legal project management

Vanderbilt Law School Professor, Cat Moon, doesn’t just have one of the coolest names in the legal industry, she also brings insights and a perspective on the human element of legal project management. Human centered design thinking is a core function of her teaching. It all goes back to the fact that you can teach law students, lawyers, and legal managers all the concepts in the world, but it’s all for naught if you leave out the human element. Professor Moon also gives a brutally honest view of why women in the legal field tend to leave law firms in order to pursue their creative and life passions outside the firms.

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Marlene and Greg are recently back from Legalweek in New York. While there, they went around to a number of vendors to ask a simple, but relevant question, “what are you doing to change the legal industry?” This week, we get the perspective of four vendors:

It is a fairly easy question, but one company that had a hard time answering? Thomson Reuters. It was a disappointing response from the company that probably has changed the industry more than any other. The marketing cuts that TR has taken for conferences was painfully apparent at Legalweek. One suggestion: if you’re going to cut the quantity of your representation at conferences, make sure you increase the quality of your presence.

Information Inspirations

James Goodnow interviews American Lawyer Editor Gina Passarella
Fennemore Craig, PC Managing Partner, James Goodnow asks AmLaw Editor Gina Passerella what she observed from the panels at Legalweek. Passerella notes that clients are craving data analytics, but that law firms are not producing them. Perhaps because it is not in the firm’s best interest to do so?? Greg isn’t sure that the full reason, but it needs to be a part of a conversation, which many clients and their firms simply are not having. All problems are communications problems. It’s easy to talk on a panel about what’s wrong… it’s tougher to have that conversation face to face. But that’s what needs to happen. Continue Reading Episode 26: Cat Moon on Legal Problem Solving for the 21st Century

[Ed. Note: Please welcome guest blogger, Steve Nelson, Managing Principal, Law & Government Affairs, The McCormick Group. – GL]

One of the big topics discussed recently in the legal press is how the very large firms continue to separate themselves from the rest of the AmLaw 200. In an article accompanying the American Lawyer’s financial disclosure reports for the AmLaw 100, the magazine revealed some pretty shocking statistics; while the top 50 firms reporting significant increases in revenue per lawyer, profit per partner and profit per lawyer, the next 50 firms reporting decreases in all of these statistical categories.

This is not a new phenomenon. Over the past few years, many observers have been writing about how the mega-firms are pulling away from the pack. You would think that a large number of midsize firms would be responding by illustrating how they are more efficient and provide very value to clients.  But a recent study performed by The McCormick Group seems to show otherwise.

Since around 2000, and particularly since the advent of the Great Recession of 2008, firms have responded to calls for efficiency by hiring three types of professionals, those handling practice group management so that each practice area can be run more efficiently and more profitability, pricing professionals to respond to corporate calls for alternative fee arrangements, and legal project managers to work directly on engagements to provide value to the clients and efficiency to the firm.

Of those three, one—pricing professionals, have become virtually de rigueur in the AmLaw 200.

Largely because the firm needs to have someone with a financial background respond to requests for proposals and other demands for alternative pricing, more than 80 percent of the AmLaw 200 have at least one professional focused on pricing.  And that has run the gamut from the very large firms down to the bottom of the AmLaw 200.

But the acceptance of practice group management and legal project management is much more uneven.  On the one hand, 60 percent of the AmLaw 50 firms have professionals handling each role, and 76 percent have one or the other.  And when one considers that nearly half of those who have not instituted such programs are either big New York-based firms or large one-practice specialty firms, the adoption rate among large multifaceted law firms is higher.

But as the accompanying chart shows, the percentage of firms having those professionals in place drops dramatically throughout the rest of the AmLaw 200; only 19 percent of the Second Hundred have practice group management professionals, and even less (13 percent) have LPM specialists.

