Is your management information resulting in any real change?

 In Practice Management

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Twenty years ago law firms were very different. Everything was done at a slower pace, clients paid their bills without questioning everything and it was relatively easy to earn a good standard of living. Most firms would get their accountants to produce a set of accounts at the end of the year but there was little need for management information.

Increasing competition and ever rising client expectations have put most law firms under considerable financial pressure and profit margins have been squeezed. Firms have realised that it is necessary to review progress more often than annually and there have been an increasing number of requests for yet more management information. The danger now is that with so much information being distributed perhaps very little of it is actually read. If it is read perhaps it is not understood. If it is read and understood a fee earner still needs to take ownership of that information before there is even the possibility of any change in behaviour. It can be argued that the management information being generated in many firms is very costly and is achieving very little.

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If you want to think again about your management information you should ask yourself what information is required, when should it be produced and to whom should it be distributed?


Traditional management information has been historic and has focused on volumes of work done such as hours recorded and fees generated. To structure this most usefully it is probably best to present the information in the sequence from the recording of time, through the management of WIP, through the billing of the client and the measurement of recovery through to the control of debtors and the final collection of cash. If fee earners are presented with this information on their performance against pre agreed budgets there is some chance of them reacting positively to the information flow.

In addition to this information it might be helpful to produce a new type of management information that focuses more on profit and which is entirely forward looking. Clearly it is possible to have high hours and fees but generate no profit. This information would be matter specific and would be prepared at the start of matters.


Some firms will try to make information available on line while others believe fee earners are more likely to react to the information if it comes in paper form. The minimum frequency for looking at management information is monthly but some information needs to be reviewed more frequently. For example, a fee earner running a large matter might want to review WIP on a daily basis or else WIP could quickly exceed the estimate given to a client. Or, a head of department, who knows that time recorded is below budget might want to review time records on a weekly basis to ensure proper work allocation and time recording is achieved quickly.

To whom?

By definition management information is “ information on things which the recipient can take action”. Fee earners should therefore receive feedback on their personal performance. A team leader should receive feedback on the performance of everyone in their team. If everyone is shown the performance of everyone else they might not even look at their own performance and concentrate more on the failings of everyone else! It is helpful if team leaders can get into the discipline of sitting down with fee earners to discuss the information received and to provide practical suggestions on how performance can be improved.

Let’s hope that firms can start to profit from the information that they produce rather than simply incurring a cost that results in little tangible benefit for the firm.

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