transaction management
DESCRIPTION
Transaction Management showcase on 11th October by Jamie PenningtonTRANSCRIPT
Pennington Hennessy Transaction Management
LETG 11 Oct 2011
1
Transaction Management Jamie Pennington
The presentation as delivered was not tailored to any particular firm or in-house methodology. To be truly useful this session needs to be tailored to the firm and/or practice area concerned.
Jamie Pennington Jamie”penningtonhennessy.com 07887 536309
Jamie Pennington
• Trained as Military Engineer • Geographic Information Systems • MBA – Change Management • Logistician in First Gulf War • 20 years a project manager - military
intelligence • 15 years working with law firms
Pennington Hennessy Transaction Management
LETG 11 Oct 2011
2
Objectives
• Be able to define transaction management • Understand why it is crucial to the firm’s strategy • Know the 4 phases of transaction management • Be aware of some project management tools
available • Understand that pricing and risk are linked • Gain practical tips that can be used in the next
transaction
A story
How does that story relaTransaction Managem
Pennington Hennessy Transaction Management
LETG 11 Oct 2011
3
Context
Most lawyers have exactly the same personal marketing plan
Most law firms have the same business plan
What does the client want?
Question
What is transaction management?
Pennington Hennessy Transaction Management
LETG 11 Oct 2011
4
Transaction Management
Aim: Predictable delivery of what the client wants at a profit level we can accept
What is the typical transaction process?
The Playing Field
Scope – What?
Timescale – When? Resources – How? (money, people & processes)
Pennington Hennessy Transaction Management
LETG 11 Oct 2011
5
What are we trying to balance?
Risk & Reward
Why is it important?
Client
Internal efficiency
Transaction management
Getting it right …
• Drives profitability. Increases predictability and repeatability
• Lowers and manages risk for you • Lowers and manages risk for the client • Delivers client value • Raises your game to the next level • The client will get what they want and what
they expected on time and in budget • You will build trust • You will get more work and better work
Pennington Hennessy Transaction Management
LETG 11 Oct 2011
6
How to do it
Reality Check
What happens in the real world?
The council of perfection
Think of a real client transaction which you wish could have gone better
Pennington Hennessy Transaction Management
LETG 11 Oct 2011
7
The Cycle
Inverse Dinosaur
Where do we start?
Review
• What do we know about this client? • How did we learn it? • Who knows what within the firm? • What do we know about doing this kind
of work? Do we make money? really? • What difference does it make to what we
are going to do? – rules of thumb.
Pennington Hennessy Transaction Management
LETG 11 Oct 2011
8
Communicate internally & reflect back to client
Pricing
The client is best served when you have the opportunity to scope and plan before offering a pricing model. Plan before pricing
Scoping
• What the project will involve, • What the risks and possible
difficulties are • How the project should be
organised and tackled.
Pennington Hennessy Transaction Management
LETG 11 Oct 2011
9
Scoping
Objectives • Engage with client • Establishes and tests boundaries • Frames pricing. Not cost plus. Risk and Reward.
• Evidences commerciality • Builds relationship Client
Source of Innovation & Creativity
Scoping tools
• Discussion - Assumptions • Gantt Chart • Diary & planner • Risk management matrix
Discussion
Their reality is the sum of their assumptions
Pennington Hennessy Transaction Management
LETG 11 Oct 2011
10
Assumptions
• Your assumptions • The client’s assumptions
Gantt Chart
Diary and Planner
Pennington Hennessy Transaction Management
LETG 11 Oct 2011
11
Risk management matrix
• A risk is anything which will derail the plan
• What are the assumptions you are making?
• How risky are the assumptions? • What happens if we’re wrong? • Who carries unidentified risk?
Risk management matrix
Assumption Associated Risk
Likelihood (1-5)
Severity (1-5)
Total = Likelihood x Severity
Plan
Only 2 prospective buyers
3 buyers 4 5 20
4 buyers 2 5 10
Change Planning
When the plan changes: • Who should be contacted? How? • Who can authorise the work? • What should happen if nobody within
the client is contactable? • How should the change be logged? • How shall the additional work be
invoiced?
Pennington Hennessy Transaction Management
LETG 11 Oct 2011
12
Plan (2) – Transaction Plan
The aim of the transaction plan is to set out how the transaction will be delivered on time and within a budget that enables the firm to meet its profit requirements. Plan before pricing
Case Study 1
A true client deal for the firm. Scoping discussion. In pairs.
Planning tools
• Discussion with team • Project management tools • Team management plan
Pennington Hennessy Transaction Management
LETG 11 Oct 2011
13
Discussion
Discussion of scoping with team: • The client • The plan – post-its! • Assumptions & risks • Key personalities & others
Project management tools
1. File review
Project management tools
2. Excel spreadsheet
Pennington Hennessy Transaction Management
LETG 11 Oct 2011
14
Project management tools
3. Gantt Chart
Case Study 2
A true client deal for the firm. Working on laptops. Given a copy of the firm’s Gantt chart.
Pricing
Why does the proposed model best balance risk and reward?
Pennington Hennessy Transaction Management
LETG 11 Oct 2011
15
Pricing • Standard • Discount Rates • Blended/day rates
Time Based
• Risk assessment • Payback • Bid/implementation Success/abort
• Contingency • Assumptions • Bid/implementation
Fixed/capped Pay
men
t te
rms
Pricing
Review your possibilities
Analogy time – take one of the pricing models and give a “real world” example of where it is used successfully
Team management plan
• Plan and enforce the team communication
• Ensure the individuals know the change management protocol
• Make sure that you stay proactive, not reactive
Pennington Hennessy Transaction Management
LETG 11 Oct 2011
16
Letter of engagement
Plan the work, work the plan
Do
• Supervise and monitor • Involve the wider team
Client
Pennington Hennessy Transaction Management
LETG 11 Oct 2011
17
Supervise and monitor
• Communicate • Who is doing what and why? • Time recording
Client
Involve the wider team
• They understand the unfolding big picture
• The client knows them and their roles
• The client’s specialists know their roles
Client
Check
Client
• Communicate • Are we on track? • Are the clients happy? • Do we foresee any fresh risks emerging? • What could we do more of/less of? • Have any of our scoping issues changed?
Pennington Hennessy Transaction Management
LETG 11 Oct 2011
18
Case Study 3
A true client deal for the firm. 2 real changes – with scenarios. What is the process, and what is the implication? Use of Gantt chart
Completion
Client
Review(1)
Client
Client satisfaction Pricing
The way we did things
The people we used
Pennington Hennessy Transaction Management
LETG 11 Oct 2011
19
Review (2)
• Brief internally • Change your processes • Update your internal learning • Create case studies/best
practice
Client
Summary