Firms PG Mgt. LP Mgt. Both Either
Top 50 30 30 22 38
51-100 18 26 13 31
101-150 12 10 4 18
151-200 7 3 1 9

A few notes about methodology:

  • Firms were included as having these functions if they have professional personnel (not practicing lawyers) with identifiable responsibility over these functions, whether or not they included the words “practice group” or “legal project management.”
  • Professionals with a pricing or similar title were not included as having LPM responsibilities unless their title or profile included discussion of LPM. (At many firms, pricing personnel are supported by other professionals in the finance department who play a broader role within the firm.) 
  • On the practice management side, firms in some instances have designated just one practice (often IP) as having a practice group manager or business manager.  Those were included nonetheless, so the statistics may overstate a bit the number of firms having full-scale practice management programs. 
  • Of the firms in the top 100 that had no practice group management or LPM function, about half were either New York-based firms or were one-practice specialty firms.

The conventional wisdom among law firm experts is that the firms at the top are doing well because they often do bet-the-company work which commands whatever rates they wish to charge, and that alternative fee billing often works to those law firms’ advantage in terms of success fees on major transactions.  But according to Susan Raridon Lambreth, Principal with the Law Vision Group, while the largest firms do bet-the-company work, many of them also do a lot of other work that is increasingly fee pressured by major clients.  Many of the largest firms in the US are actually facing more pressure from clients on rates and efficiency than the mid-sized firms — by the size of the matters they handle and the nature of their client base.

“It’s the clients with sophisticated law departments that are putting the heavier pressure on firms when it comes to providing client value and the vast majority of their outside counsel are in fact at large firms.  As a result, large firms have significant pressure to provide volume discounts, detailed budgets or caps even on multi-year, complex matters and more. This has resulted in write-offs or downs in the tens of millions to over $100 million in many of the AmLaw 100 firms.”  

On the other hand, many mid-sized firms have a larger percentage of their client base with smaller or more middle market companies, she says, where there is less pressure to provide fee alternatives or budgeting, so the smaller firms aren’t really feeling as much pressure to change their approaches.  Another law firm consultant Timothy Corcoran of the Corcoran Consulting Group, puts it more bluntly.  “There are still a fair number of law departments doing a poor job of managing outside counsel.”

According to some industry surveys, resistance to industry change has been greater among the smaller and mid-sized firms.  Lambreth says that law firm leaders in those firms often want to institute changes, but they don’t have the partner buy-in.  There are a large number of partners that simply don’t see any need to change and it can be harder to make the business case for change short-term, even when there are long-term warning signs.

Indeed, instituting a PGM or an LPM program will often add up to between 5-10 new professional positions, which will often have a material impact to those firms which are already under pressure just to keep up with the previous year’s financial results.  That, Corcoran believes, is exacerbated to the fact that a number of smaller firms are laboring under a false impression about their standing in the market. “They have spent the last few years convincing themselves that clients have determined they’re just as good as the big firms and so now their philosophy is something along the lines of  ‘just as good as the big firms, but cheaper.’ ”  As a result, he says “they’re not doing anything particularly creative, such as embracing LPM to prove they’re just as good (or better).” Inevitably, they run the risk that another firm will come along that looks just as good and is another level cheaper and the client buys from them instead. Or the big firms that are embracing LPM and finding ways to generate higher profits at lower prices can now claim that they are in fact less expensive.”  So, says Corcoran, midsize firms are facing pressure “from above and below.”

So we seem to be at a crossroads:  the large firms that are doing the best economically have invested heavily in creating more value to their clients, while the midsize firms that are facing a more uncertain future are unwilling or unable to make changes so that they become more efficient.  That’s certainly not the narrative we tend to hear.

736-hp VW Golf

Toby Brown and I have had a number of discussions over the past few months on how law firms gather information during the new business intake (NBI) process. Toby comments that all of the focus on NBI is process driven, and that we are speeding up the process, but not really doing a great job of creating better information that can help the firm create a competitive advantage at a later time. Very little in the NBI reform/reinvention process is about better data. It focuses more on faster input of information to speed up the time to open a new matter, thus creating a faster turnaround on when attorneys can start (legally) billing time to a matter. It’s kind of like putting a huge engine in a Volkswagen Golf. Sure, it looks impressive, but if keep the same overall structure of the vehicle it doesn’t matter that you have amazing horsepower, if you can’t get those wheels to actually stick to the road. The same is true with the NBI process improvements.

