6/6/12

Legal Project Management Versus Process Improvement - Which Drives BFC?


Legal Project Management (LPM) can now officially be crowned the buzz-phrase of 2012. Although not many firms have fully integrated LPM in to their practices, the need for embracing it is a foregone conclusion. Being faced with this challenge has caused me to put many brain cells on the how and why of LPM and what will drive productivity growth in law firms. Ron’s post on productivity helped bring my thinking in to the clarity of this blog post. From what I am seeing, the market is setting lower prices and now firms are trying to reduce the cost of their services, which translates in to productivity growth.

To Ron’s points on growth in productivity, law firms need to become ‘better, faster, cheaper’ (BFC). Obviously LPM plays a role in this. However, I believe LPM is necessary but not sufficient for BFC. Because in most respects (and I’m sure other bloggers may chime in here) LPM is about doing something the same way only with more discipline. It’s about defining how we do things and then institutionalizing that effort in a standardize way.

I have touched on this point before, however the BFC angle refined my thinking and I drove me to the following BFC definitions:

Better: Doing it (a task, matter, etc.) with the same or more resources but driving an improved outcome (a.k.a. higher value).
Faster: Doing it with the same resources and with the same outcome, but in a shorter period of time.
Cheaper: Doing it with fewer or cheaper resources and driving the same level of outcome.

Translated in to ‘legal’ these become:

Better: Doing it with the same or more hours, but getting a better result.
Faster: Doing it with the same hours, but in a shorter time-frame (probably with more people).
Cheaper: Doing it with fewer hours or by using people with lower rates or with technology.

There is an old engineering adage that says "Faster, better, cheaper — pick two." This idea basically argues any system can optimize at most two factors, to the detriment of the third. Using LPM, at best you can restructure the project plan to improve one or maybe two of the factors, but only by sacrificing a reduction in the third one. Clients seem to be pushing on ‘cheaper’ with minimal attention to the other 2 factors. This begs the question of where should the focus be?

Real productivity growth comes when you change the system, which leads us to process improvement. This is where most businesses gain a competitive edge. They employ long-term process improvement techniques, along the lines of Six Sigma.

Which brings me back to my point: LPM is necessary but not sufficient to drive improvements in law firm productivity. Project management brings discipline to a process, but is not about improving a process over time. I believe growth in productivity is what clients really want, whether they see this explicitly or not. Discussions about ‘efficiency’ are too often vague with no real discussion about what that means (e.g. no first year associates on the bill). Instead the presumption is that ‘cheaper’ equals efficient.

So I’ll start my campaign now for BFC to become the heir-apparent buzz phrase for 2013. Instead of being a technique like LPM, it's actually the desired goal.

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5 comments:

Scott Preston said...

Toby, I believe LPM (done correctly) serves to improve all three areas of BFC. As you noted, one of the primary foci of project management is process improvement. But just talking about process improvement without any ability to measure improvement doesn't get you very far. Without any metrics on work performed, you have very little ability to locate opportunities for improvement. With LPM you will have a better understanding of what it takes to perform tasks and this should point to opportunities for improvement (the better bucket). With LPM you also have a better tool to push work down to a lower cost center thus lowering costs (the cheaper bucket).

By breaking a project down into discreet tasks, you have a much better ability to find inefficiencies in process and improve upon them (the faster bucket).

Firms can focus solely on "process improvement" and most have for many years. The typical response to that story is - we are too busy to stop and think about process improvement. Since most firms have no metrics by which to judge improvement they just keep talking about process improvement.

LPM is a powerful tool that will
enable law firms to
1) better understand workload (staffing needs),
2) look for opportunities to become more efficient and
3) push work down to cheaper cost centers.

Steven B. Levy, author of Legal Project Management said...

Toby, I respectfully disagree with the way you've characterized LPM and its goals. I've posted a detailed response here: http://lexician.com/lexblog/?p=1078.

Larry Bridgesmith said...

Toby and Steven, taking issue with either of you is not for the "faint of heart". However, between your very well considered and articulated positions lies a "both/and" solution which validates your deep experience and knowledge of the issues confronting today's practice of law and the business model required for sustainable success. LPM is but one of many tools which evolving law firms will turn to in order to shape the new world of the business of law. There will be many others, including well implemented approaches to process improvement. BFC will be the output of a collaborative approach to the problems faced by the legal industry today. Project management specialists, process improvement specialists, lawyers (in house and outside) as as well as law firm business advisers (and many other disciplines) all have valuable insights into solving the dilemma of client trust and law firm success. We currently have the enormous advantage of disequilibrium which enables us to examine many approaches to better business practices in the legal industry. Let's seek and encourage multidisciplinary solutions rather than choosing the victor before the battle has been joined. Thanks for the great insights and critical questions.

Emory Rhodes said...

The key deliverable at the end of this stage will be the schematic design report in planning tool, which contains drawings and outline specifications for all design disciplines.

Jim Hannigan said...

At my firm LPM is driving process improvement by first proving the need to understand the work in order to plan it, let alone improve it. LPM is addressing the most pressing practical needs. You can't do PI until you know the work inside and out and LPM is a first step to that point. Most other businesses focus on PI because they already know the makeup of the tasks very well, and have optimized already.

 

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