Mattern Plan B™
Right about now, you should be
asking yourself:
•
Should I be converting my
rm’s operations to more of a hard
cost operation?
•
Won't this require a change in
the way I sta , equip and manage my
rm’s on-site operations?
If your rm is outsourced and is
su ering from poor realizations, then
Mattern Plan B Cost Recovery may
be the way you will want to migrate
your operation.
is is where you
convert your on-site operation into a
hard cost operation. It may require
changing the way you sta , equip and
manage your rm’s on-site opera-
tions.
e advantages of this type of
set-up are that it lowers costs, lowers
billable rates to your clients, and
increases realizations for your rm.
Your rm will also be out of the cost
recovery business.
In the end, change is di cult. If
your rm has been operating on
price reduction as a lead negotiation
strategy, it is di cult to change that
concept. If your rm is experiencing
poor realizations and is considering
migrating to a more hard cost opera-
tion, that, too, will come with
changes in the culture that are
di cult. But change is only di cult
in the short run; in the long run, the
business of running a law rm is not
a game won in the short term, but
one that is managed for the long term
with strategies that bene t the entire
organization.
Net Realizations
We all hear arguments regarding
clients not paying for so or hard cost
recoveries, and while it is true that
some clients are taking a very hard
stance against them, the vast majority
of clients will and do pay for reason-
able, well-documented charges.
is
fact, then, leads us to examine the
status of hard costs versus so costs.
When comparing hard versus
so costs, the key is in the net realiza-
tion. Net realization is the di erence
between what the rm bills and
actually collects while also taking into
account what is being written o
internally by the billing attorneys and
externally by the clients.
e average net realization on
so costs is right around
y percent
(50%)
while the average hard cost
realization is approximately 98%. e
di erence lies in trust and veri ca-
tion. Both internal resources and
external clients trust that hard costs
are legitimate charges, and trust in the
legitimacy of the charges directly
manifests in a signi cantly increased
collection on the costs.
Door Number Two
Door Number Three
5
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Mattern & Associates
Mattern Plan B™ Cost
Recovery may be the way
you will want to migrate
your operation. The
advantages of this type of
set-up are that it lowers
costs, lowers billable rates
to your clients, and
increases realizations for
your rm. Your rmwill also
be out of the cost recovery
business.
