Developing a Partner Scorecard That Is Meaningful to Your Firm

This article is the first in a series about developing a customized scorecard for your firm's partners, specific information to include in the scorecard, tailoring it to your firm's goals, and getting partners to understand the scorecard and achieve greater success. Following are some questions about partner behavior and profitability with which many law firms grapple: How do you want your partners to behave? Is their work ethic up to your standards? How do you modify behavior? What firm goals that will drive profitability? What are the key financial metrics against which goals are compared? What training do partners need to understand the financials goals and metrics? What data does your firm track by partner? How are partners held accountable for profitability performance? Developing a partner scorecard customized to your firm's style may help address these issues and improve overall performance.

What Is a Partner Scorecard?

A partner scorecard is exactly what it sounds like. It is a card that keeps score on various elements of performance for a partner. The types of scores that would be kept will be discussed at a later point. An important element of a scorecard system is to make the scorecard a concise, tangible card, bigger than an index card or a piece of paper. The reason for this is simplicity. The score can be viewed and understood in a flash. Picture a golf game scorecard. It is on one page, simple, and easy to understand. You know your score. And you remember it.

Why Is Keeping a Scorecard Important?

Keeping a scorecard is important for various reasons. It is a means of measuring performance. The 'score' is used to determine if a partner's performance in the areas being measured are great (top among benchmarks and/or firm), average (average, is, well, average, nothing exciting), poor (in need of significant improvement) or somewhere in between. In golf lingo: Is a partner scoring above par, at par or below par? Keeping score is also a means of measuring improvement. In a golf game, one goal is for a player is to improve his or her score from the previous game. In a law firm, one goal is to achieve improvement on a metric from the previous time that metric was measured. Keeping a scorecard can also foster healthy competition among partners to achieve greater success and overall firm profitability. A law firm is a single entity, but it is also the sum of the individual performance of all the partners. At a previous time, a partner was a young, eager associate with an aspiring goal of becoming a partner. Once that goal has been achieved, why not set a goal of becoming a top-performing partner? In golf, a primary goal is to earn a better score than the other players for the particular game being played. When golfers compete against better golfers, it raises the bar and improves their game as well. The same is true in business. In a law firm, the strategy can be translated into becoming a top-performing partner, thereby raising the bar of performance for everyone else. This is a win-win situation for the firm.

How Can Your Firm Expand Individual Partner Metrics?

How can you expand the individual metrics for which individual partners should be held accountable? Take a firm-wide metric and break it down by partner and then set individual goals for that metric for each partner. For example, if a realization is a firm-wide goal but has not been tracked continuously on an individual partner basis, how does your firm start making individual partners accountable for their individual realization so that the overall firm realization goal can be met? Trend it and send it. Track the individual trend and then publish the information to all partners by sending it out via a partner scorecard. The reason for this is not to embarrass, but to set expectations at the individual level. And there is no better way to hold someone accountable for a goal then to tell someone else about it. A partner's instinct will be not to let the other partners down, especially if someone else is also following up.

Conclusion

Many firms track individual partner metrics such as billable hours, billings and collections. But many firms stop there on an individual basis and only track and disseminate other metrics on a firm-wide basis. Some firms shy away from creating competition among partners for fear of creating dissension. With education, training, communication and coaching, your firm can become a great firm in which the individual partners have the firm's best interest is mind by becoming responsible and accountable to themselves and their other partners by setting goals for achieving desired results and continuous improvement. A scorecard can help achieve these desired results. The next installment of this column will review how to tailor a score card to your individual firm's goals.

K. Jennie Kinnevy is the director of the Law Firm Services Group at Feeley & Driscoll, P.C. (www.fdcpa.com). The Law Firm Service Group provides tax, accounting, business advisory and consulting services to law firms. Based in Boston, Jennie can be reached at [email protected] or by phone at 617-456-2407.

This article is the first in a series about developing a customized scorecard for your firm's partners, specific information to include in the scorecard, tailoring it to your firm's goals, and getting partners to understand the scorecard and achieve greater success. Following are some questions about partner behavior and profitability with which many law firms grapple: How do you want your partners to behave? Is their work ethic up to your standards? How do you modify behavior? What firm goals that will drive profitability? What are the key financial metrics against which goals are compared? What training do partners need to understand the financials goals and metrics? What data does your firm track by partner? How are partners held accountable for profitability performance? Developing a partner scorecard customized to your firm's style may help address these issues and improve overall performance.

What Is a Partner Scorecard?

A partner scorecard is exactly what it sounds like. It is a card that keeps score on various elements of performance for a partner. The types of scores that would be kept will be discussed at a later point. An important element of a scorecard system is to make the scorecard a concise, tangible card, bigger than an index card or a piece of paper. The reason for this is simplicity. The score can be viewed and understood in a flash. Picture a golf game scorecard. It is on one page, simple, and easy to understand. You know your score. And you remember it.

Why Is Keeping a Scorecard Important?

Keeping a scorecard is important for various reasons. It is a means of measuring performance. The 'score' is used to determine if a partner's performance in the areas being measured are great (top among benchmarks and/or firm), average (average, is, well, average, nothing exciting), poor (in need of significant improvement) or somewhere in between. In golf lingo: Is a partner scoring above par, at par or below par? Keeping score is also a means of measuring improvement. In a golf game, one goal is for a player is to improve his or her score from the previous game. In a law firm, one goal is to achieve improvement on a metric from the previous time that metric was measured. Keeping a scorecard can also foster healthy competition among partners to achieve greater success and overall firm profitability. A law firm is a single entity, but it is also the sum of the individual performance of all the partners. At a previous time, a partner was a young, eager associate with an aspiring goal of becoming a partner. Once that goal has been achieved, why not set a goal of becoming a top-performing partner? In golf, a primary goal is to earn a better score than the other players for the particular game being played. When golfers compete against better golfers, it raises the bar and improves their game as well. The same is true in business. In a law firm, the strategy can be translated into becoming a top-performing partner, thereby raising the bar of performance for everyone else. This is a win-win situation for the firm.

How Can Your Firm Expand Individual Partner Metrics?

How can you expand the individual metrics for which individual partners should be held accountable? Take a firm-wide metric and break it down by partner and then set individual goals for that metric for each partner. For example, if a realization is a firm-wide goal but has not been tracked continuously on an individual partner basis, how does your firm start making individual partners accountable for their individual realization so that the overall firm realization goal can be met? Trend it and send it. Track the individual trend and then publish the information to all partners by sending it out via a partner scorecard. The reason for this is not to embarrass, but to set expectations at the individual level. And there is no better way to hold someone accountable for a goal then to tell someone else about it. A partner's instinct will be not to let the other partners down, especially if someone else is also following up.

Conclusion

Many firms track individual partner metrics such as billable hours, billings and collections. But many firms stop there on an individual basis and only track and disseminate other metrics on a firm-wide basis. Some firms shy away from creating competition among partners for fear of creating dissension. With education, training, communication and coaching, your firm can become a great firm in which the individual partners have the firm's best interest is mind by becoming responsible and accountable to themselves and their other partners by setting goals for achieving desired results and continuous improvement. A scorecard can help achieve these desired results. The next installment of this column will review how to tailor a score card to your individual firm's goals.

K. Jennie Kinnevy is the director of the Law Firm Services Group at Feeley & Driscoll, P.C. (www.fdcpa.com). The Law Firm Service Group provides tax, accounting, business advisory and consulting services to law firms. Based in Boston, Jennie can be reached at [email protected] or by phone at 617-456-2407.