Legal Firm Statistics Will DRIVE YOU to LPM: Beat the Best!

49f62b3258d94d6d4ac269834a99e685_1424395469_cropped.jpgJim Hasset is the founder of LegalBizDez, which helps law firms increase profitability by improving project management, business development, and alternative fees. He recently wrote a chapter in the book by the Ark Group entitled 2020 Vision: The Future of Legal Services., and a lot of it is really important to note to those law firms out there that are reading out blog. The entire chapter of this book is really interesting, but every point he makes surrounds one clear-cut fact, “firms that improve LPM will have a competitive advantage because its growth is being driven by clients.”

Hasset quoted a statistic that is what drew me in and pretty much called on me to write this blog post. In a 2014 Chief Legal Officer Survey, Altman Weil asked a question: “Of the following service improvements and innovations, please select three you would most like to see from your outside counsel.” There were about six concepts listed. The three most chosen were “greater cost reduction (58%), more efficient project management (57%), and improved budgeting and forecasting (57%).”

In Atlman Weil’s 2015 survey, he asked another question of managing partners: What are your opinions on which of fourteen current trends are more likely to be permanent. The answer? 93% put an increased focus on practice efficiency as number one. Legal Project Management leads you to each one of those trends and improves them exponentially for your law firm–greater cost reduction, efficiency, and improved budgeting and forecasting.  But when the same survey asked “Has your firm significantly changed its strategic approach to efficiency of legal service delivery?” only 37% said yes. 

If you are a law firm that wants more clients (and what law firm doesn’t?) than you have to be better than your competition. There are still so many law firms that have yet to get on the LPM bandwagon, even though we KNOW that law firms that have started down the LPM path have the best opportunity to get ahead compared to those who haven’t. Law firms, if you want to beat the best, you have to be the best! What is stopping you?

Don’t Be a Statistic in 2016, Gain Competitive Advantage!

2015 is coming to an end, and so has your budgeting season.  If you have been reading along, or even if you haven’t, here are a few facts we learned through different surveys and research throughout the year.

A study by Grant Thorton, LLP shows that only 36% of businesses use scenarios and “what-if” analyses to re-check possible outcomes of a strategy.

A study by F1F showed that, out of 1,200 senior managers surveyed yielded stastics like “17% of large businesses suffered financial loss due to poor spreadsheets, and 78% say that key financial decisions are supported by spreadsheets.”

Companies spend weeks or even months completing the annual budgeting process, because it is so important. But too many companies fail to supplement the annual budget with planning activities that could strengthen performance management, gain competitive advantage, and of course drive profit!

Read our white paper to figure out how NOT to be a statistic in 2016, and instead stay ahead of the competition. 

Screen Shot 2015-07-16 at 11.38.35 AM

 

Cloud Analytics: Paving the Way

images-1For years, we heard talk of the infamous “Cloud” and how it will cut costs right at implementation. “It has significantly cut upfront capital investments, initial consulting and on-going personnel costs for the vast majority of solutions.” But cutting initial costs isn’t the only benefit the cloud has. Nucleus Research has done more ROI case studies than any other research company, and they see even more value than reducing implementation costs. And each case study has shown the cloud’s cost advantage has made it highly desired. So desired, in fact, that being modern and different by choosing the cloud is not really considered different. Instead, it has become the status quo to have enterprise applications that are cloud-based. “Instead of touting cost savings when evaluating a cloud app, businesses must now justify a higher cost when considering an on-premise solution.”

In 2016, Nucleus found that customers will be increasing spending on analytics by 36%. “As customers search for new solutions, it is important that they take note of the benefits the clod provides because it addresses pain points specific to analytics usage.” In comparison to an on-premise deployment, cloud analytics  delivers “2.3 times more Return on Investment.”  The initial cost savings are exciting, and a main point of focus when we talk about switching to the cloud, but there are even more advantages. For example, the upgrade cycle. Many on-premise upgrades require spending more money, and tons more work. But a cloud-based solution upgrade is simple and inexpensive to change.

