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How to Track KPIs for Lawyers | Legal Accounting

advisory services kpis metrics May 08, 2023

As a bookkeeper, it's essential to understand the significance of key performance indicators (KPIs) in measuring the success of a law firm. Identifying, measuring, benchmarking, and acting upon these metrics help determine the firm's profit contributions. KPIs also provide insight into which marketing expenses or client development activities lead to the most valuable clients and if staff is being leveraged appropriately. This guide explains how to pinpoint, measure, and leverage KPIs beyond traditional billable hours from a law firm's perspective.

Measuring KPIs

To measure your KPIs effectively, take the time to review and consolidate existing data available in QuickBooks and the practice management system or billing system. Ensuring all of these sources are properly integrated will allow for easy retrieval and collection.

Calculate the metrics

With the legal industry often measuring success with only billable hours and utilization metrics, it is no surprise that many law firms are not asking clients for feedback or calculating how much they spend to acquire each new client. But in today's rapidly changing markets, the ability to track so many metrics with technology and the upcoming adaption of artificial intelligence requires more in-depth insight into their efficiency of service delivery and quality of work if businesses want long-term sustainability. By collecting meaningful customer data through surveys and other means, companies can better understand (and ultimately control) their monetary situation - an essential element for any business' profitability. This is something that we, as bookkeepers, should suggest to our clients as a way of improving law firm profitability.

Billable Hours

The first step in calculating attorney productivity is determining the billable hours. Billable hours are the hours an attorney works on a client's case and can be billed to the client. Non-billable hours include administrative tasks, continuing education, and vacation time. Most of our attorneys use billing software like LeanLaw or Clio, which provides us with the total billable hours.

Calculate Utilization Rate

The utilization rate is the percentage of time an attorney spends on billable hours compared to the total hours worked. To calculate the utilization rate, divide the billable hours by the total hours worked. For example, if an attorney worked 160 hours monthly and had 120 billable hours, their utilization rate would be 75%.

Utilization rate = Billable hours / Total hours worked x 100%

Determine Realization Rate

The realization rate is the percentage of billable hours the firm can collect from clients. To calculate the realization rate, divide the number of billable hours collected by the total amount of billable hours. For example, if an attorney worked 100 billable hours in a month and could collect payment for 80 of those hours, their realization rate would be 80%.

                                 Realization rate = Collected billable hours / Total billable hours x 100%

Calculate Productivity Rate

The productivity rate is the percentage of billable hours that are collected and is a measure of how efficiently the attorney is generating revenue for the firm. To calculate the productivity rate, multiply the utilization rate by the realization rate. 

                                   Productivity rate = Utilization rate x Realization rate

For example, if an attorney had a utilization rate of 75% and a realization rate of 80%, their productivity rate would be 60%.

Productivity rate = 75% x 80% = 60%

This productivity metric is essential to track in a mid-market law firm or one with multiple attorneys. Partners can use this information to decide bonuses and raise for highly productive attorneys.


By measuring and tracking lawyer KPIs, attorneys can achieve better client service, higher quality cases, and greater efficiency in the long run and beyond. With this knowledge and these strategies in hand, you are now ready to embrace and implement a successful lawyer KPI strategy for your business. We invite you to join our Accountants Law Lab or take our course Fast Track Legal Accounting so that you can effectively measure and track lawyer KPIs with confidence.

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