The Importance Of Law Scorecard On Strategy And Execution

The use of scorecards as a way of measuring the performance of a company has been rampant since people learned that for them to effectively manage a company; they must learn how to gauge the outcome of their activities. The saying that goes “without measurements, it is impossible to manage”, therefore, is very much true. However, it is saddening to know that not all companies have embraced such truism. In fact, in the last ten years, there has been a huge percentage of law firms that have not yet implemented such system. So, what really is a law scorecard? Why is it so important to have it? What are the areas of concern for managing a law firm?

It was in 2005 that the first ever balanced scorecard system was put in place. Smock Sterling was involved in the process. The company incorporated a scorecard system, a system which allows law firm managers and shareholders to track the performance of its company, be it financial or non-financial means. This happened just ten years after the rest of the world accepted the scorecard as a standard in performance management. The result was astounding. Customer satisfaction was improved. Expenses were made practical and unnecessary costs were eliminated.


According to Kaplan and Norton, America’s foremost provider and publisher of scorecard systems, the law firm scorecard is a way of linking execution to strategy. Furthermore, they state that it brings more truth to the already accepted belief that “without measuring, it is hard to manage a company”. Scorecards do not necessarily have something to do with financial matters. In fact, the areas concerned in measuring performance all have something to do with operational aspects, rather than financial ones. As a whole, there are four basic dimensions of the scorecard system. These are: financial measures, customer measures, human development measures, and internal business processing measures.

Perhaps the most important dimension to consider, the internal business processing measures deal with yardsticks on improving business operations, which is crucial to the success of a strategy. The aim here is to turn the processes into more effective and more efficient activities.

The human development measures are also called as the growth and learning measures. This is a dimension used in a scorecard system that deals with tracking the performance of the employees, whether regular or not. These measures will allow managers to see how well the employees respond after a company training.

Customer measures are also one very important dimension. These measures have something to do with the law company’s appeal to the public; how the customers perceive the services of the firm. Normally, it will reveal the presence of qualities, such as innovation, intelligence, response, and flexibility.

And, of course, there are the financial measures. As a basic rule, the shareholders of a law firm should have a good grasp on what they need to contribute and gain from the company. It is never wrong to put emphasis on the value of the shareholders. That’s why is important also to provide results that will help shareholders make wise decisions.

From finances to customers, employees to business process, the law scorecard system covers it all. For non-initiative companies, it may entail a change in internal operations. Sometimes, the changes are not that slight. But you get the idea. Scorecards are a great way to support and execute law firm strategies.

By: Sam Miller

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