Periodically, I evaluate Magnus’ “numbers” on case types, history, venues, and clients. By this, I mean I classify the cases on which we’ve worked since the last time I “ran the numbers.” I, long ago, created spreadsheets for this purpose and I simply tally the new cases by client, category, venue, etc. It is relatively easy to do and it is instructive to Melissa and me in knowing where our action is. One thing about numbers, in this case, percentages, is how slowly they change. For example, when I first did this, perhaps 25 years ago, we did over 70% of our work, by number of cases, for plaintiff’s attorneys in personal injury (PI) cases. We did a lot of them – it was high volume. Then the defense side of the bar caught on and we started catching up, but, like a G.P.A., once a base number is established, it is difficult to see big changes in percentages. So, even though we’ve added many defense PI cases, our 30 year historic total is still showing 65% plaintiff. However, when slicing and dicing available data, it is interesting to calculate the metrics in different ways. For example, when comparing the percentages, if I look at it by revenue, the percentages flip to 30/70, plaintiff/defendant, across all cases (not just PI). As I was doing these calculations this year, I realized all small businesses should have metrics like this upon which to reflect. And, as noted, slicing and dicing should be done to ensure the metrics are meaningful. These analyses are helpful for goal setting, for example, to whom to market, as well as creating success measures. Whether it is how many widgets your company creates or how many service calls you made, tracking the numbers is instructive. One caveat though, many years ago we shared these numbers with our team members. While some of them found them helpful, a few found themselves upset due to not knowing how to interpret or use the numbers. Thus, we never again shared them in the way we did that first time. But, owners and managers need to track these numbers to focus along the way. It may seem onerous to go back over many years, but it is time well spent if it has never been done before.
The number crunching that is part of David’s job is vastly different from the number crunching that is part of my job. David’s analyses of our business sources and their associated revenue provide a good foundation for our marketing efforts as we forge ahead into another year. It is interesting to see how our business has evolved in almost 30 years. We built Magnus by working on lots of small (in terms of our fees) personal injury cases for plaintiff’s lawyers. Then, things changed. One of the most significant changes was legislation passed in Florida that capped (limited) the amount of money plaintiffs could receive in our most frequent type of personal injury case, medical malpractice. In the old days, Magnus worked on numerous medical malpractice cases, due to the fact that they are both serious and high damages. However, when the caps went into effect, our medical malpractice work became nonexistent, leading to an overall decline in the number of plaintiff’s personal injury cases on which we consulted. It was at that time that we made a business decision to increase our marketing efforts to members of the defense bar. We also tried to move toward working on commercial cases instead of personal injury, due to the fact that commercial cases usually have higher damages than personal injury cases. (Commercial cases include construction, intellectual property, securities, etc.) I also realized that, for the most part, I enjoy working on the commercial cases more than the personal injury cases because they are not as sad and they are more factually complex and thus, intellectually challenging. Although we still love our plaintiff’s lawyer clients and we are happy to assist them however we can, the numbers show our success in changing our overall business model through the years.