building a matter budget from...
TRANSCRIPT
ILTA WebinarOctober 12, 2012
Agenda Building matter budgets
Utilizing existing time and billing history Bottom Up Methods to streamline the process Understanding the goals and results of data mining
Other approaches to data mining Building an experience repository Time for questions at the end or send them via chat
Two Part SeriesPart II
Beating Matter Budgets to Success
Friday, November 2, 201212:00 Noon Eastern
The Scenario Attorney calls needing a budget
Similar to several historic engagements Attorney typically will name specific engagements Usually want 3 ‐5 prior engagements
Depends on size of current project The larger the dollar value, the more comparisons
Wants an analysis and draft budget Similar to a draft memo that they can edit
Gathering Information Do we need a detail or summary analysis? When would current proposal likely begin? Need analysis and comparison in today’s dollars
Who did/should do the work? How many hours did/will it take? How much did/will it cost? Was it/will it be profitable? Were any special pricing models used then? Can we do it more efficiently today?
What is Data Mining? Isolating the time entries from prior engagements
Into a warehouse table/ Excel Offline
Scrubbing that data to be more accurate Each engagement in a separate warehouse Analyzing and comparing that data to mine information
Our Discovery Process Establish Prior Engagements
3 – 5 engagements First and last time entry date
How long did each last? Is each one complete? How far apart are they from each other?
Rates and personnel have changed Did they use phase/task codes?
If yes, are they accurate? If no, are there any that will fit this work?
Who Can Assist? Data scrubbing assumes familiarity with the subject
Most pricing specialists don’t have that knowledge Legal assistants are best help
Find someone in that specific area Will recognize time entries and wording used They know the people and the processes They can correct the data extremely fast They have great ideas for streamlining
Imparts importance of phase/task coding
Scrubbing the Data Who did the work
Individuals not helpful for this task Historic staffing levels needed
Title (Elite) or Rank (Aderant)
More specific = more accurate List each person in an engagement
Figure out specific staffing level Or use tool to automate
Scrubbing the Data Break down by tasks
Existing or new task codes? Free form codes while doing research Attorneys want to set their own codes
Will block billing be an issue? Multiple time entries have been combined into one Semicolon dividing the entries Need to split out to assign to different tasks
Tools to Assist in Scrubbing Streamline the Process
Excel Budgeting Tools
Warehouse concept Remove from live T&B system Massage the data offline Work on gobs of time entries at once Not worry about .10 hour
Tools to Assist in Scrubbing Automate staffing level substitution Split out block entries Assign phase/task codes
Full text index Searching within date range Automate narrative search Free form coding
Examples
Analyzing the Data Ultimate Goal
Prepare for analysis and comparison Apples to apples
At time ticket level
Analyzing the Data Compare engagements
How many hours for each task? Who (what staffing level) did the work?
Can it be done more efficiently?
Was it able to be billed and collected? What is the realization rate? Did we have any AR writeoffs?
What is the value in today’s dollars? Must use historic staffing level
Analyzing the Data How does each engagement compare to current proposal?
Lessons learned – do they apply currently? Establish basis for draft budget Examples
Building the Budget Select one engagement as starting point
Summarize by staffing level into a budget Price at current (or future) rates Modify hours as needed Assign staff (if known) Apply pricing models and adjustments Allocate out over time
Other Ways to Use Warehouse Averaging Legal costing Top down analysis Mid‐Engagement Actuals
Averaging For clients with many similar engagements
Put all engagements into one warehouse Take average per engagement as a budget
Legal Costing For firms that do repetitive work
Cost out all scenarios possible for that work Build in calculations for each scenario Provides consistency Efficiency in pricing Pre‐approved profitability Benchmark for legal project management
Top Down Budgeting For attorneys who like to pull a number out of the air
Analyze historic percentage per task detail Take total dollars and allocate Does it look reasonable? Something to work from
Mid‐Engagement Actuals Begin budget mid‐engagement
Code existing time entries Add new time entries each month Budget to Actual analysis on warehouse
Experience Repository Building an experience repository Once scrubbing is done, keep it around Could be warehouse or prior budgets
Profile each one to search later Properties (meta data) Lessons learned from each one
Questions
BudgetManagerRandy Steere