Nucleus believes the biggest advantage the cloud has to offer is integration. “Streamlined cloud applications are much easier to integrate, delivering on the promises of Big Data.” Their study found that 86% of analytics users are unhappy with data preparation capabilities, and 92% desire to add additional data sources. “Cloud analytics solutions often have more pre-built connectors that allow users to pull from more data sources more quickly. Many new cloud applications are able to more easily integrate even disparate data streams for a more comprehensive analytics solutions that can provide better insight with a full view of the business.”

This integration gives organizations access to an unlimited amount of information and delivers efficiency, which makes them more powerful as a whole. “Plus analytics is increasingly being integrated with strategic business applications. That has a bottom-line effect on ROI. Better yet, integration itself cuts costs significantly.” The cloud provides an easier path. With the many options that are now available for integration with cloud analytics and other applications, ROI will continue to improve. Initial costs are low, but you can focus on even more value of the cloud for the future.

 

Original article appeared at nucleusresearch.com.

 

 

PwC Finds Pricing & Profitability Law Firms’ Top Priority

PI_Jan15_art3PwC has posted their findings from their 2015 Annual Law Firms’ Survey. Through interviewing the Top 100 firms, they have discovered that a top priority for the future of law firms is to focus on pricing and profitability.

Firms are continuing to invest in business improvement programs. The focus of these programs for Top 10 firms is to drive profitability and enhance support services, whilst firms outside of the Top 10 continue to feel pressure to reduce costs to remain competitive. “A growing number of firms have identified the problem and the solution. Pricing capability and sophistication at a firm-wide and individual partner level is being harnessed and for those firms it is having a swift and significant impact.”

It all falls back into the main idea that communicating and understanding your clients is what leads to a successful law firm. A one-size-fits-all process is no longer the most useful. It results in unhappy clients, and a less profitable law firm. “This depth of understanding the client is a critical precursor to being bale to create and articulate to the client an effective pricing strategy or methodology on a particular matter.”

Providing partners with the right tools and methodology for pricing decisions is also considered key. The article discussing the study mentions that pricing improvement has a very quick ROI. “The PwC report found that even IT projects whose objective is improvement of matter pricing, have an average ROI timescale of only four months.” A lack of correct pricing tools “results in what most firms regard as an unacceptable level of what the report referred to as Unplanned Fee Income Write-offs.”

But, the good news is there is a problem AND a solution. With the right tools, they write-offs are significantly reduced. “Pricing capability and sophistication at a firm-wide and individual partner level is being harnessed and for hose firms it is having a swift and significant impact.”

Do You Want to Avoid a Fire? Dashboards are the Answer

yangin-alarm-sistemleri-2For years, people have sought the crystal ball. A way to somehow sniff out disaster before it occurs. The ability to possess this knowledge gives a leveraged advantage to those that have it. Clearly, if you knew things before they happened you could make decisions to avoid disaster. Sometimes those decisions are life changing. Consider how the simple design of the smoke detector has changed lives. Before the smoke detector, the common man knew little about fire prevention. A select few could come to your home, look around, and be on their merry way after delivering you the information. Now, look at the statistics below to see how the common man’s use of the smoke detector changed your safety.

  • Three out of five home fire deaths result from fires in properties without working smoke detectors
  • More than one-third (37 percent) of home fire deaths result from fires in which no smoke detection are present.
  • The risk of dying in a home fire is cut in half in homes with working smoke detection.

You own a house. And in that house are multiple smoke detectors, decorating the walls and ceilings of random rooms awaiting the rare instance that your house does go up in flames. These smoke detectors do just that, detect the smoke before the fire so that you and your family get out safe. It wouldn’t be beneficial if your house were on fire, burning to the ground and suddenly and alarm goes off telling you there’s a fire. I think at that point we’d already know.

