Running a law firm isn’t just about winning cases or drafting strong contracts-it’s about making sure the business side of your practice is just as successful as the legal side. That’s where KPIs-key performance indicators-come in.
KPIs help you understand how your firm is doing when it comes to time management, billing, collections, productivity, and growth. Instead of relying on gut feelings or messy spreadsheets, KPIs give you the facts.
Let’s walk through the 12 KPIs that matter most. For each one, we’ll explain what it means, why it matters, and how your firm stacks up against industry benchmarks.
What it is: The percentage of a lawyer’s workday spent on billable tasks. You calculate it by dividing billable hours by total hours available (usually 8 hours/day).
Why it matters: Utilization rate measures how much of your available workday is spent on billable tasks. This metric is essential because it shows whether your attorneys are using their time in ways that directly contribute to firm revenue. A low utilization rate often signals that valuable time is being lost to administrative tasks, inefficient workflows, or inconsistent time tracking.
Improving utilization doesn't always mean working longer hours. It often means eliminating distractions, delegating non-billable work, and creating better systems for tracking and managing time. When your team is spending more of the day on work that can be billed, profitability improves and staff morale often follows. Regularly monitoring this metric allows you to spot trends and make proactive changes before productivity becomes a problem.
Example: According to Clio’s 2024 Legal Trends Report, attorneys at small firms bill an average of 2.9 hours in an 8-hour day.
Benchmark: The Association of Legal Administrators recommends a target utilization rate of 65–75%, yet Clio’s data shows most firms hover around 37%.
What it is: The percentage of billable time that actually makes it onto an invoice. Divide billed hours by total recorded billable hours.
Why it matters: Realization rate shows how much of the billable work your team records actually ends up on client invoices. A low realization rate means that time is being discounted, written off, or not billed at all, even though the work was completed. This can be due to inefficiencies in time entry, client pushback, or internal decisions to adjust hours before billing.
When realization is high, it signals that your team is accurately capturing their time and that your clients understand and accept the value of the work being done. It also means your billing policies are being applied consistently. Regularly reviewing this metric can help you identify patterns in write-downs, improve timekeeping practices, and ensure your team’s effort translates into revenue.
Example: Clio reports that most firms have realization rates between 85–90%, with 88% as the overall median.
Benchmark: Top-performing firms aim for 90% or above.
What it is: The percentage of billed amounts you actually collect from clients. Divide payments received by total invoiced amounts.
Why it matters: Collection rate tells you how much of what you bill actually gets paid. A strong collection rate means your clients are paying their invoices on time and in full, which is essential for healthy cash flow. On the other hand, even if your team is productive and your billing process is strong, a low collection rate means money is being left uncollected.
Tracking this KPI helps you spot payment delays, identify clients who consistently fall behind, and evaluate whether your billing terms are working. It also highlights where follow-ups or payment options may need improvement. By focusing on collections, your firm can improve revenue without increasing workload, ensuring the hard work already done turns into actual income.
Example: Clio’s benchmarks show the median collection rate across firms is 91%, with top-performing firms collecting 95–97%.
Benchmark: Aim for 95% or higher to stay in the top quartile.
What it is: How long, on average, billable work sits unbilled. Think of it as time stuck in "draft invoice" mode.
Why it matters: Realization lockup measures how long your recorded work sits unbilled. The longer it takes to send out invoices after work is completed, the longer it takes to get paid. This delay can choke cash flow, create confusion about what work was done, and even reduce the chances of collecting in full.
Monitoring this KPI helps your firm stay on top of billing and ensures that completed work doesn't get lost or delayed in the process. A shorter realization lockup leads to faster revenue recognition, better forecasting, and fewer client disputes. It also promotes consistency in your billing habits and helps clients feel confident that they’re being billed fairly and promptly.
Example: Clio’s 2024 Legal Trends Report cites a median realization lockup of 47 days. Top-performing firms bill within 25 days or less.
Benchmark: 30 days or less is a good target.
What it is: How long it takes, on average, to get paid after sending an invoice.
Why it matters: Collection lockup shows how many days pass between sending an invoice and receiving payment. If this number is high, it means your firm is waiting too long to get paid, which can restrict your ability to invest in growth, pay staff, or cover operating costs.
Reducing collection lockup improves your cash flow and makes revenue more predictable. It also helps you identify whether payment delays are due to client habits, unclear invoices, or a lack of follow-up. Shorter collection times show that your billing system is working well and your clients are staying engaged. Even small improvements here can have a big impact on your bottom line.
Example: The same Clio report found the median collection lockup to be 27 days. Firms offering online payment options collect significantly faster.
Benchmark: Top-quartile firms collect within 8 days.
What it is: The total number of hours charged to clients.
Why it matters: Billable hours are the core of revenue for most law firms. They represent the actual time you can charge clients for legal work. Tracking this metric helps you understand productivity at the individual and firm level, and shows how much of your team’s time is contributing directly to income.
A steady or increasing number of billable hours usually means your firm is busy with client work, but it’s not just about working more. It’s also about working smarter. Low billable hours might point to issues with time tracking, too much administrative work, or a slowdown in new matters. Regularly reviewing this KPI helps you set realistic targets, manage workloads, and ensure you’re capturing the full value of your time.
