Hello @Michael D.
Right Click on the Web Service and choose 'New Business Transaction' the select 'Web Services - End Point Value' (Represents the calls of declared Web Service with a specific endpoint value within a PurePath) or Web Services - Method Value (Represents the calls of declared Web Service with a specific method value within a PurePath).
Once you have provided the measure name then on the bottom of the right hand you will find a split button so click on it and now provide the business transaction name.
It will automatically calculate 'Failure Rates' and 'Response Time and Count' for you.
I believe that your suggestion is providing the failure rate of the entire purepath. I tried it and it's showing a 0% failure rate, even though the web services dashlet shows some web service failures. I'm looking for a way to monitor the failure rate shown on the web services dashlet.