I’m a huge Red Sox fan. (That noise you just heard were all the Yankees fans skipping ahead to the comment section. Don’t wait, guys. I’ll be right there.) This season began with the highest expectations, after the Sox won the offseason by acquiring superstars Adrian Gonzalez and Carl Crawford and by rebuilding their bullpen. Experts and fans alike were predicting a 100-win season (their first since 1946) and a nonstop flight to the World Series. Instead, the team got off to a horrific start, going 0–6 and 2–10. Since then, they’ve begun to turn it around, finally reaching .500 on May 15. Now they’re just half a game out of first place in the tight AL East.
Part of the reason for this turnaround has been excellent pitching. Jon Lester, the young lefthanded cancer survivor, sits atop the American League leaderboard with a 6–1 record; no AL pitcher has more wins. Josh Beckett, the veteran star rebounding off a couple down years, is 3–1.
Now just looking at wins, you’d think that Lester is outperforming Beckett. But you’d be wrong, because win totals tell you very little about how a pitcher is performing. Just as looking at hours-billed totals tell you very little about how a small-firm lawyer is performing.
Better ways to measure performance (for pitchers and lawyers), after the jump.…
In fact, Beckett is pitching much better than Lester. Beckett’s earned-run average leads the American League at an obscene 1.73, while Lester’s is an OK 3.68 (the league average is 3.86). (All stats from the excellent Baseball-Reference.com as of this morning.) More telling are the two pitcher’s run-support numbers, which measure how many runs a pitcher’s teammates score while he’s in the game (in other words, a stat the pitcher has zero control over). The Sox have scored an average of 6.2 runs for every nine innings Lester has pitched, good for ninth in the AL. On the other hand, the team’s bats go to sleep with Beckett on the mound, scoring only 2.5 runs per nine innings, seventh-lowest in the league. That discrepancy alone explains the difference between the two pitchers’ win totals.
There are plenty of other statistics that do a better job of measuring just how well a pitcher is throwing. One of the best is walks and hits per inning pitched (WHIP), which basically measures whether a pitcher fails or succeeds against each batter (in other words, whether the batter gets on base). A WHIP of 1 is excellent; the AL average is 1.31. Lester’s WHIP is a mediocre 1.35, meaning he’s allowed too many baserunners. Beckett’s is a phenomenal 0.924. Beckett’s only given up three home runs this season, while Lester has allowed the third most with nine.
In other words, just looking at win totals means you won’t appreciate the terrific season Beckett is having, while overestimating how well Lester is doing.
Lawyers face the same problem, especially in small firms. The lawyerly equivalent of win totals is the total number of hours billed. It is a blunt instrument of a statistic, doing nothing more than counting something that the lawyer often has little control over. As with run support, a lawyer’s ability to bill hours is often dependent on the efforts of other teammates (the rainmaking partners).
More importantly, just as with wins, hours billed includes no measurement of work quality. Sure, there will often be some correlation. A lawyer who does good work will get more work assigned to her. (It’s a pie-eating contest, where the winner gets more pie.) But correlation is not causation, and the gross number of hours billed reflects nothing about the quality of the work from the client’s point of view.
It’s worse in small firms. I remember that as a junior associate, I was a little embarrassed when discussing hours with my classmates who had gone into Biglaw. Many of them would be bragging about having billed 2,200 or 2,300 hours (they’d be pretending to complain, but it was like they were showing scars from the war or something). Eventually, someone would ask me, and I’d have to mumble “1,300 hours.” Then they’d roll their eyes and say something about the easy life of a small-firm lawyer.
But it was apples and oranges. In a small firm, hours are very different. For example, in 17 years of practicing in small firms, I have never had the use of a legal secretary or paralegal. So think of all the things that your legal secretaries and paralegals have done for you in your large-firm practice, and then imagine doing them yourself. And often not billing those hours.
Plus as a junior-level small-firm lawyer, I spent more time dealing directly with clients than my Biglaw peers who were busy doing document review and legal research. Many of those client hours had to be written off as business development or client-relationship time. They were valuable hours, but they did not go toward my win totals.
Look, this is not my usual rant against billing by the hour. Lawyers by their nature like to be precise and like to keep score. We try to measure things so that we can manage them. The problem is that we end up measuring the wrong things.
So what can small firms do to measure lawyers’ performance instead of just toting up hours? Value-pricing guru Ron Baker has an entire book devoted to key predictive indicators, or KPIs: Measure What Matters to Customers: Using Key Predictive Indicators (affiliate link). In it, Ron talks about the sort of KPIs that law firms could use, such as turnaround time (which is basically the opposite of billable hours, if you think about it), innovation sales (selling new services), customer loyalty (retention rates), share of customer wallet, and others. You could learn a lot from Baker about how to run your law firm better.
With a little thought, you could easily come up with metrics to measure the quality of lawyers’ contributions rather than just their lawyerly win totals.
Now, please excuse me. I have to go to the comment section and have Yankees fans throw batteries at me.
Jay runs Prefix, LLC, a firm that helps lawyers learn how to value and price legal services. Jay Shepherd also spent 13 years running the Boston management-side employment-law boutique Shepherd Law Group. He writes the ABA Blawg 100 honoree The Client Revolution, which focuses on reinventing the business of law, and Gruntled Employees, a workplace blog. Follow Jay on Twitter at @jayshep, or email him at email@example.com.