Example: According to Smokeball, lawyers bill around 1,693 hours per year on average, but top performers target 1,800–2,200 hours.
Benchmark: Most lawyers bill only 30–40% of total hours worked.
What it is: Time spent on work that can’t be billed like admin, marketing, or training.
Why it matters: Non-billable hours include everything your team does that isn’t directly billed to a client—like admin work, marketing, internal meetings, and professional development. While these tasks are necessary, they don’t generate revenue. If non-billable time takes up too much of the day, it can drag down profitability and distract from client work.
Tracking this KPI helps you understand where time is going and whether there are opportunities to delegate, automate, or streamline. It can also reveal if lawyers are spending too much time on tasks that could be handled by support staff or software. By keeping non-billable hours in check, you free up more time for client service, without adding extra hours to the workday.
Example: Smokeball reports that lawyers often spend 60–70% of their day on non-billable tasks.
Benchmark: Many firms aim to keep non-billable time under 35–40%.
What it is: The percentage of assigned tasks completed during a set time period.
Why it matters: A strong task completion rate shows that your team is staying on top of assignments, meeting deadlines, and keeping cases moving forward. When tasks are consistently delayed or left incomplete, it can lead to missed deadlines, frustrated clients, and stalled matters.
This KPI helps you spot workflow issues early. A dip in completion rates might signal that certain team members are overloaded, or that your processes need tightening. By monitoring task completion, you can better allocate resources, improve collaboration, and ensure accountability across the firm. A high rate keeps operations running smoothly and supports timely client service.
Example: CloudLex suggests that tracking task completion helps spot workflow issues.
Benchmark: While there’s no universal benchmark, many firms aim for 90% or higher.
What it is: The average time it takes to close a matter, from opening to resolution.
Why it matters: This KPI measures how long cases stay open before they’re resolved. The longer a matter remains active, the more it can tie up staff time, delay revenue, and reduce the number of clients your firm can take on.
Tracking average matter duration helps you identify bottlenecks, streamline workflows, and manage client expectations. It also provides insight into how efficiently different case types are handled across the firm. Shorter durations typically mean better resource management and quicker turnaround, which improves both profitability and client satisfaction.
Example: RunSensible reports that residential real estate matters might close in 3 months, while personal injury cases can take 18 months.
Benchmark: No universal standard. Track your firm’s average and aim to shorten it.
What it is: The average dollar value of your invoices.
Why it matters: This KPI reveals how much revenue your firm typically brings in per invoice. It helps you understand the financial value of each matter, spot trends in your billing practices, and evaluate whether your pricing aligns with the complexity and effort involved.
If your average invoice amount is consistently low, it might be a sign that your rates are too low, you're underbilling, or that smaller matters are dominating your workload. On the other hand, steady or growing invoice amounts can signal healthy margins and efficient case handling. Monitoring this KPI helps you refine your billing strategy and assess the financial return on your time and expertise.
Example: According to Thomson Reuters and LeanLaw, mid-sized firms often average $5,000–$6,000 per invoice.
Benchmark: Varies widely. More important to monitor trends within your own firm.
What it is: The number of new client matters opened in a given time.
Why it matters: The number of new matters opened in a given period is a direct reflection of your firm’s growth, marketing effectiveness, and overall demand. It also impacts workload distribution and can help you plan for hiring, onboarding, or process adjustments.
Tracking this KPI helps you stay ahead of busy periods and ensure your team has the capacity to handle incoming work without compromising quality. A consistent or growing number of created matters typically indicates strong client acquisition, while a sudden drop might signal marketing issues, seasonal shifts, or client churn. It’s a key metric for planning ahead and staying competitive.
Example: Thomson Reuters notes that a mid-sized firm may handle 60–70 new matters monthly.
Benchmark: Varies widely. Focus on consistent growth and capacity planning.
What it is: The total amount your firm collects in fees during a given period.
Why it matters: Total revenue gives you the big-picture view of your firm’s financial performance. It reflects how much income you’re actually generating from client work and is essential for budgeting, forecasting, and evaluating firm health.
This metric helps you spot trends over time. Whether your revenue is growing, holding steady, or declining. When paired with other KPIs like utilization and realization rates, it provides a deeper understanding of where your revenue is coming from and where improvements can be made. Monitoring total revenue helps you make smarter decisions about hiring, pricing, marketing, and investments in your firm’s future.
Example: According to ORBA, profits per lawyer grew 8.3% and profits per equity partner rose 11.6% in 2024.
Benchmark: Many small firms operate with 30%+ profit margins.
Final Thoughts
You don’t need to track every possible metric to run a great law firm, but these 12 KPIs give you a clear, balanced view of how things are going.
They show you where time is spent, where money is lost, and where your biggest opportunities lie. More importantly, they help you make decisions based on data, not guesswork.
And if you’re already using Clio to manage your practice, tools like Liam can take care of the tracking for you. No spreadsheets. No manual reports. Just clear, real-time insights whenever you need them.
Because running a law firm is hard enough. The data shouldn’t be.