Tressler Partner and Chicago office Managing Partner, D.J. Sartorio, has authored “Management Playlist: Measure twice, cut once,” published by the Chicago Lawyer, Sept. 1, 2013. D.J.’s Management Playlist column appears monthly in Chicago Lawyer magazine.
In “Management Playlist: Measure twice, cut once,” D.J. writes that law firms are good at measuring things such as billable hours, profits per partner and net income. “These measurements have two things in common. First, they are relatively easy to make. Essentially, it’s counting,” he writes. “Second, they are inward-looking. They have almost nothing to do with the behaviors clients care about.”
While D.J. acknowledges that these can be important tools in running a business, law firm management should recognize the difference between using such numbers to measure performance versus using them to drive behavior. “We should be sure that we are providing desired services to generate revenue, not generating desired revenue by providing services,” he writes. “There is a distinction — and it is one that clients recognize.”
As the market for outside legal services becomes increasingly more competitive, the “winners” will be those who improve the quality of their product. Yet the only things that many firms measure are, at best, peripheral to what clients value and, at worst, contrary.
After quoting strategy consultant John H. Lingle, who said: “You get what you measure. Measure the wrong thing and you get the wrong behaviors,” D.J. advises: “We must stop focusing on the things that interest us. The most predictive long-term performance metrics are those with a direct relationship to client satisfaction and loyalty.”
He continues, “In the words of business consultant Peter Drucker, ‘What’s measured improves,’… law firms that measure and improve on things their clients value will fare better in today’s business climate. Figuring out the right things to measure and improve has never been more important.”
While D.J. concedes that adding to the bucket of data firm’s collect may be time-consuming and unpopular, it doesn’t have to be complicated. Also, some of the questions may illicit more subjective answers than firms are accustomed to, but clients are already paying attention to the answers to these types of questions.
D.J. concludes that demand for outside legal services is shrinking. The key to adapting will not be found exclusively on the expense side of a law firm’s financial statements. “As a profession,” he writes, “we need to reorient, much like travel agents, stockbrokers, booksellers and others have done in the face of fundamental shifts in demand in their industries. Not only must we add value as outside counsel, we must be able to prove it….As Albert Einstein said: “Not everything that counts can be counted and not everything that can be counted counts.”
For a copy of the article, please visit the Chicago Lawyer magazine’s website by CLICKING HERE. Alternatively, you may contact the author directly at email@example.com or 312-627-4093.
About the Author
D.J. Sartorio has more than 30 years experience as an insurance and appellate lawyer. He has extensive experience representing insurance companies in litigation, coverage analysis and underwriting consulting. He has successfully handled appeals throughout the United States, including one that changed Illinois law with respect to expert disclosures. Active in firm management, D.J. has served on Tressler’s four-person Executive Committee, which is the governing body of the firm, since 2001, and presently also serves as Managing Partner of the firm’s Chicago office.