Firms are increasingly being put under pressure to deliver alternate engagement models, such as fixed fee arrangements or discounted rates, to win new business. In addition to this clients are demanding more transparency in the on-going handling of their matters so they can see for themselves the progress being made and the justification for work undertake.
Before we start to describe the Matter Planning process let examine some benefits firms should experience by using Matter Planning software.
- Improve forecasting accurately by leverage historic data on like matters or tasks.
- Reduce the risk of taking on matters that will result in lower margins than expected.
- Introduce a repeatable process that provides control and discipline in the business development process.
- Reduce the costs and time to respond to prepare an RFP or Alternative Fee Arrangement (AFA).
- Drive more new business at a known level of profit.
Firms can attempt to do matter planning with crude tools such as a spreadsheet or Microsoft Project. This sort of planning can handle the scheduling component of any plan but completely misses the financial analysis requirements. A spreadsheet could be used along with normal time and billing software that offers matter level budgets, however this becomes the start-from-scratch method and it may take years to develop a profitability model that can be manually maneuvered to do a forecast.
Matter Planning software provides the ability to go back in time and search for similar matters that can then link to provide an immediate historic prospective for a future matter. Convenient links include such items as:
- Phase and Tasks
- Specific attorneys and attorney levels
- Matter rates and actual internal costs
- Hours recorder and actually billed
After using the Matter Planning software tools the firm can easily develop a “roadmap” of revenue, hours, rates, costs and expected profit for a potential new matter. The firm can now present the client with a comprehensive financial matter plan.
This however is just the beginning, in How Matter Planning Actually Works – Part 2, we’ll look at how to manage the matters and track budgeted vs. actual performance statistics to then better forecast future matters.