Ilene Ferenczy has long pushed all the right buttons to develop her practice in employee benefits. She speaks at conferences across the country, has written five books on the subject and edits the Journal of Pension Benefits. It is a measure of her dedication to client service that she was in the office the week following Christmas, fine-tuning a client’s benefit plan before the start of the new year.
Still, up until a few years ago, she felt that the then-modest success of her Atlanta firm—the Ferenczy Benefits Law Center—didn’t reflect her experience and knowledge of this complex area of the law. “It felt like we were walking around lost in the desert,” she recalls, adding that she wasn’t even sure what financial metrics she should use to define success.
Then she began assembling the disparate financial data she collected into one document, which she calls a “success tracker.”
The success tracker draws data from PracticeMaster, Tabs3, QuickBooks and other sources and creates a real-time snapshot of all the firm’s essential metrics. At any given time—even each day—Ferenczy, the chief financial officer or senior manager can look at the success tracker and answer this question: How are we doing?
One of the first benefits of the success tracker was helping Ferenczy recognize the different sources of her firm’s income. Her firm’s primary source of income is ongoing clients that have the firm on retainer. The second area is more episodic—addressing problems that come up and require extra billing. The third category is representing third-party administrators and other entities that provide service to retirement plans.
As the success tracker delineated how much time the firm invested in each area and the return in income, Ferenczy was able to make adjustments in staffing that made the firm more profitable and provided more efficiency for clients. The success tracker also looks at soft metrics, such as the time invested in speaking engagements and writing articles, and assigns a value to them. Ferenczy spoke at 25 events from coast to coast in 2017, and the success tracker calculated the value of each one. With so many demands on her time, this metric helps her make smart decisions when she’s asked to speak or write.
“We have made a lot of changes solely because we are looking at numbers that make sense and that we can control,” Ferenczy says.
The success tracker also takes traditional accounting processes and adjusts them to accommodate a law firm. If this month’s collections are behind, is it because invoices were sent late, or is it a seasonal downturn? The success tracker has quick answers to such questions.
“It is all about seeing the pressure points: how much we bill, how much we collect and from whom,” Ferenczy says.
With the financial situation under control, Ferenczy says she has more time to do what she does best—serve her clients by being an effective lawyer.
Robin Hensley’s column is based on her work as president of Raising the Bar and coaching lawyers in business development for more than 25 years. She is the author of “Raising the Bar: Legendary Rainmakers Share Their Business Development Secrets.”