Of course, with any of these process improvement projects, the idea is to solve problems that actually exist. Problems that “keep partners up at night” are usually the best ones to solve, and with NBI, the time it takes to open a new matter tends to be the biggest issue that partners dislike. Moving the NBI process from paper to electronic (even if the work flow process remains exactly the same) usually will speed up the time it takes to open the new matter. Tapping into existing client information, human resources, and accounting databases can help normalize some of the data, as well as auto-populate some of the fields. However, the information being gathered is essentially the same as you would get if you still had a paper-based system. Speed and accuracy have improved, but quality and better strategic data gathering has not.

So are we putting too much emphasis on the intake process, and not finding ways to improve identifying key data points of the matter? Once the matter is opened, no one wants to go back and update the data again. What if the matter type was wrong? What if the summary of the matter was wrong? What if the estimates of what this matter’s estimated costs were wrong? The typical reaction that I’ve seen to these questions is, “So what? If the matter is open, and we can bill… then let’s bill!”

Many of us depend upon the information gathered in the NBI process. Toby’s group attempts to analyze matter budgeting, matter management, and costs to take on a matter using details gathered in the NBI process. Marketing uses the data gather during the NBI process to determine big matters for Public Relations news releases, and submissions to third parties like Chambers. Business Development uses this information to determine what types of work the firms is strong and weak. Conflicts uses the information to determine what work we may not be able to take on in the future. Incomplete, or bad information gathered during NBI can have a long-range negative impact on the firm.

Let’s just call the new NBI process what it truly is: A way to open a matter quickly and ethically. Now, let’s identify what new NBI process is not: A competitive intelligence, business development, knowledge management, big-data tool. At least, not by itself. Perhaps if you combine the data from the NBI system with other pieces compiled along the timeline of the matter (e.g., billing data, financial data, personnel data, document records, docket information), you can improve the ability to make good decisions and streamline other processes, but bad data in the beginning can cause a domino effect down the line. If a matter type is mislabeled during the NBI process, it can cause a shift in results in later analysis. So, what do we do?

I’m reminded of a post we did a couple years ago on firms needing to do After-Action Reviews for matters. If we don’t ask ourselves what happened, and how can we get better, we tend to continue to act in a similar fashion (good or bad) in the future. If we misidentify information, and never incentivize partners to correct that information, we’ll continue to misidentify. Most firms have absolutely no incentives for partners to identify when information gathered during NBI process needs to be clarified or corrected. We also give almost no incentives to close matters. Yet, both of those processes are key pieces in our quest to better know our clients (KYC), gather BI/CI information, assist in identifying cross-selling opportunities, and gathering historical information to better plan how we price and staff similar matters in the future. I would think that the return on investment in beefing up a mid-matter review (MMR), and the closing matter process (CMP) would be substantial.

Just off of the top of my head I could think how a quick MMR and a sustained CMP process would help trim down the time it takes to identify key matters to be used for PR purposes. How it would accurately identify which attorneys are experienced in certain matter types. And, how it would assist in business intelligence gathering when pitching for client RFPs or new firm industry business pushes. I understand that the MMR and CMP procedures require billable attorneys to take time out from billing and actually identify the business development and overall matter management needs of the overall firm. Our first instinct would be to place this responsibility on the shoulders of the Billing Partner or Relationship Partner. We all know where that would lead… well, actually, that’s probably why were where we are at the present time. Instead, how about we look at this as a Professional Development, or as a Mentoring, or as a Succession Planning process? The MMR might be handled by a Senior Associate or Junior Partner and allow them to see how a matter is being staffed, and determine what has happened between the opening of the matter and the current state of the matter. The CMP could be handled by another Partner that worked on the matter, and allow them to also review what could be handled better the next time a similar matter is opened. A quality MMR and CMP structure allows for better data, better matter management, and a better leader for the next matter.

Perhaps we stop thinking of the New Business Intake in a vacuum. Instead we combine the NBI, MMR, and CMP into an overall process of cradle-to-grave matter management. The NBI is step-one, and should be improved to help speed up the process of getting matters opened, conflicts checked, people assigned, and have the firm start working on behalf of a client. But it is step one only. If we ever want to leverage our prior work in order to improve or gain new work, then the NBI cannot be the first and only step.

