What Message is Your Firm Sending About What it Values by What it Measures?

I read an interesting article yesterday morning from CRMGuru.com by David Rance, a UK consultant who helps organizations become more customer-centric. The article was entitled The Madness of Metrics: Be Careful What You Measure, and it got me thinking, once again, about law firms.

Take a moment and consider what it is that your firm measures. Where is the emphasis? Is it on the firm’s stated values, or are your measurements actually in conflict with those values?

Rance’s article opens with a story about a customer service call center whose manager was concerned about response to correspondence received by the call center. The manager instituted a program whereby all unanswered letters were counted at the end of every month. He was surprised to learn that there were no unanswered letters several months in a row. This was particularly surprising since he had observed stacks of letters on desks in the department. He learned accidentally that the reason the monthly count was low was that the employees gathered all the letters at the end of the month and sent them to another department. They were returned to customer service in about a week, but they were out of the department at the time the count was performed.

This may seem like an extreme example, but many law firms fall into the same trap – they make benchmarks for employees to meet, and employees find ways to meet the ‘letter’ of the benchmark, rather than the ‘spirit.’ Billable hour requirements are one obvious example: associates are told that they must meet a particular number of billable hours per year to qualify for a raise or bonus, or perhaps even to stay employed. The lawyer is now focused only on meeting the billable hour requirement. The firm can pontificate endlessly about client service, mentoring, or other activities that they’d like to encourage, but those statements fall on deaf ears. Why? Because the firm is measuring billable hours, not client service, mentoring, etc.

Rance’s article points out the importance of aligning metrics with your firm’ s declared vision. This is an essential point, and one often missed by law firms. If the metrics and measurements are not aligned with the vision and values of the firm, the firm’s stated values cease to exist, and the things that are measured become the defacto ‘values.’ Of course, aligning metrics and vision requires your firm to have a declared vision in the first place. Establishing a powerful vision and lasting values for your firm is an essential component in being successful.

I read a quote recently (I can’t remember the author, unfortunately) that said, in essence, that the only things a leader cannot delegate are establishing a vision and objectives – unless that person wants to give up being the leader. The essence of leadership is establishing the vision and the goal, and inspiring others to follow. As Michelle Golden and I discussed in our posts last week, a firm’s culture is only as good as its communication. And that communication must include clarity about the firm’s real vision and objectives. 

But the most effective communication is often indirect; it isn’t what the firm leaders actually say in a meeting – it’s all of the other communications which have a much larger impact, both on employees and clients. It’s what the firm does on a daily basis. And most importantly, it’s what the firm does when there’s a difficult choice to be made.

The true test of leadership is how well the leader sticks to the established values when sticking to those values means a sacrifice in another area. If the firm values client service, sometimes that means sacrificing some profit to be true to the value – whether by turning away clients the firm can’t handle unless they reduce the level of service, or by going the extra mile for a client in another way.

Ultimately, the rewards are greater when the firm does stick to its values. As Rance says, satisfied customers lead to long term loyalty and value. So make sure that your firm’s metrics and measurements are reflecting the firm’s true values.

Immediately after pressing ‘save’ on my previous post, I came across two interesting posts by Ron Baker on the VeraSage site. His first post, entitled, “Human Capital, Not Cattle”, discusses the ways that professional firms forget that they need ‘knowledge workers’ more than those ‘knowledge workers’ need them, that firms should act as ‘lightning rods’ for talent, and that the true fate of any firm rests on qualities like passion, desire, innovation and creativity – qualities that are not generally part of a firm’s ‘metrics.’

The follow up post, “But Wait, Professionals Aren’t Knowledge Workers” explores the opinion that most firms are really filled with ‘factory workers’ rather than knowledge workers – that it is really the management (leadership) of the firm that determines whether a firm is filled with knowledge workers. He says,

When you consider the metrics used by most firms to measure their team members, they all come from the Industrial Revolution’s command-and-control hierarchies (realization, utilization, billable hours, etc). Yet as I discussed in my posts on The Firm of the Past and The Firm of the Future, the metrics we use to measure a knowledge worker’s effectiveness are woefully inadequate.

Both posts are must-reads. Together, they reveal the current state of most firms: focus on inputs, costs, and effort, filled with factory workers, and the factors that will make a difference for firms of the future: emphasis on value, individuals, innovation, creativity, and autonomy for knowledge workers who are passionate and self-motivated.

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Allison

Allison C. Shields
Legal Ease Consulting, Inc
Creating Productive, Profitable and Enjoyable Law Practices

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