The CEO of any sized company doesn’t know IT jargon, nor can he spend the time needed to look at loads of spreadsheets and discover what is going on. When a CEO of any sized organization looks at information about the progress of their company, one thought is on his or her mind “What can I do to make us more profitable?” Fixing mistakes discovering where you went wrong is the first step to answering that question. It’s not really beneficial to know all the good you’ve done. Boosting company morale is great, but when there is red in your charts on your dashboard, and metrics show your competition is surpassing you, you know you have to stop it immediately.

Enter Dashboards. The crystal ball for your corporation. Complete with graphs and charts that represent your data. The number one reason to implement data visualization in 2015 was demand from executive leadership for self-service analysis. “Data visualization becomes a critical enabler for disseminating insights to senior leaders who may not have the technical ability, or frankly the time, to customize reports or analyze data in Excel” (Gleansight Benchmark Report 2015). You can use dashboards to visualize performance, but the real value is using them to detect the smoke in your organization. We seek the crystal ball, but those without dashboards cannot see disaster coming before it strikes. Their “house” is exposed to an environment consistently described as “putting out fires.”

Consider the following facts that are directly related to dashboard ownership:

  • Better decision making – Simplistic views and revenue streams provide immediate insight to pivot your corporations quickly
  • Revenue Growth – By being able to visualize your stream by relevant segment (i.e. Region, department, product, sku, etc..) changes can be made to enhance further growth in faster growing areas.
  • Improved Operational Efficiency – The knowledge to know where and why we are losing profitability can be known before it’s too late. (See the Smoke Detector Concept above)
  • Enhanced Customer Service – Value added services through visualization for your customer base. This allows your customer to make better decisions with you as their vendor!

If you knew this detection or crystal ball existed for your corporate “house”, then why wouldn’t you own it?

Smoke detectors save lives andyangin-alarm-sistemleri-2 they save homes. Their purchase has become a no brainer in the personal residence industry. They are a proven tool for detecting issues before they occur.

In the corporate world, the same critical detection exists today with Dashboards. Everyone can use them, everyone can gain from their on-demand, visually stimulating, and easy-to-use interfaces. Therefore, the question can no longer be, why do I need it? But instead should become do I need 1 for every office?

The corporate life you save today may be your own! Remember where there is smoke there is fire!

Article originally appeared on Smartceo.com

 

Budgeting Tips for CEOs

video.yahoofinance.com@51b6e7b0-36c1-3fc1-9616-cd99aeae36b4_FULLBudgeting season is among us, and that can be stressful for any employee–especially CEOs. Given that the CEO has their hand in all aspects of their business, budgeting for the year can be another added stress and an even heavier work load. But the CEO of any company needs to rid themselves of that added work in order to focus on what’s important, the future of the company and meeting the goals that get them there. As a CEO, confidence in these goals is key. Here are a few tips for CEOs trom Truesky to ensure that you reach them.

 

1. Define objectives: No matter how amazing the plan, goals need to be put in place. Defining clear, attainable goals will bring the company together, motivate employees and bring you one step closer to surpassing competition.

2. Involve your team: As the CEO, having a hand in everything may seem best, but it’s teamwork that will carry you through to the end of your plan and beyond.

3. Plan & Strategize: Plan for multiple scenarios so that you are always prepared and know how to adapt and make changes in any given circumstance.

4. Account for everything: Every piece of data and information is important! Having a solid budgeting and forecasting system will make keeping this data together seem like a breeze.

5. Make cash flow targets AND profit targets: “Every budget should have profit targets and cash flow targets, because the two bottom line measures are very different and they require different kinds of attention to control them.”

6. Forecast and re-forecast: predictions need to be constantly reevaluated because changes through the year, that you couldn’t predict, will always happen.

7. Most of all, use the right tools!: It’s impossible to succeed in everything mentioned above without the right tools. “When you’re growing your business, it is crucial to maintain financial parameters and targets every step of the way. By setting goals, involving knowledgeable people in the process, developing flexible plans, and keeping your tools up to date, budgeting and forecasting should be as seamless as possible. Even though life throws its curveballs from time to time, following these tips will help ensure that you and your company are prepared to tackle anything and emerge victorious in your industry.”

