance to failures
  • High level of skepticism
  • Great autonomy
  • High reasoning ability
  • High abstract thinking
  • High sense of urgency
  • Very low resilience
  • Low socialization ability

 

Evaluators usually have some difficulties because they mix up some of the subjective indicators

and the qualification or the background of the professional. Qualification factors — such as the

technical or academic background, previous professional experience, specializations and

languages — should only be taken into consideration at the time of the inclusion of this

professional in the remuneration grid and in his or her career plan. They should not be used in

the individual’s periodic performance evaluation.

Another important factor that makes properly conducting an evaluation more difficult is in

relation to the office: the lack of more elaborate objective indicators (obtained in management

reports that should exist to help in the economic-financial management of each office). Many

small and midsize offices still perform their own management, which is insufficiently professional

and computerized. As such, the objective evaluation of their lawyers usually present a few

indicators, such as appointments and invoiced hours.

The key performance indicators (KPI) should be much more encompassing and only consider its

variation during the analyzed period. Then, there is a new barrier to overcome, as, when

implemented, the evaluation policy ends up showing eventful previous distortions originated in

the past of the professional, such as:

 

Wrong insertion in the career plan and remuneration grid by the time of the contracting

Insufficiently professional previous evaluations

Lack of a well-defined career plan

The same way we wouldn’t use pliers in place of a hammer, we must not use the performance

evaluation to correct those distortions.

Lawyers could and should be evaluated on some of the following performance indicators:

 

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 or 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
  • Percent participation in profitable matters or not
  • Growth in the period
  • Profitability of the closed/concluded matters (for partners)

 

CLIENT ACQUISITION INDICATORS/CROSS-SELLING:

  • 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 INDICATOR:

  • 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 KPIs listed here, we could add several others. However, it 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.

Gaining the support of an outsourced and experienced consultancy firm — which is also exempt

from internal political interactions — may not only help with this challenge, but also with

defining the specific model to the evaluation of these professionals.

 

ABOUT THE AUTHOR

Jose Paulo Graciotti is a Consultant with Graciotti Assessoria Empresarial and an ALA member. He

specializes in the governance, planning and organization areas, with sound knowledge in

information technology and knowledge management. For the last 28 years, he was responsible

for management and information governance on outstanding law firms in Brazil.

 

Lawyers’ Evaluations: Still Very Few KPIs Used | Legal Management

http://www.legalmanagement.org/departments/lawyers%E2%80%99-evaluations-still-very-few-kpis-used

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Our participation on the debate “Collaboration Platform in the Legal World” – ILTACON 2017

With honor and privilege I share with all my participation on the debate: “ ThreadKM 2.0 Collaboration Platform: Changing the way the Legal World Communicates” at ILTACON 2017  which will take place at Mandalay Bay, Las Vegas next August 13th thru 17th.

The Conflict between practicing law and managing the business

The Conflict between practicing law and managing the business: when this problem emerges and how to solve it.

In one of my first metaphorical comparisons about the business called LAW FIRMS, I compared them to a restaurant, asking the following question: What makes a person go (or return) to a certain restaurant?

The answer was (and still is): great food, great treatment/services and consistent price!

As it has already been mentioned, Law Firms perfectly fit in this answer, only replacing the expression “great food” with “great legal solutions”, or “great legal solutions, great treatment/services and consistent prices!

For this to be possible, we shall need great professionals (legal or managerial), current systems and technology, much training and mainly a properly sized and very good organization and it is at this very point that the mentioned conflicts begin to appear.

I again need, in this moment, to refer to the natural evolution of a law firm after its creation. We have already seen that offices are generally set up by the agglutination of two or more legal professionals who, due to several reasons (complementation of areas, professional affinities, entrepreneurship, personal and ethical objectives, etc.) get together and set up a law firm.

Again, the metaphorical comparison with a restaurant becomes illustrative, as we can compare the lawyer(s) that hold the knowledge and the technical skills to provide ideal legal solutions to their clients, to a Chef that also holds the knowledge and skills to make delicious dishes.

Now, let us imagine that this Chef in the evening (just as an example) will be heading the production of those dishes, but he also has to worry mainly about the correct choice and purchase of the products (meat, fish, vegetables, seasonings, etc.); with the contracting and training of maîtres, sommeliers, waiters, receptionists, etc.; with the decoration and presentation of the tables and, at last, with the financial aspects of the business called the “restaurant”.

In the same way a Chef likes to create and make his dishes,  the lawyers also like to advocate and create legal solutions to their challenges, but they must also worry about  all the other tasks and decisions that are inherent  to the managing of their business and that are generally regarded as “boring obligations” or” necessary evil”.

As the business grows, (because of the good dishes or the great legal solutions offered), it is natural that the management becomes more and more complex, requiring  the Chef’s or the manager partner’s  more and more attention and “stealing” their time in the production of their technical works (to which they so much like to dedicate).

The solution to this conflict comes up when the company (whatever it is) begins to worry about the other back-office works, as important as the ones of the so-called “core business”, which are necessary for the fulfillment of other requirements in order to be successful.

The correct dimensioning and training of the administrative team of a good technical level; the adoption of the current technological infrastructure and correctly adapted to the business; the constant training and improvement of all members of the company and, mainly,everyone’s alignment to the company’s ´philosophy, are fundamental to relieve the managing lawyer, giving him more time to dedicate himself to the legal production.

All those aspects, added to the delivered product, enable the company to achieve the quality that is necessary to satisfyits clients and this answers our initial question!

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 28 years managing Law Firms in Brazil – www.graciotti.com.br

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