Benchmarking for the Legal Sector: Turning Data into a Competitive Edge

In professional services, and particularly in the legal sector, expertise in your field is essential, but it’s not the only measure of success. Running a profitable and sustainable legal practice means balancing the practise of law with the business of law. This is where benchmarking can provide a decisive advantage. 

Benchmarking is more than simply comparing last year’s performance to this year’s. It’s the practice of measuring your firm’s financial and non-financial performance against a relevant peer group, ideally, businesses of a similar size, in the same market, and competing for the same pool of clients and talent. 

By doing so, you can see not only how you’re performing, but where you’re outperforming or underperforming, and critically - why.

Why many legal firms overlook benchmarking 

In law firms, the focus is naturally on developing legal skills, not on financial and operational management. Most partners have learnt how to run a practice through experience, rather than structured business training. Without an external point of reference, this can lead to blind spots. 
Benchmarking “brings the outside in”, offering a clear, data-driven comparison to your peers and surfacing improvement opportunities that internal reporting alone can’t reveal.

Insights that change the game 

The impact of benchmarking can be significant. In one engagement, I worked with a legal practice generating around $15 million in revenue. On paper, they were performing well. However, when we benchmarked them against comparable firms, we found their productivity was well below the market and that partners at similar-sized firms were earning almost double.

This had serious implications for attracting and retaining top talent. Partner remuneration is one of the key levers for securing skilled practitioners. If you can’t match market rates, you risk losing your competitive edge. 

From hidden risks to actionable strategies 

Internal reporting tells you how you’ve done compared to your own history. Benchmarking shows you how you’re performing relative to your competition. 

In the legal sector, some of the most valuable metrics to benchmark include: 

• Productivity: average chargeable hours per fee earner
• Realisation rates: billable versus billed
• Cost of production: wages as a percentage of revenue
• Engagement metrics: average matter size and completion time

Understanding these indicators helps firms refine pricing strategies, align staffing levels, and identify inefficiencies.

Why RSM’s approach is different 

While you can find industry averages online, they often lack context and quality assurance. RSM uses legal sector benchmarking data that is segmented by firm size, turnover, and location, for example, comparing a $15 million Sydney firm with others in the $13–18 million range in Sydney. This makes the insights relevant, accurate, and actionable.

Beyond the numbers – driving better decisions 

Benchmarking supports strategic decisions at every stage of a firm’s lifecycle.

• Restructuring: Identifying underperforming areas and setting realistic improvement targets.
• Mergers: Setting KPIs to measure post-merger performance.
• Growth planning: Forecasting resourcing needs and setting profitability goals.

Even small adjustments can have significant impacts. Lifting average daily chargeable hours from four to five and a half, in line with competitors, can deliver substantial revenue gains without increasing headcount.

Getting started 

For legal firms considering benchmarking for the first time, my advice is to approach it with an open mind. The results may surprise you and not always in ways that are comfortable. But that’s the value: benchmarking gives you the information you didn’t know you needed, enabling you to make informed decisions that improve profitability, productivity, and competitiveness.

Is it time to measure what really matters? 

If you want to understand how your legal practice stacks up and where the opportunities for improvement lie, RSM can help you benchmark your performance and turn those insights into a practical plan for success