Practice Management

Management Report Do?s and Don?ts

By kenbooker

I was recently asked to speak at a conference on the topic of management reports and how firms are using them to help run their businesses.  It is a topic that I have been fortunate enough to gain a lot of insight into over the years.  Often I am handed a stack of reports and asked to help the firm automate them or to come up with a package of reports to use as their “reporting package”.  Most firms spend a lot of time and resources building their reports to look a certain way but spend little thought into the way that they are used and the actions they expect them to drive.

Any firm can generate data, but to be able to use this data to help model, analyze, and improve their business the firm must approach reporting with a more consistent process.  Currently, I see many firms looking at information that could be best described as “interesting”.  Interesting information is not the same as useful information.  In order to take full advantage of the information available to them a firm must:

• Understand the business drivers of a law firm
• Identify what is controllable
• Establish reasonable goals and relevant metrics

Once the proper mindset has been established and goals have been set, the law firm can move forward with building a set of reports that identifies the best opportunities to reach these targets.  The most important part of developing these reports is to keep them focused on the specific drivers of the goals and not get lost in the “noise” of the data.  A common misconception is that having more data available improves the management process.  In fact, the danger of information overload is just as great (or greater) of a problem as not having enough data or the wrong data.  As Jack Trout says in his book Trout on Strategy, “Knowledge is power only if you can separate the important from the billions of data swirling around you”.

In the end, reports need to be catalysts for action.  Reports by themselves do not make any difference in performance of a firm, rather they should serve to initiate improvement.  By setting up a plan from the outset and then setting up reports to manage towards that plan the firm will become more efficient and consistent in their approach.  Reports do not need to be complex to be useful, but they do need to speak directly to the questions being asked, providing clear direction quickly and succinctly. 

- by Derek Schutz

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Full post as published by More Partner Income on September 01, 2008 (boomark / email).