A recent “Facts and Figures” in Inside Counsel is a great example of meaningless metrics.
(As far as I can tell with a couple of minutes of investigation, the chart is included only in the print version, June issue; I can’t spot it on line.)
They title it “an inside look at the numbers that count.” Unfortunately, while these numbers may count, it’s not at all clear what they add up to.
|5.1%||Increase in average hourly rate from 2010 to 2011|
|13%||Increase in average hourly rate for law firms with 501 to 1000 lawyers from 2009 to 2011|
|4%||Increase in average hourly rate for law firms with 1 to 50 lawyers from 2009 to 2011|
|3x||How much faster rates for highest billing partners grew v. rates for lowest billing partners|
The text above their table claims that “law firm rates are steadily climbing.” Based on the data in the table, is that true?
The data comes from TyMetrix’s Real Rate Report, which does have some supporting data, but here’s the problem with many metrics — no one reads or even acknowledges the existence of this off-the-page stuff. So let’s take this chart at face value, as an exercise.
Which of these two explanations makes sense?
- BigLaw keeps increasing rates willy-nilly.
- Clients are pushing the high-value/high-leverage work to top attorneys while moving routine work to smaller, less expensive firms.
Both make sense in light of the data.
And that’s the problem. The metrics by themselves offer no clue as to what they really mean. I could present them as proof of either of the opposite statements above.
Improperly used metrics are bad business.
Legal Project Management and Metrics
So why is the LPM guy on this metrics kick?
Because I’ve seen a number of articles on Legal Project Management (and engineering project management as well) that go on and on and on about metrics… yet it’s clear that the authors don’t truly understand metrics.1 They show no evidence of having run a business or a practice that depended on metrics; they’re seeing numbers and doing the Pavlov’s-dog thing. I worry that legal professionals just starting out in Legal Project Management will get confused and wander off down the wrong track.2
And so I need to keep pointing out the logical fallacies when I see items like this, especially in a respected publication that usually does good work.
Go check out the TyMetrix survey if you want more background on these numbers, but don’t take them at face value… unless you understand that their face value is very limited.
Some people get passionate obsessive about metrics. I get that way, I suppose, about their misuse.