Jeff Carr in his Race Car

Jeff Carr announced his retirement from his GC role at FMC Technologies recently. For those who follow the legal change landscape, Jeff has been a consistent beacon, advocating for change for quite some time. His model at FMC is one of (if not THE) most successful client implementations of legal cost savings in the world. His recent Forbes article noted how the company has grown significantly since he took on the role, while his legal spend has decreased. Fortunately Jeff has stated that even though he is leaving FMC, he will not be leaving the fight for change. We would all do well to follow his future efforts.

His retirement, combined with other recent challenges got me thinking. A recent trend has been the involvement of the procurement department in helping legal departments control costs. The use of procurement is obvious, since their role is controlling costs and saving money for clients. Silvia Hodges has done a lot of work on this subject, and the role of procurement continues to evolve in this aspect.

However …

If you look at what Jeff has done to drive his success, procurement is not the driving factor. Instead, if you dig into his “budget with consequences” thinking, what you will find is not procurement, but instead project management.

Jeff began developing his approach based on a few core ideas. One of them was the lack of feedback built into the purchase of legal services. For years he had noticed that when law firms performed poorly, instead of giving them constructive feedback, clients would just stop sending those firms work. This meant opportunity for new firms to come in, but eventually the new firms would make some mistakes (since everyone does eventually) and then they would be marginalized too. The result was not good for Jeff as a client. There was never much improvement, only a stream of new faces.

So Jeff’s approach was designed to change this aspect. If you have ever heard one of his presentation (and I have been privileged to actually present with him), he will note that if you do one thing as in-house counsel to change things, it is to implement after action reviews of matters. This one thing will drive a lot of positive changes.

After action reviews are all about project management. These efforts drive better planning and budgeting for the next engagement, creating a project management life-cycle.

So in thinking about Jeff’s approach and contrasting it to the rising trend of procurement in the legal space, a thought occurred to me. If I were a client looking to better control my legal spend, I would not be knocking on Procurement’s door. Instead I would be calling up the Project Management Office and getting them involved pronto. Effective project management will drive sustained cost savings, as clearly demonstrated by Jeff. Procurement will work to understand the cost per unit of service, and then drive down that per unit cost as best it can. And we all know what “per unit cost” is in the legal space: Billable Hours.

I rest my case. And I wish Jeff the best in his future endeavors.

P.S.: I shared a preview copy of this post with Jeff to make sure I wasn’t full of it. He responded with this wonderful comment:

Like most things law-related, we tend to complexify things.  Perhaps it’s because we make money from complexity – either because it take more time to navigate the complexity and ambiguity, or because we’re needed to play the role a Sherpa through the mist (or more likely both).  As I’ve gotten older, I’ve tended to become more of a Zen GC – there is beauty in de-complexification (what the non-law world might call simplification).   Project Management is one of those things – it’s really a quite simple three step process – Who, does What, When.  This is then the first step of the grander P3 process of Plan, Perform, Perfect.  The after action part you focus on occurs in the Perfect stage.  The interesting thing to me is that the Perform step is relatively unimportant – just follow the plan with zero defects or deviations.  It’s the Plan and Perfect stages that actually matter.  

But then again, as Confucius might have said:  The solution to the problem is simple.  But those with the Power to solve the problem find it quite difficult.

Previously I have ranted about how billing task codes are not magic pixie dust. There seems to be a broad perception that task codes will solve pricing and legal project management problems for all practices. “If we only had task codes for [insert type of work], we would know how to price this.”

My general feeling is that A) the task codes were not designed to address this need. B) The use of task codes is highly inconsistent, so the data is poorly structured. And C) Even if the data was in good shape, it won’t provide magic pricing and budgets.

Recently I was ranting on this subject with a friend who works in the e-billing space. I was especially going off on how the task codes were not intended for solving the pricing problem. The e-billing person made an offhand comment about the current state of the use of task codes for their actual intended purpose. This got me thinking. So I checked the task code web site to better understand the actual intent of the development of task codes and the need for a standard set of them.

There was not much about intent, but here’s what I found:

In the mid-1990’s major US law departments and insurers wanted to better understand the services provided by outside counsel. 

