Law Firm KPIs to Measure Profitability 

No matter how healthy you think your firm is, there may be critical issues you haven’t even considered. More and more law firms are failing. Download this stress test checklist to evaluate the health of your firm.

An annual stress test can be a valuable tool to identify potential weaknesses and avoid the pitfalls that caused the downfall of so many prominent law firms. A clean bill of health goes a long way to relieve anxiety, for both existing and potential partners, about the ability for a firm to remain a viable organization for the long-term.

This checklist looks at firm performance in 5 key areas:

  • Firm governance
  • Financial reporting 
  • Risk management 
  • Fiduciary practices
  • Financial health

Some law firms have resisted the idea of using key performance indicators to manage their businesses. But successful firms know that measuring profitability can lead to improved performance.

There are an infinite number of KPIs you can measure, but you can't look at everything. The following indicators are among the most valuable to analyze financial results and make managerial decisions. 

This checklist looks at KPIs in three key areas:

  • Productivity KPIs
  • Financial KPIs
  • Client-related KPIs

Contact Professional 

Steven A. Davis, CPA
Entrepreneurial Services Principal