Finding and using the right key performance indicators (KPIs) and metrics for equity partners is a significant challenge for most firms.
Our recent 2020 Equity Partner Contribution & Compensation Survey showed disconnect between commonly used KPIs and metrics, and the strategic issues facing firms.
Production metrics dominate in firms today, with 75% of the five most important metrics used by firms are production related. The next two most common metrics relate to business development and leadership.
The problem is what’s missing, specifically KPIs and metrics that relate to:
Our roundtable asked, ‘how can a firm tackle these issues while 75% of the KPIs and metrics used for equity partner contribution and compensation management are production-related?’
Break out groups identified KPIs for three of these challenges:
The roundtable also considered common problems in the application of KPIs and metrics, and potential solutions.
We presented the following summary table on this point.
In helping our roundtable participants to consider their firm’s approach to these issues, we asked them to self-assess the following statements on a five-point strongly disagree to strongly agree scale. We won’t disclose the responses for confidentiality reasons, but we share these questions with you in case you might like to ask them of yourself or your equity partners.
Our thanks to our roundtable participants for a stimulating conversation.
Please talk to us if you’d like to discuss any part of this article, and read on to see how Performance Leader can help your firm with KPIs and metrics.
Ray D’Cruz is the CEO of Performance Leader. Ray advises clients on partner and employee contribution frameworks, contribution management practices and the design and implementation of technology. He has worked with over 100 PSFs internationally. Ray is a former lawyer and senior HR practitioner. He is co-authoring the second edition of Partner Remuneration in Law Firms (Globe Publishing) with Michael Roch.
Michael Roch is Managing Director of MHPR Advisors and Head of Consulting for Performance Leader. For over 20 years Michael has advised global professional partnerships, international PSF networks and founder-led firms on partner remuneration, profit sharing, funding, governance, succession, business model design and other strategic issues. Having earned his spurs in Big 4 accounting (USA) and Big Law (UK), as an entrepreneur Michael has co-founded and led a global strategy boutique and served as Co-CEO Europe of a 4,000-member consulting platform. Michael is author of Partner Remuneration in Law Firms (Globe Publishing).