Three Ways Spreadsheets Are Holding You Back

spreadsheet-hell

 

Traditional spreadsheet practice for Planning, Forecasting and Reporting is falling by the wayside. Microsoft Excel is powerful, but for the exponential data your organization has it’s power is just not enough. Strengthen your organization by understanding the ways that tiresome, stressful spreadsheet use can actually hold your company back.

 

  1. Spreadsheets are very susceptible to human error: Incorrect numbers and calculations not only cause a domino effect of mistakes throughout, but they cause speculation of your credibility. When you rely heavily on spreadsheet use, these mistakes can be detrimental. Today, your usual workday and work environment is fast paced. There is no time for error when entering your spreadsheet numbers, but it takes TOO much time to
    stress over every detail to ensure perfection. You need information in real-time. With a business intelligence solution that still uses the familiarity of excel, but eliminates the chance for mistakes you will be leaps and bounds above the competition that still uses spreadsheets, and you have an even smarter way to analyze your data.
  2. Heavy reliance on spreadsheets does not give you the ability to forecast as often, and be as advantageous, as you can: With a business intelligence forecasting solution, you won’t start a budget from scratch. Your organization could continuously forecast at least 18-24 periods forward, and months of crunching numbers can be consolidated to days or even hours. Real-time information and rolling forecasts means your business can focus on today, tomorrow and even manage the future.
  3. It’s challenging to add a dashboarding tool to your processes: But dashboards are actually a great, easy way to analyze data. It’s nearly impossible to view and understand multiple spreadsheets at one glance. With a dashboard, you can see charts and graphs that make all of those spreadsheets make sense. Eliminating the time you’d spend to understand cells of spreadsheets, and adding time to your regular work day.

Eliminate heavy spreadsheet use and empower your business.

 

Top 5 Bad Excuses for Resisting Legal Project Management

Clients are constantly calling for better efficiency and cost-effective delivery of legal services.01_homeSlide So why would any legal firm turn down an offer for legal project management, “a rapidly-maturing discipline that is the proximate consequence of the enormous pressures in-house legal leaders now face to trim budgets, choke back rampant costs and long-entrenched inefficiencies, and, particularly, keep a tight leash on outside legal spend.” ?

According to Pam Woldlow, there is no reason, and here are her Top 5 Bad Excuses for turning down Legal Project management:

1. My clients don’t want or need LPM: 

“While all clients may not understand LPM nomenclature, they all want what LPM delivers: better project scoping, better planning and budgeting, better communication and collaboration, and tighter monitoring and control of budgets and costs. Why else would we be seeing such a dramatic increase in RFPs, demands for hard budgets and serious movement towards more cost-effective alternative fee arrangements?”

2. If we are efficient, we won’t make as much money. (And the corollary: if we are efficient, we won’t be able to meet our annual hours requirement). 

“Clients notice which lawyers are careful stewards of their money and which ones deliver great services and great value. They also notice the lawyers who dawdle, churn, reinvent the wheel, communicate poorly, and manage matters indifferently…Efficient lawyers are sought after; inefficient lawyers face tough sledding.”

3. I’ve practice the way I do for decades, and I’m not going to change now. 

” This increasingly obsolete perspective ignores the inevitable collaboration needed by firms that have expanded exponentially, dispersed geographically, and have engagements  involving ever more cross-office participation. The fact that the Single Leader Approach no longer works – and that it does nothing to effectively disseminate accumulated knowledge — is not keeping lawyers threatened by change from insisting that it remains the one true service delivery path.”

4. All my matters are unique, and LPM imposes a bunch of lockstep protocols that will standardize all legal work and devalue my legal judgement. 

“The astronomical growth of Legal Process Outsourcing and other alternative legal delivery vehicles clearly demonstrates that in fact law is a lot more commoditized than most law firm lawyers prefer to think.”

