Business Management — Benchmarking in Legal Service Firms
Benchmarking is a modern business practice used to improve the profitability and efficiency of professional business organizations. More generally, benchmarking concepts can also be applied to any entity or venture for the purpose of identifying, understanding, and implementing best practices. In principle, it is a method of collecting information whereby organizations learn how other organizations within the same industry are maximizing efficiency and profitability (and any other relevant measures of organizational success). The express purpose of benchmarking is to improve specific aspects of business practices by studying the approaches, policies, and practices that other organizations within the same industry have used to achieve success.
Benchmarking in the Legal Profession
Within the legal profession, there are many possible measures of organizational success; they include client retention, client referrals, case outcomes, billable hours, staff attorney retention and promotions, personnel recruitment, and public reputation. Client retention is a measure that is comparable to repeat customers in sales organizations; a high level of client retention corresponds to client satisfaction with the services provided by the firm. Likewise, client referrals are a measure of the frequency with which existing clients refer other potential clients to the firm; high levels of referrals correspond to the satisfaction of existing clients (Russell-Whalling, 2008).
Case outcomes are a direct measure of the ability of the firm to achieve the specific objectives sought by clients in retaining their services. Naturally, positive outcomes correspond to client satisfaction. In this regard, another important benchmark would be the firm’s success in retaining clients whose objectives were incapable of being met by the firm (Russell-Whalling, 2008). This element is especially important to legal service firms precisely because their ability to provide positive results depends on so many factors outside of their control.
This is also one of the most significant weaknesses of benchmarking in legal services: so many factors directly responsible for the success or failure of case outcomes is beyond the ability of the firm to overcome through a positive result. On the other hand, it also gives rise to one of the most significant measures of organizational success. Since clients whose cases can be resolved in their favor or to their satisfaction are naturally inclined to continue their association with the firm, a substantial part of law firm success is a measure of the organization’s ability to retain clients whose desired objectives the firm was incapable of achieving.
Application to U.S. Air Force Foreign Legal Services Offices
Whereas legal services performed on behalf of by the U.S. Air Force are virtually identical to those services rendered to clients by , there are significant differences; some of those differences relate directly to the manner in which benchmarking can be used. Specifically, it is very difficult to measure client satisfaction in terms of retention because active service members receive their legal services without cost; any alternative would necessarily be at . to other standard measures of benchmarking such as staff retention and promotions. Nevertheless, in principle, benchmarking can be a valuable mechanism for armed forces legal services provided the specific surveys and other information collection tools are appropriately designed to provide the same type of information that ordinarily correspond to best practices in the legal profession.
Reference
Russell-Whalling E. (2008). 50 Management Ideas You Really Need to Know. London:
Quercus
