a roadmap for lpm and pricing success

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

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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