Measuring performance without time recording?

One of the most common objections I hear as the justification to keep time recording when firm consider value pricing, is that it is impossible to measure employee performance without time records.    The easy response is that time recording only tells me how good the lawyer is at filling in their time records (whether contemporaneously or after the event).  It tells me nothing about the skills and expertise of the lawyer or whether they were working effectively. Of course, time recording and time billed is a very easy KPI measure, but a forward thinking firm looks to a Balanced Scorecard approach of developing the whole lawyer.

In a value pricing environment the objective is effectiveness.  Peter Drucker described six major factors determining knowledge worker productivity:

• “Knowledge worker productivity demands that we ask the question: "what is the task?"
• It demands that we impose responsibility for their productivity on the individual knowledge workers themselves. Knowledge workers have to manage themselves.  They have to have autonomy.
• Continuing innovation has to be part of the work, the task and the responsibility of knowledge workers. Knowledge work requires continuous learning on the part of the knowledge worker, but equally continuous teaching on the part of knowledge worker.
• Productivity of the knowledge worker is not – at least not primarily – a matter of the quantity of output. Quality is at least as important.
• Finally, knowledge worker productivity requires that the knowledge worker is both seen and treated as an "asset" rather than a "cost". It requires that knowledge workers want to work for the organisation in preference to all other opportunities. “[1]

More insightful and productive key performance measures include:

• Client feedback from client surveys and end of matter client feedback.
• Knowledge sharing and development demonstrated by identification of precedent advices and other documents and material which could be utilised as templates, work on developing process workflows, conducting internal knowledge sharing events, attending external seminars and sharing knowledge gained.
• Client development and marketing – referrals; contribution to marketing efforts such as writing articles, client marketing material, blog posts; conducting seminars; involvement in client marketing events.
• Achievement of specific skill developments – examples would be achievement of specialist accreditation or completion of a course to develop particular software skills.
• Effective file management – this is measured by the percentage of times in which there is a blow-out in respect of the expected time frames for completion of phase work. In reviewing this KPI it will be important to take into account whether the blow-out in time is due to matters beyond the control of the lawyer
• Scoping of work – this is measured by tracking the percentage of matters where the scope of work needs to be varied. Frequent variation of scope indicates that the original scope was inadequate and did not reflect either the client expectations or the likely course the matter will take.
• Scope creep - this requires a review of the original scope, which should include agreement as to the quality of service, and consideration about whether the lawyer delivered services either at a high quality beyond that required by the client, or services beyond those agreed with the client. It differs from scope creep into the increase of work is undertaken unilaterally by the lawyer and was never required to be undertaken by the client.
• Percentage of documents requiring revision after settling by partner – this can initially be measured and then targets set to reduce the amount of revision required.
• Completion of the end of matter reviews (after action reviews) – after action reviews are a powerful means of learning from each matter and sharing institutional knowledge.
• End of matter team feedback – at the conclusion of the matter feedback should be provided by team members as to the following:
  • Whether there was effective delegation both from the perspective that matters that should have been delegated were delegated, and that the process of delegation provided clear instructions about the nature of the work required, the context for this work, time frames for the completion of work and expectations as to quality and form of the work.
  • Contributions to team ability to meet expected time frames – this involves a review as to whether delays on the part of any team member(s) resulted in other members of the team being unable to complete their tasks in a timely fashion.
  • Quality of the work – whether individual team members complete work at the level of quality expected or whether it became necessary to revise work or repeat work.
  • Quality of communication amongst the team – whether the level of communication between team members enabled the matter to be run effectively. Communications also include communications and any discussions between a team member, client, other lawyer, counsel, witnesses across the team.

[1] Management Challenges for the 21st Century, Drucker, 1999:142