A Roadmap for LPM and Pricing Success with Budgeting, Monitoring, and Process Improvement
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This document outlines a 5-step roadmap for law firms to improve legal project management (LPM) and pricing. Step 1 involves budgeting and monitoring matters at the individual level to understand costs. Step 2 requires defining matter types and phases to allow for more granular budgets and leverage past data. Step 3 is to monitor matters and identify inefficiencies. Step 4 identifies common tasks across matter types to build standardized budgets. Step 5 manages matters with checklists to deliver consistently to plan. The goal is to transform firms into client-focused businesses through LPM.
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A Roadmap for LPM and Pricing Success with Budgeting, Monitoring, and Process Improvement
- 1. A Roadmap for LPM and Pricing Success Where is your firm or practice area?
- 2. The LPM Maturity Model Five steps to transform your firm into a client-focused business
- 3. Maturity will be different based on practice Drivers of change: • Price, client, competition • Pressure maturity drives maturity `
- 4. Step 1: Budget and Monitor at the Matter Level
- 5. Understand effort to cost • Building a budget creates familiarity • Addresses the problem that billing takes place a long time after work • Budgeting avoids duplicative tasks
- 6. Step 1 – Building your budget Opportunity or matter Top down – start with an amount Monitor only – select a total dollar amount per phase Bottom up – start with task or hours
- 7. Start with top-down: amount budgets • Lawyers typically quote in dollars • Challenge is do not know many hours they get for the amount • Need this data to know that they can deliver the work • Building a template with resources makes this easy to determine
- 8. Why is Step 1 budgeting important? It raises awareness in your organization • Builds familiarity with cost & effort • Commonality of processes • Use of personnel • Measure it, manage it
- 9. Progress reports and KPIs • At least weekly progress reports to measure against budget • Minimum set of KPIs at matter level: • Leverage (e.g. non-partner hours vs. partner hours) • Realization ( achieved or target revenue ÷ hours at current rate) • Matter profitability (e.g. cost per hour ÷ revenue per hour)
- 10. Step 2: Matter type and phase development
- 11. Going deeper for monitoring and pricing • First level of breaking down matter types and phases • The most important step in LPM journey
- 12. Goals of Step 2 • More granular budgets and monitoring • Leverage past experience for pricing future matters • Two critical tasks: • Define the services the firm delivers • Define the discrete phases within each matter type • Matters can contain multiple services
- 13. Understand key metadata Matter Types • Uber type of work • Litigation, Transaction, Advisory, Regulatory Area of law • Subject area • Employment, Finance, bankruptcy Matter Sub-type • Specific work being performed • Employment discrimination, M&A, Chapter 11
- 14. Breaking down to phases is critical • ABA/UTMBS Codes are not rich enough • Need break down the work so that you derive meaning • Enables comparison of work and measure efficiency • More effective monitoring
- 15. Step 3: Monitor and identify your obvious inefficiencies
- 16. Paying attention pays off Unmonitored, simple and complex issues can drive up the cost of a matter • “Stupid stuff” or low-hanging fruit • More complex issues • Consulting partner expansion of the scope • Failure to assign tasks properly
- 17. Step 4: Identify common tasks across matter types and build a budget using these tasks
- 18. Know your verbs • Define repetitive tasks across matter types and subtypes • Answering a complaint • Taking a deposition • Once steps in tasks are identified, quantify the amount of time each step should take • Once you determine tasks & time, it is easy to build a budget from the bottom up • Advanced task with significant payoff
- 19. Step 5: Manage your matters with checklists
- 20. Sweet spot of LPM process • Build a plan. Deliver to plan. • Phases and tasks are broken down • Inefficiencies are gone and budget templates are built • Use task templates to drive work process • Level of detail allows continuous process improvement • Multi-year process • True competitive advantage
- 21. Tools to transform your firm into a client-focused business through Legal Process Management
- 22. Budget, Pricing, Experience, Analytics, and Monitoring Links the budget of a matter to the cost of delivering the work
- 23. Call us today to set up a demo 484-895-1900 or visit us at prosperoware.com/umbria
Notas do Editor
- Start with an opportunity or matter Top down: start with an amount Monitor only: select a total dollar amount per phase without detailed allocation among team members or fee earner classes More sophisticated budgeting includes building a budget from the bottom up – start with task or hours. Start with an opportunity or matter Top down: start with an amount Monitor only: select a total dollar amount per phase without detailed allocation among team members or fee earner classes More sophisticated budgeting includes building a budget from the bottom up – start with task or hours.
- Example