a roadmap for lpm and pricing success
DESCRIPTION
Looking for a roadmap to get started on LPM? You know that LPM is critical to your firm’s future, but you don’t know where to start. Or, your firm has pricing processes in place, but has hit a project management roadblock. Prosperoware’s LPM Maturity Model provides a framework to work through this important transition in five steps.TRANSCRIPT
A Roadmap for LPM and
Pricing Success
Where is your firm or practice area?
The LPM Maturity ModelFive steps to transform your firm into a client-focused business
Drivers of change:
• Price, client, competition
• Pressure maturity drives
maturity
Maturity will be different based on practice
`
Step 1:
Budget and Monitor
at the Matter Level
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
Step 1 – Building your budget
Opportunity
or matter
Top down –
start with an
amountMonitor only –
select a total
dollar amount
per phase
Bottom up –
start with task
or hours
• 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
Start with top-down: amount budgets
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
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)
Step 2:
Matter type and phase
development
Going deeper
for monitoring and
pricing
• First level of
breaking down
matter types and
phases
• The most important
step in LPM journey
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
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
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
Step 3:
Monitor and identify your
obvious inefficiencies
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
Step 4:
Identify common tasks
across matter types and
build a budget using
these tasks
• 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
Know your verbs
Step 5:
Manage your matters with
checklists
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
Tools to transform your
firm into a client-focused
business through Legal
Process Management
Budget, Pricing, Experience, Analytics, and Monitoring
Links the budget of a matter to the cost of delivering the work
Call us today to set up a
demo 484-895-1900
or visit us at
prosperoware.com/umbria