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It has been more than 10 years since Robert Kaplan and David Norton published their landmark business treatise, The Balanced Scorecard. The concept of a balanced scorecard is now so entrenched in the field of strategic management that application of balanced scorecards is literally old news to strategists. At Strategy & Leadership, a leading strategic management journal, case studies and other articles related to the balanced scorecard draw yawns from peer reviewers.
Yet, this proven and widely supported concept is rare to non-existent within law firm management circles. In summer 2005 (and for the first time), Smock*Sterling was formally asked to propose the inclusion of a balanced scorecard as part of a law firm strategic planning process, nearly a decade after the tool became widely accepted in corporate America. The success of that planning process, particularly the results that client has achieved since adopting the strategic plan emerging from that process, has convinced us that consideration of balanced scorecards in the context of law firm strategy is long overdue and a potentially powerful tool in law firm management.
This article provides a brief overview of the balanced scorecard concept for the uninitiated, a discussion of how the tool can be successfully applied in a law firm environment, a prediction regarding the objections that law firm management are likely to encounter in applying the concept, and our recommendations for firms exploring the use of a balanced scorecard.
Balanced Scorecard 101
Kaplan and Norton developed the balanced scorecard as "a link between strategy and execution." The authors took their lead from the longstanding management truism, "not measured, not managed." They focused on augmenting financial metrics with other measures closely linked with strategy execution.
Specifically, they developed a framework to translate strategy into operational terms. And, they embodied that framework in terms that enable management to measure success in each area, consistent with the overall strategy.
The four fundamental dimensions of …