Transaction Management

Pennington Hennessy Transaction Management

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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


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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


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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?


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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)


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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


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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


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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.


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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.


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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


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Assumptions

• Your assumptions • The client’s assumptions

Gantt Chart

Diary and Planner


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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?


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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


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Discussion

Discussion of scoping with team: • The client • The plan – post-its! • Assumptions & risks • Key personalities & others

Project management tools

1. File review


2. Excel spreadsheet


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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?


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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


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Letter of engagement

Plan the work, work the plan

Do

• Supervise and monitor • Involve the wider team

Client


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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?


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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


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Review (2)

• Brief internally • Change your processes • Update your internal learning • Create case studies/best

practice

Client

Summary

Business

Transaction Management