Stoel Rives is a leading US law firm serving an international client base across a diverse range of industry sectors and practice groups. With approximately 350 attorneys and an annual turnover in the region of $250 million, the firm prides itself on its client service philosophy. This philosophy includes five core concepts that together align to balance client expectations regarding cost and outcome with maximising operational performance.
To help deliver on this ethos in practice - and support a culture of efficiency and high performance - Stoel Rives was keen to provide its fee earners / time keepers with a visual and flexible financial reporting platform to provide key financial metrics relevant to each role, that would drive business decision making.
As Cecy Graf, Chief Financial Officer, Stoel Rives, comments: “Providing client value is the external driver we are always striving towards, but without the internal KPIs to measure ourselves and ensure that we’re making the most effective use of our time and resources, it’s very difficult to quantify success – and hence a challenge to relay that to our clients.”
Making Informed Decisions
The firm chose BigHand Business Intelligence (previously BigHand Quantum) to help it achieve this real-time insight. An advanced financial BI solution, BigHand Business Intelligence provides law firms with role-based reporting that delivers the right financial data to the right person in intuitive dashboards, replacing manual reporting with real-time data visibility from firm level to individual clients and matters.
Approximately three years ago, Stoel Rives rolled out its Matter Management Dashboard in BigHand BI firm wide. Anyone with participation credit in a matter or client has access to the dashboard, and time keepers are encouraged to adopt a best practice approach to consult it every time they undertake a performance review.
Graf explains: “This isn’t about doing things differently; it’s about making informed decisions on how we’re pricing and staffing our matters. It’s also about continuous learning. If there’s something that has been successful, can we replicate that? If something has been less than successful, what can we learn from it and adapt to create success in the future?”
The Matter Margin Dashboard contains four key metrics:
• Net margin;
• Potential margin;
• Leverage; and
• Expected rate or effective billing rate
Based on the potential margin of a matter, partners can dynamically allocate work to paralegals and associates and see how the leverage on the hourly workflow and the billing rate might affect the profitability of a matter.
Ultimately, it’s about meeting the client’s needs and delivering value to the client, but also how we can use our own internal efforts to make sure we as a firm are getting value out of the same work
The combination of BigHand BI and change management Stoel Rives had undertaken since 2017, stood the firm in good stead when the COVID-19 pandemic hit in 2020.
“Using the Matter Management Dashboard, we were able to make sure that – even in a remote working environment – we had full visibility of the key financial metrics across all our matters, both to help maximise client value but also to help ensure staff could see how they were contributing to the overall performance of the business,” Graf comments.
Alongside the Matter Management tool, Stoel Rives also maintains a financial dashboard which monitors utilisation, inventory levels, collections, realisation, billings, etc. During the crisis, the firm’s executive committee held weekly meetings, where the metrics from the financial dashboard were reviewed.
“We spent a lot of time monitoring our financial performance, particularly aged inventory,” Graf explains. “We were able to stay in regular contact with our clients and if there was a delay in payment we could make sure we were supporting them effectively.”
I genuinely believe that BigHand added significantly to our success last year. We were able to demonstrate a better leverage model than the industry average. We exceeded our revenue target and profitability was strong
With the insight from BigHand BI, the finance team at Stoel Rives has moved from fulfilling a primarily reporting / reactive role, to one which is proactive. “Without BigHand we wouldn’t have as much effective engagement in the pricing function as we do, because time keepers can really see the overall impact of their decisions. We now have very strong engagement in our pricing and legal project management and that really positions us to be more of an advisor on the front end,” Graf says.
Stoel Rives is also looking to expand upon its engagement with BigHand, with the roll out of BigHand Matter Pricing (previously Pricing and Profitability / Evaluate), a PMS-integrated matter budgeting, pricing and tracking tool. BigHand Matter Pricing supports firms to achieve better financial outcomes through data-driven budgets and costs, better resource plans, lower write-offs and clear client reporting.
“Our intent is to have a pricing tool that supports the matter margin framework, so that from start to finish we have consistent metrics and messaging on the things that drive margin,” Graf explains.
She concludes: “The more that we can do to help clients when they themselves are under huge cost pressure, is really important. We have been able to provide more for less, while still being a successful firm - and being able to attract talent to provide that service. And you can’t attract talent without being profitable. It’s a balance between client value and profitability and BigHand has the tools that allow the firm to achieve that.”