This is our Cost Recovery issue which focuses (almost) exclusively on the hot topic of Cost Recovery and its impact on the support services of law firms.
What’s New
Some of the new and exciting things happening at Mattern & Associates:
The 2010 Mattern & Associates Cost Recovery Survey
We have wrapped up our 4th national and internal cost recovery survey and are in the process of distributing the results to the participants. With responses from eighty-one firms from across the United States and Canada and our web-based reporting, this is by far the best survey we have completed to date. Read more about the Survey in the cover story.
Application of a U.S. Patent for Mattern Plan B Cost Recovery™
In November 2010, we filed a patent application for Mattern Plan B Cost Recovery™. This is an alternative method of cost recovery that results in higher realizations and lower costs to law firm clients. You can read more about Mattern Plan B in this issue.
Mattern & Associates “Mattern of Fact” Blog
Our blog (now called “Insights”) continues to be a source of unbiased information and opinions for the legal community. When you get a chance, stop by and offer your opinion on an issue related to the support services.
Mattern Webinars
Our webinars continue to be popular. This issue includes our 2011 webinar schedule.
Upcoming Appearances
You can plan on seeing us at the Association of Legal Administrators Annual Conference in May in Orlando, the CIO/CFO show in New York City in June, the ALA Large Firm Retreat in Chicago in September, and the COO/CFO show in October in New York City.
Speaking Engagements
So far this year, we have spoken to the Denver and New York City ALAs and the Large Firm Luncheon group in Chicago. We recently presented at the Grand Rapids ALA on March 24th and at the Charlotte ALA Retreat on March 25th. If you are interested in having an expert from Mattern & Associates speak at one of your events, please contact Maria Herron atmherron@matternassoc.com.
What the 2010 Mattern & Associates Cost Recovery Survey is Telling us About the Current and Future State of Cost Recovery.
The 2010 Mattern & Associates Cost Recovery Survey is complete and the results are being distributed to the eighty-one (81) law firm participants. This is the fourth cost recovery survey conducted by Mattern & Associates and represents, by far, the most complete snapshot on how law firms are managing their soft cost recoveries.
Some of the more pertinent findings:
- The percentage of Firm’s overall capturing and charging for black & white prints has increased from 33% in 2008 to 47% in 2010. The only exceptions are firms in the Southeast and those with 150-199 attorneys.
- The percentage of overall firms capturing and charging for convenience scans has remained flat since 2008 with relatively few size or geographic exceptions.
- Firms report that clients are pushing back/refusing to pay for the following:
- Legal Research – 86%
- Word Processing/Secretarial Services – 55%
- Telephone Calls – 51%
- Black & White Copies – 48%
- Net realizations of hard costs remain strong. However, for soft cost recoveries, erosion is apparent and predicted to increase.
- The percentage of firms recovering legal research has decreased from 97% in 2008 to 73% in 2010, a 24% decrease.
- The percentage of firms recovering telephone costs has decreased from 92% in 2006 to 59% in 2010, a 36% decrease. This is the largest decrease we have seen in any one area of our survey since its inception.
- Firms are implementing methods to capture and recover costs in the emerging areas of electronic data storage, data rooms, website downloads and electronic document processing.
The complete web-based survey results are only being provided to the participants. However, an Executive Summary overview of the study has been developed. If you are interested in a copy or participating in the 2012 survey please contact us.
Computing Needs: Making Tech Hardware Purchases
Published Chicago Lawyer Magazine September 2010
Over the years, a law firm will procure millions of dollars of technical hardware for the benefit of its employees and physical plant. These technical items can range from multifunctional devices to cost recovery systems to vertical lifts for 34-story office buildings – quite a diversity of purchasing decisions. Given the complexity, importance and variety of these purchases, we propose the following suggestions to ensure your firm benefits most from what you buy.
Some of the things you should do:
- Examine total cost of ownership – For a simple example, an inkjet printer costs initially much less to purchase than a laser printer, but not when you add supply costs at certain volume levels.
- Try before you buy – Everything looks great in the showroom. Insist on an on-site trial as part of any procurement process, with no strings attached.
- Determine and check your specs – Based on your initial specifications, make sure you have stipulated detailed performance criteria in the contract (and the associated Request for Proposal).
- Build flexibility into every deal – Make sure you build flexibility into any type of maintenance pricing based upon volume. Before you commit to any type of monthly or annual volume, make sure you are going to reach it, and that there are credits if you don’t.
- The lemon out-clause – Have language in the contract that addresses what happens if the unit or units do not work to the specifications detailed in the contract.
- Specify the after plan – Be very specific about what happens at the end of the deal. Do you own the equipment? Is there a buyout? If so, how much is it? Who is going to support it after this point and what will it cost you?
In these economic times, the power is in the hands of the buyer. By following these tips, your chances of success for any tech hardware purchase will improve dramatically.
Mattern Plan B Cost Recovery™, U.S. Patent Pending:
At Mattern & Associates, we have been working with law firms to improve their cost recovery since 1997. Since that time we have seen the advent of “Skaddenomics,” the implementation of print and scan recovery, and increased pressure from clients on all forms of soft cost recovery.
To address this current issue, the team at Mattern & Associates has developed an alternative method and strategy to capture and recover soft costs known as Mattern & Associates Plan B Cost Recovery™. This involves converting your on-site copies, prints, scans and litigation support services into hard costs which are billed by your vendor to your client, exactly as you do today when they are produced offsite. This strategy results in a lower unit cost being billed to your client and a higher net realization to the firm, due to the decrease in internal and external write-offs (hard costs). As one Executive Director stated after viewing our benchmarking of their current cost recovery realizations and what they would be if the firm implemented Mattern Plan B Cost Recovery™, “This is the way that cost recovery was meant to be.”
Is your firm facing the following?
- Increasing client pushback or refusal to pay for internally generated soft costs
- Increasing internal write-offs of soft costs
- Decreasing billable cost recovery revenue
- Lack of a print and scan recovery strategy
If the answer is “yes” then Mattern Plan B™ may be the strategy for your firm to improve billable revenue. To arrange a free consultation, please contact Maria Herron of Mattern & Associates at: mherron@matternassoc.com.
Upcoming Webinars
Offsite Records Storage
June 15 – for firms with less than 100 Attorneys
June 22 – for firms with more than 100 Attorneys
This webinar will detail how to reduce current offsite records storage expenses and minimize or eliminate the permanent withdrawal fees that limit your firm’s ability to manage your offsite inventory.
Multi-functional Equipment
October 11 – for firms with less than 100 Attorneys
October 18 – for firms with more than 100 Attorneys
This webinar will detail operations and multi-functional workflow options to help firms close gaps in cost recovery, document management and workflow systems.
