A Roadmap for LPM and Pricing Success
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Transcript of A Roadmap for LPM and Pricing Success
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A Roadmap for LPM and
Pricing Success
Where is your firm or practice area?
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The LPM Maturity ModelFive steps to transform your firm into a client-focused business
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Drivers of change:
• Price, client, competition
• Pressure maturity drives
maturity
Maturity will be different based on practice
`
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Step 1:
Budget and Monitor
at the Matter Level
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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
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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
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• 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
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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
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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)
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Step 2:
Matter type and phase
development
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Going deeper
for monitoring and
pricing
• First level of
breaking down
matter types and
phases
• The most important
step in LPM journey
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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
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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
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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
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Step 3:
Monitor and identify your
obvious inefficiencies
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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
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Step 4:
Identify common tasks
across matter types and
build a budget using
these tasks
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• 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
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Step 5:
Manage your matters with
checklists
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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
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Tools to transform your
firm into a client-focused
business through Legal
Process Management
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Budget, Pricing, Experience, Analytics, and Monitoring
Links the budget of a matter to the cost of delivering the work
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Call us today to set up a
demo 484-895-1900
or visit us at
prosperoware.com/umbria