5. LPM is all about monitoring and metrics, and my mamma didn’t raise me to be a math major. Also, LPM will impose a whole new learning curve and add a ton of additional work to my already overburdened schedule. 

“Law is not about clean room manufacturing protocols; it’s about the nuanced affairs and interactions of human beings. Fear not: lawyers will continue to be indispensable. LPM, while it may make productive use of templates and technologies, is fundamentally a matter of common sense and collaborative communication, consistently applied. It sharpens up legal processes, not legal content.”

Woldow concludes her article by making sure her readers know that from all of those she’s spoken to and all of the research she’s done, those who have mastered LPM tools say that “LPM eases their burdens rather than increases them.”

How to Create and Analyze Your Cash Flow Forecast

Managing your cash flow seems easy. That is, until you start the task. You’re not sure where to start, how to make sure you have enough money for Screen Shot 2015-07-30 at 12.06.32 PMnecessities, or how to use any EXTRA money or even find it.  If you create a cash flow forecast, and analyze what you find, all of the questions you’ve asked yourself can be answered without stress or confusion. Fundbox.com offers a list of helpful tips on creating an analyzing “a cash flow projection that gives you a clear look at when money comes in, when it goes out, and what money you are left with after you have paid your expenses.”

1. Start with Incoming Cash

Cash flow forecasting begins with your sales forecast. “All you can make is assumptions at this point, although taking a look at trends from the past 12 months can help predict patterns.”

2. Tackle your Outgoings

Determine every expense for the month.

3. Don’t Forget Inventory

“Ideally, inventory purchases are made when the sales pipeline calls for it (& with your cash flow situation in mind).”

4. Use Accounting Software or Pre-Baked Templates

5. Analyze your Findings

“If your cash flow looks like it might be negative down the road, you’ll need to come up with a plan.”

Cash Flow forecasting can help you plan for all kinds of financial obstacles and purchases, as well as aid your decision making.

Manage Visual Analytics Effectively

Business Intelligence has changed the way of the business world and opens a new window to data analytics. Your entire organization becomes profitable, in time and in those dollar signs you are always wishing for but can never quite grasp. This article from TDWIdata_visualization[1] explains just how beneficial Visual Analytics, and its versatility, are for a business, but it also reminds us that Visual Analytics can quickly lead you down a messy path if it is not properly managed.

David Stodder gained perspective through his research (study of spreadsheet use, an interview with the director of data warehousing for Helzberg Diamonds, an interview with the director of pricing at Watts Water Technologies, & more) for this article, and his new viewpoints on Visual Analytics is worth sharing.

Visual Analytics tools allows users to work in a self-service environment with less reliance on IT for every question, dashboard, report, etc. Users have more power, and in most cases, this means users can move your organization closer to its final goals. But with this power, comes the ability to mismanage.

If growth in the use of visual analytics tools and applications is not managed carefully, it could also exacerbate the very difficulties that enterprise BI rollouts were intended to solve.

Through his research, Stodder found one consistency that matches 9Dots’ findings and opinions–start eliminating spreadsheet use. Through dashboard and analytics tools’ versatility, there are a variety of ways you can take this first step, but moving out of heavy spreadsheet use means more easily managed data and less confusion and stress in your work days.

The best course is to pursue “managed” or “governed” self-service that features good communication and division of responsibilities. A best practice is to establish a governance or center of excellence committee to support growth in self-service visual analytics. In this way, enabling “the masses” to be more data-driven in their daily strategic and operational decision making can be a realistic goal.

The key BI objective that Stodder has found through his many inquiries into well-run, profitable companies, is one that is consistent with our blog posts: “improving operational efficiency and performance through better information flow.” With visual analytics tools, users are offered a new set of tools that meets this objective AND it’s no more challenging to use. We understand that change can lead some of us into a frenzy, but it’s no better than the frenzy your already dealing with in your day-to-day. As long as the tools are managed and deployed correctly and your organization is comfortable with how to use it, they will push forward into new data environments AND improve your business.