A new year is the prime time to look back to see what worked and didn’t work and make adjustments going forward. Firm owners can learn a lot from past wins and misses of the year, and it all starts with reflection.
Reflecting on the things that didn’t go as planned and figuring out what went wrong can help you move into the new year with confidence.
As you look back on the past year, consider some of the important lessons learned below.
Why Big Goals Overshadow Progress
Lofty goals are exciting. You’re pursuing new milestones that are hard to hit, and when your team misses them, this doesn’t mean substantial progress wasn’t made in the process.
Simply setting goals helps inspire attorneys to work 14 times more than not setting goals.
You might have missed your big goal, but be sure to celebrate:
- Milestones that pushed your firm closer to its goals last year.
- Failures where the entire team came together, and internal progress was made even if the ultimate goal was not.
Big goals are hard to reach, and while it may take longer to reach them than initially hoped, don’t let them overshadow the progress you did make.
What Went Wrong and Didn’t Go Wrong in the Past Year
A full year is filled with successes and failures. Some things inevitably went well, and others did not. Reflect on this to better understand:
- What went wrong? Can you allocate more resources to prevent a repeat of the future?
- What didn’t go wrong? Repeating past success is possible when you understand what elements led to success.
Your “wrongs” are lessons that will teach you how to strengthen your firm. If you need to offer additional training or to hire new attorneys to reach your goals, at least you know what steps to take to strengthen the firm going forward.
Automating Invoicing and Accepting Multiple Payment Options Improves Profitability
Cash flow is what keeps your firm going, but it’s easy to let invoices sit on the back burner when your plate is full. Delaying invoices or overlooking past-due payments can have a negative impact on your firm’s financial health.
As we head into the new year, sit down and ask yourself: have you truly been consistent and prompt with invoicing clients?
If the answer is “no,” then it may be time to rethink your processes this year. Adopting a solution like Clio can help you automate invoicing and even accept payments to improve profitability.
Clio can empower you to:
- Send bill reminders automatically
- Draft and send invoices
- Accept online payments
If you have historically taken a more laid-back approach to invoicing, make it a goal to change that this year. Streamlining and optimizing invoicing and payments will not only help improve cash flow but your overall profitability as well.
What KPIs Improved, What Didn’t and How Can They Help You Reach Your Goals?
Key performance indicators (KPIs) help your firm measure its progress and find areas of improvement.
The start of a new year is the ideal time to review and analyze your most important KPIs to gauge whether your goals were:
- Too ambitious to reach
- Not big enough
- Ideal for your team’s capabilities
Every firm is unique and will have its own financial goals, but most firms can benefit from reviewing their:
- Average revenue per lawyer
- Firm Revenue growth
- Utilization rate per timekeeper
- Billable vs non-billable hours
- Profit margin
- Collection rate
- Expense-to-revenue ratio
When reviewing your KPIs, ask yourself: did we achieve our goals? If not, what could we have done differently to hit our target?
Often, KPI data can also help you identify areas that could be improved or optimized.
Final Thoughts
Every passing year presents an opportunity to look back and reflect. It’s all too easy to fixate on missed targets and things that “could have been better.” But in the midst of it all, don’t forget to look for the victories – no matter how small. You achieved so much this year, likely more than you realize, and that is cause for celebration.
Once the celebrations are through, set your sights on the future. Now is the time to start setting your financial goals for the coming year, and your reflections can help inform your decisions.