Show Me The Math

The importance of cost estimates when engaging a law firm

By (author) Richard Brzakala

Publication date:

01 June 2020

Length of book:

152 pages

Publisher

Ark Group

Dimensions:

234x156mm
6x9"

ISBN-13: 9781783583966

BOOK DESCRIPTION
TABLE OF CONTENTS

Show me the math is the first book of its kind entirely dedicated to understanding all of the strategic benefits, importance, and the value of cost estimates for corporate clients as well as law firms. Leveraging a 20-year career in corporate legal operations, Richard Brzakala reviews a plethora of topics on cost estimates and presents an in-depth analysis of the cost estimate framework and what clients (and firms) see as the most valuable components of a cost estimate strategy. The book also tackles operational and implementation topics, the dos and don'ts of successful implementation, and a special focus on overcoming challenges and meeting client expectations. This is a comprehensive insider's view of what corporate clients expect from their panel firms and a playbook on how cost estimates can improve a firm's market competitiveness in an increasingly homogenized and challenging legal marketplace. Drawing on nearly two decades of legal operations experience, servicing multiple clients and hundreds of law firms in dozens of countries, Richard has compiled his observations on how cost estimates can benefit corporate clients, legal professionals, finance and marketing experts, law students, alternative legal providers, and procurement and pricing specialists, and assist them in managing their matters, costs, and overall relationships.

Chapter one: The benefits of cost estimates - Background - The increased popularity of cost estimates - What do clients look for in a cost estimate? - What don't clients want to see in a cost estimate? - How clients are empowered by cost estimates - The benefits of cost estimates to a law firm Chapter two: The mechanics of cost estimates - The continued utilization of the hourly rate billing model - Cost estimates based on task-based billing models - Utilizing dollar ranges in cost estimate proposals - Buyer beware - stay away from commercial (street) rates in cost estimates - Leveraging historical data and work - Highlighting cost savings and efficiency in a cost estimate - The importance of understanding variances and assumptions - Calculating the variance cushion - Leveraging law firm resources to develop cost estimates - Calculating the staffing utilization ratio - Challenging the traditional legal model - Monitoring staff utilization ratio in cost estimates - Measuring and monitoring work in progress (WIP) ratio - The impact of changing resources on a cost estimate - The benefits of using Alternative Fee Arrangements in a cost estimate - Third party vendor costs - How to treat disbursements in a cost estimate - The importance of a communication strategy - The criticality of properly defining and understanding scope - The importance of communication during the cost estimate process - Defining scope - The law firm's responsibility in defining scope - The unpredictability of "scope creep" and accounting for variances - Dealing with cost estimate overages - The blame game - dealing with law firm fault bias - Avoiding cost overages that impact a cost estimate - How law firms should communicate overages to clients - Dealing with multiple clients and instruction points on a cost estimate Chapter three: Operational challenges - Operationalizing a successful cost estimate strategy - Case study - US insurance company - Working through differences on a cost estimate - Educating lawyers on the business of law - Leveraging Legal Operation (Legal Ops) specialists - Why do in-house counsel fail at cost estimates? - Top ten list - what law firms dislike most about cost estimates - The resistance to utilize cost estimates - Beware of law firm caveats and disclaimers - Chapter four: Value and cost estimates - How does value factor into a cost estimate? - Measuring value using Value Indicators - Value Indicators - Law firm Value Indicator calculator - What happens in the absence of value? - Law firms need to stand their ground - clients are not always right - Unlocking the value of cost estimates - What type of insight or strategic advantage can cost estimate data give clients? - How clients track the success of a cost estimate - Tracking the success of cost estimates - How firms should leverage cost estimate data for the benefit of their clients - How can a firm win work on the basis of a cost estimate? - When are cost estimates a waste of time and not necessary? - Who cares about the math, show me the value! - Is there any room for an "instinctive approach" on a cost estimate? Chapter five: Other considerations - How third party pass through hourly rates impact a cost estimate - Treating cost estimates like a request for proposal (RFP) bid - The importance of trust in cost estimates - Challenging a law firm's cost estimate - How to get a firm to reduce its cost estimate - What to do when a cost estimate fails - Billing for a cost estimate - What is the future for cost estimates?