Post on 08-May-2015
Key Performance Indicators
Knowing the Numbers That Run Your Law Firm
By The Rainmaker Institute
www.TheRainmakerInstitute.com
888-588-8591
© 2012 by The Rainmaker Institute, LLC
About Stephen Fairley
CEO of The Rainmaker Institute—the nation’s largest law firm marketing company that specializes in helping small law firms generate more referrals and convert more leads
Developed the first automated lead conversion follow-up system for attorneys
Coached, trained and spoken to more than 8,000 attorneys
Nationally recognized expert on internet marketing, blogging, and social media for attorneys
Academically trained as a Clinical Psychologist
International best-selling author of 10 books and 8 audio learning programs
World traveler: Visited over 32 countries and taken 13 cruises
www.TheRainmakerInstitute.com
Overview of Today’s Webinar
• 2 necessary components to a successful law firm
• Identify 7 Systems every law firm must have
• Define Key Performance Indicators (KPIs)
• 12 Critical Key Performance Indicators
• Using software to track your KPIs
• Roles and Responsibilities
Here’s the Bottom Line...
The PEOPLE run your SYSTEMS...
The SYSTEMS run your LAW FIRM!
7 Systems Every Law Firm Needs
1. Lead Generation System
2. Lead Conversion System
3. Client Retention System
4. Cash Flow System
5. Work Flow System
6. Management Operations System
7. Key Performance Indicators Systems
Lead Generation • 2nd most expensive activity in your law firm
• Never ending process
• Need to continually produce more & better leads
Lead Conversion • Convert more leads into paying clients
• Turn more browsers into buyers
• Has the most potential for massive revenue increase
Client Retention • Get Clients for Life!
• Repeat business and repeat referrals
• Put systems, processes and procedures in place
Lead Generation System
Use both “Online” and “Offline” marketing
Don’t put all your eggs in 1 basket!
Create a 90 day Marketing Action Plan (MAP)
5 Easy Steps to Create Your Law Firm Marketing Plan
Free Resource: www.TheRainmakerReport.com
Lead Conversion System
Convert More Prospects Into Paying Clients
Turn More Browsers Into Buyers
Lead Conversion is Critical!
It is much cheaper than Lead Generation and has the ability to Rapidly Increase Your Revenues!
When using a Lead Conversion System, many law firms see a significant increase in revenues in 90-120 days
• Most attorneys believe they are “good, very
good, or excellent” at conversion...
• Most of them are WRONG!
• Why?
• There are 5 Stages of Conversion and they only
focus on the 4th one!
How Good Are You At Conversion?
5 Stages of Lead Conversion
1. Number of Leads into the top of the funnel
2. Number of Leads that turn into Appointments
3. Number of Appointments Who Show Up
4. Number of Appointments Who Sign Up at the IC
5. Number of Appointments who Sign Up Later
Lead Conversion Report Card
A = Over 81%
B = 71-80%
C = 61-70%
D = 51-60%
F = Under 50%
Typical Law Firm
WITHOUT a Lead Conversion System
100 Leads = 100%
52 Appointments Set = 52%
23 Appointments Show Up = 44%
12 Sign Ups (New Retentions) = 52%
1 Sign Ups ~ 90 Days Later = 8%
Total New Client Sign Ups = 13%
Results
13 New Clients x $5,000 Per Client = $65,000 Revenues
Law Firm
WITH the Rainmaker Lead Conversion System
100 Leads = 100%
70 Appointments Set = 70%
49 Appointments Show Up = 49%
34 Sign Ups (New Retentions) = 34%
3 Sign Ups ~ 90 Days Later = 3%
Total New Client Sign Ups = 37%
Results
37 New Clients x $5,000 Per Client = $185,000 Revenues
Revenue Results From 100 Leads
WITHOUT a Lead Conversion System
Out of 100 Leads the Law Firm converted...
13 New Clients x $5,000 Per Client = $65,000 Revenues
WITH a Lead Conversion System
Out of 100 Leads the Law Firm converted...
37 New Clients x $5,000 Per Client = $185,000 Revenues
Net Increase of $120,000!
285% Increase!
With the SAME amount of Leads!
What kind of conversion problems do they have?
Report Card
A = Over 81%
B = 71-80%
C = 61-70%
D = 51-60%
F = Under 50%
Conversion Problems:
1. Major problem with “No
Shows” (29%)
2. Poor Conversion at the
IC (32%)
3. No Follow Up after IC
4. No one converts 96%
of Leads into Appts!
Up From 7%!
Total
Number of
New Clients:
77!
Up From 17
Up From 29%!