As part of this effort, it was decided that electronic invoice time entries should be task-based and aggregated by type of work performed, resulting in the possibility that multiple time entries could result from the services performed in a single day on a matter. 

What occurred to me is that the task codes have not even met the original purpose. My e-billing friend’s comment centered on the fact that clients use their own unique task codes and that lawyers need training in order to get effective use of them. And we know how often lawyers go to training. Rarely.

I read Outside Counsel Guidelines (OCGs) on a regular basis and keep an eye out for things like task codes and their use. Just last week I read one where they do not even use ‘L” codes. They have their own letter.

What I see is very inconsistent use of task codes by clients, compounded by inconsistent application of the codes by law firms. Result: Serious questions about whether task codes have even met their intended purpose.

Yet somehow task codes are poised to solve a problem they weren’t built to address.

Good luck with that.

Image [cc] Free 2 Be

Marlene Gebauer, in a guest post, takes me to task for my recent post on how the law firm model is not broken. Based on the comments I received from that post, I told her to “get in line” if she wanted to take a shot at me, but then I decided to hand her the microphone.

Enjoy.

Every Legal Project Manager who read Toby’s last post on “The Business Model Is Not Broken” is saying a big THANK YOU right now. They are pretty much guaranteed employment for life based on his musings.

I agree that financial management of legal practice, the “cost of doing business” if you will, is extremely important-whether that be in terms of hourly billing, alternatives fees or collections.

But a law firm is not exactly an assembly line for automobiles. In order to create internal efficiencies, automotive companies did create assembly lines and automate. Which many argue we can and should do at least in certain instances of legal practice. But what automotive companies also did was measure the average time it took to complete each task and communicate that to its employees. So the internal standard was established and those who purchased cars benefit from the lower cost and faster delivery times.

Law firms may have a difficult time establishing the metrics delivered in the automotive industry because they deliver a service, not a product. Law firms, billing hourly, have to standardize time entry by time increment (easy) and task code (not so easy) to determine how long a specific task will take. Some may say that alone is impossible, but let’s play devil’s advocate and say it is doable. People who purchase cars don’t ever see (or likely care about) the internal production metrics. In contrast, legal clients review and have a say about those time entries-and they care about them a great deal. A law firms’ billing classification system may not jive with a client’s. A client may need certain sorts of coding to correspond to their own internal systems. While a firm can adjust to a client’s needs, if done significantly, the internal efficiency metrics become meaningless because you are no longer comparing apples to apples. If that happens I guess you just hire the big guy with the cat o’ nine tails.

What started as a modest group of pricing people 2 years ago (I believe it was five of us) has grown now to about 200 people. The group is now comprised of pricing and project management people with a wide variety of titles and roles. Some in the group are strictly in these roles. Others have dual roles, such as CFO and pricing.

When we started this group we outlined three primary goals. #1 is professional development. Most programs on pricing, alternative fees or project management are basic and directed at just getting people to embrace the ideas (and are usually taught by people from this group). So finding opportunities to extend our own knowledge is quite limited. The second goal is developing a knowledge-base of best practices. And the third goal is driving the development of products and services that meet are ever changing needs.

In order to meet these goals we decided to create a conference built around them. The result is the upcoming P3 Conference. P3 stands for Pricing, Practice Innovation and Project Management. The conference is being held in Chicago (to make it relatively easily reachable) on September 30th – October 2nd. The sessions will include the best in the world from law firms and in-house legal departments. The programs will include roundtable discussions, with experts discussing how they tackle problems, debating various approaches and methods. The content will be decidedly advanced. No one will be trying to convince people pricing and project management are good ideas. Instead we will be discussing in-the-trenches experiences and lessons learned. This is all directed at meeting goal #1.

Additionally we will have directed feedback sessions involving companies that are providing and developing cutting edge tools and services. These sessions will explore product offerings with an eye towards what is in development. Attendees will give their feedback on what they like and what they need. These sessions are focused on Goal #3.

The programs on Oct 2nd will cover a variety of topics, including numerous best practices – meeting Goal #2.

