Benchmarking Your Firm’s Performance to Drive Continuous Performance
Before embarking on a change programme, it is important to conduct a financial review to understand how your firm is currently performing and where you want to be within a specified timeframe.
The review is conducted by benchmarking your firm’s current performance using several legal sector benchmarking surveys and a detailed checklist which focuses on financial performance and key performance indicators. The results are benchmarked against the performance of similar sized law firms that will identify areas where your firm is competitive and areas that need to be improved.
Depending upon the needs of your firm the scope of the benchmarking exercise can be widened to include areas such as business planning, risk management and compliance, business development and marketing and human resources, giving a holistic view of the operational and financial performance of the firm.
The benchmarking approach is an invaluable way to focus your attention and identify where there are weaknesses or threats and where you need to begin your improvements to drive competitiveness and profitability in your firm.
To support improved financial performance in your firm, each department should be organised as its own strategic business unit with the Head of Department empowered to run the department and accountable for its performance against a range of key performance indicators, the most important of which is the gross profit percentage.
By empowering your Heads of Departments to manage, lead and grow their departments they will be able to move more quickly to address the needs of their clients and markets, driving up profitability as a result.
There may be circumstances, however, where a particular department, practice area or branch office is not achieving its full potential and underperforming. There may be one or many reasons causing departmental or office underperformance.
Cpm21 can work with you to conduct a deep dive into what is going wrong, identify the barriers that are holding performance back, and put a plan in place that addresses this by:
- Reviewing the historic performance of the department or office and benchmark against its peers.
- Conducting interviews with partners and teams to gain their thoughts on the causes, internal and/or external factors, and ideas for improving performance – independently if necessary to gain candid responses.
- Reviewing the roles performed, reporting structures and processes to ensure maximum efficiencies.
- Identifying the issues that need to be addressed to improve performance; and
- Preparing an action plan that will specify what needs to be done, by whom and when, and measurement.
If you feel that a deep dive analysis into the performance of your firm is necessary or are considering moving to a strategic business unit framework, cpm21 would be delighted to assist.