Produce Department: 3 Ways to Track Staff Performance
Many law firms default to using subjective methods to define staff performance – which, frankly, isn’t good for anybody. Your employees have no idea how they’re being judged, since there is no objective criteria in place; and, you’re kind of winging it, too, as an owner or managing partner, which makes it almost impossible to justify anything you do.
There are, however, ways to measure the performance of your staff, and those effectively break down across three categories: (1) Efficiency; (2) Proficiency; (3) Profitability.
In determining efficiency, you basically want to know how quickly your staff get through their work projects, and how much billable time your billers log in any given day. To track the latter, you can utilize a metric like utilization rate -- which measure the billable time an attorney or staffperson records each day as a percentage of their total work time, eg: a 25% utilization rate works out to 2 billed hours in an 8-hour day. To track the former, you can measure project completion time and/or ‘phase time’ (which indicates how quickly one moves from one stage of a project or case, to the next). Both are valuable metrics in their own right. And, by adding efficiency, your goal is simply to accommodate more work, which will necessarily increase your revenue.
In determining proficiency, you’re looking to measure how effective your staff is at their various jobs. So, you can grade their work product on recurring basis, and build a metric off of that. For example, for associate attorneys, you can grade 10 assignments each year on a scale of 1-10, or A-F, and use those results as part of a performance review.
In determining profitability, you’re seeking to judge how much your employee makes versus how much you pay them + how much it costs to retain them. So, you’re simply calculating revenue generated, and subtracting the carrying costs for the employee, including salary and bonuses.
Congratulations – now, you have three, broad objective methods you can use to track and review employee performance.
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The Rhode Island Bar Association offers free law practice management consulting services through Red Cave Law Firm Consulting.
To request a consult, visit the Rhode Island Bar’s law practice management page, and start running your law firm like a business.