Results After Implementing a Lead Conversion System
Results from Lead Conversion System Before After
Appointments Kept 29% 70% 240% Increase
Clients Signed Up Later 7% 28% 400% Increase
Total Number of New
Clients 17 77 450%
Increase!
If this was your law firm…
Average Client Value of Contested Divorce: $10,000 to $15,000
Potential Revenues…
WITHOUT a Lead Conversion System: $170,000 to $255,000
WITH a Lead Conversion System: $770,000 to $1,155,000
Key Performance Indicators!
• The key metrics that make
your law firm run
• Develop a report card that
will give the Managing
Partner / Owners a
comprehensive snapshot of
all critical numbers and
metrics that can be
measured on a weekly,
monthly, and quarterly
basis
12 Critical Key Performance Indicators
1. Number of Leads Per Month & Where the Leads
Came From
Clearly define what a “Lead” is to your law firm
Define the time frame so you can compare
Internet
Social Media
Client Referral
Professional Referral
Client Seminar
MCLE Workshop / Professional Presentation
Networking Event
Sponsored Firm Event
For Tracking Use Unique:
• Phone numbers:
CallMyLawFirmToday.com
• Email addresses
• Websites
2. Number of Appointments Per Month
How many Appointments were made
How many Appointments were kept (show ups)
3. Number of New Clients or Retentions Per Month
4. Total Amount of New Retainer Agreements
What’s the total amount of potential money from all the
new retainer agreements the firm signed up that month?
Not how much is actually collected
5. Total Amount of Cash In the Door Each Month
This is a cash flow issue
Cash flow is the biggest concern of most Partners!
6. Total Amount of Marketing Costs Per Month
Identify how you will define “marketing spend”
Do you include Staff and Attorney time? Yes and No
Yes = If you have a person dedicated to marketing
Yes = If a % of their time is focused on marketing
No = If it’s an Attorney or a staff member who
occasionally helps with marketing
7. Average Cost Per Lead for that Month
Define what a “LEAD” is
What is and is not counted as a “Lead”
Who counts the “Leads”
Here’s how we (TRI) define a “Lead”:
Someone who has never done business with you before
(vs a repeat client)
Everyone who contacts the firm via email, phone, social
media, personal referral, internet, networking event,
seminar, etc
They express an interest in your services
Cost Per Lead (CPL) Metric
• Avoid arguing about what a “qualified” lead is...
• How many “Leads” are produced in a given time
frame?
• How much money did the firm invest in marketing
during the same time frame?
• Divide $$$ invested by # of Leads
• Compare month vs quarter vs annual
• Running average
$20,000 spend / 40 New Leads = $500 CPL
Is that Good or Bad?
8. Average Cost Per Client for that Month
Define what a “New Client” is for your law firm
Here’s how we at TRI define a “New Client”:
Someone who pays the firm money!
Anyone who signs a retainer agreement
Does not depend on billing the client
Does not depend on doing the client work
Does not depend on collecting the money (that’s A/Rs
job not marketing)
Cost Per Client (CPC) Metric
• How many “Clients” are retained/signed up in a
given time frame?
• How much money did the firm invest in marketing
during the same time frame?
• Divide $$$ invested by # of New Clients
• Compare month vs quarter vs annual
• Establish a Running Average
$20,000 spend / 40 New Leads and 10 New Clients
= $2,000 CPC
Is that Good or Bad?
9. Estimated Return On Investment for Marketing
Set realistic time frames for ROI
How to measure ROI:
• Cost of Marketing = How much you invested in marketing
• Gross Revenues = Amount of Gross Revenues generated
• ROI = Return On Investment
10.Total Amount of Payroll Expenses
Each Month
11.Total Amount of Non-Payroll
Expenses Each Month
12.Total Amount of Net Operating
Income or Net Profit Per Month
Next Steps 1. Go to www.OneSmartAttorney.com OR Call our office and ask to
speak with one of our highly trained Rainmaker Advisors.
2. They will set up a 45 minute Strategy Session to help you better apply
this information to your law firm.
3. They will gather some information about your law firm, answer all your
questions, and give you some specifics about how to integrate KPIs.
4. There is No Charge for this Strategy Session.
Call: 888-588-5891 or
www.OneSmartAttorney.com or
Email: Maria@TheRainmakerInstitute.com
Stephen Fairley
CEO of The Rainmaker Institute, LLC
Stephen@TheRainmakerInstitute.com
www.TheRainmakerInstitute.com
www.TheRainmakerBlog.com
888-588-5891
© 2012 by The Rainmaker Institute, LLC.
All rights reserved.
THANK YOU!!