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.
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)
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
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
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 del 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.