It’s called the Relative Shapes Method.
Here is a quick summary:
First plan and plot what the character is saying. Import the audio into blender and add markers on the timeline with the sounds being made. It’s important to plot the actual sounds, not the correct spelling.
Next, do a pass keying only the open/close of the jaw and narrow/wide controls of the mouth based on those markers. It’s important to have a starting expression for the character at this point. Also, if the character talks out of the side of his/her mouth or has an accent, keep this in mind. All mouth shapes for each new sound are relative to the shape before it. More or less open and more or less wide.
For example, if you say “Ohh ,Pee” and “Cee, Dee”, the “ee” in “Pee” is narrower after “Ohh” than the “Dee” after “Cee.” There are all “Eee” sounds, but the width of the mouth depends more on the sound that precedes it. Hence the name, Relative Shapes.
If you are pasting “E” phonemes from the pose library, all the "E"s will be the same width and will not account for the difference. People are very efficient when they talk. Small differences in narrow/wide and open/closed can make a huge impact on how natural a lip sync animation looks.
I like to think of this as the “muppet pass”. Muppet mouths can only be open or closed, yet the puppeteers can get a good results just by varying this one parameter. For each sound the amount of change between open/closed, narrow/wide is what is most important.
At the end of this pass, 90% of the lip sync should be completed. I was always amazed at how much could be accomplished just by varying the mouth opening/closing and the lip corners changing from wide to narrow.
Next, do a pass on the tongue. Remember that the tongue moves very fast and often flicks from one state to the next. Set up the tongue poses for T’s and S’s. Be careful not to overdo the S’s. Showing too much tongue for too long, can make your character look like it has a lisp.
Finally, do one or more polishing passes based on the quality you are going for and the time you have to invest in the animation. This can vary greatly. If you are pressed for time, the lip sync should look decent at this point and you can stop. If you are going for movie quality animation, more polishing passes can be done to fine tune details.
That’s it. It’s a very effective and surprisingly fast way to create decent lip sync.