So … if you are involved in pricing, practice innovation or project management at your firm or in-house legal department, or if you just want to hear from the best in the industry on these topics, you will want to attend this conference. It will be a unique experience sharing some valuable ideas among some really great people.

I will add – registration is limited. This is not your usual marketing ploy to fill up seats. Given the relatively short notice for a conference and the desire to hold it in this time frame, we ended up with limited space. We plan to correct that for next year, however, this year space actually is limited. So if you want to attend, I highly recommend you register early.

I look forward to seeing many of our readers there.

PS: I would be remiss in not mentioning the support of the LMA in driving this conference. As noted above, this is being done on short notice, but the LMA Team is working hard to make this happen and they are doing it in style.

PPS: I would also be remiss in not thanking those on the Planning Committee: John Strange at Vinson & Elkins is the Chair. Kristina Lambright at Akin Gump, Purvi Sanghvi at Patterson Belknap and Tim Corcoran the President-Elect of LMA and consultant with Corcoran Consulting Group.

This post is the final part of a whitepaper written by Scott Preston and Ryan McClead. The full paper can be downloaded here.

Conclusion

Image [cc] – ANDRA Drag Racing

By now it is obvious there will be no return to the glory days of an ever-expanding legal market and steadily rising hourly rates.  Legal Project Management, in its earliest incarnation, awakened many firms to the need for better project planning and greater control over budgets. But it also put a heavy burden on partners to ensure delivery of services at an agreed upon price without providing them any mechanism to control the process.

The second generation of Legal Project Management, by incorporating task management and monitoring and control mechanisms, now gives the partner a more effective way to deliver services on time and within budget.  LPM 2.0 makes it possible to catch problems as they are happening not weeks after they’ve already occurred.  It improves communication with clients by being inclusive of the client and making the end-to-end process as transparent as possible. This gives clients an opportunity to have meaningful and contextually relevant discussions with their attorney, greatly increasing the level of trust between them.

In shifting from a time management paradigm, in which attorney hours are often captured days or weeks after the work has been completed, to a task management paradigm, where pre-assigned tasks are checked off as the work is done, LPM 2.0 leverages technology to provide contextually appropriate support resources to attorneys at the precise moment that they are needed. This leads to a better use of resources, time, money, and ultimately to a better understanding of the legal process for both the client and the attorney.

Legal Project Management in its more complete form, incorporating all three stages: Planning and Budgeting; Execution; and Monitoring and Controlling, provides many benefits to clients, to attorneys, and to firms. By far the most important benefit to everyone is a more consistent, repeatable, and continually improving practice of law.

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This post is the fourth part of a whitepaper written by Scott Preston and Ryan McClead. The full paper can be downloaded here.

Legal Project Management 2.0 

The next generation of Legal Project Management software (LPM 2.0) extends and expands on the Planning and Budgeting capabilities of earlier products, and it includes tools to help with the Execution and Monitoring and Controlling stages of Project Management. Personal beliefs to the contrary, most attorneys do not execute, monitor, or control their projects any better than they plan and budget for them.  LPM 1.0, with its focus on Planning and Budgeting is a great introduction to the concepts of Project Management, but LPM 2.0 fills in the missing pieces.

Execution

Image [cc] – Tim Olson

The Execution stage is where those who were assigned tasks during Budgeting interact with their tasks. Execution may seem the most intuitive and simple of the stages, but it is this stage that will be the most difficult for firms to embrace, because quality Execution requires a wholesale change of attorney mindset from meeting hourly requirements to completing assigned tasks. This, more than any other aspect of Legal Project Management, most fundamentally cuts against the established practice of most firms. Hourly goals determine bonuses, equity points, promotions, office selection, and nearly every other aspect of an attorney’s professional life within a firm. In LPM 2.0 efficient quality work beats quantity work every time. This turns conventional law firm “wisdom” on its head.  While convincing firms to drop their existing pay structures and adopt a new model is way beyond the scope of this paper, and we absolutely do not expect such a change to take place immediately or to happen easily, we do expect it to happen eventually. The benefits of a task-based system of execution far outweigh that relic of a bygone era of plenty, hourly targets. Those benefits are realized in the final stage of LPM 2.0.

Monitoring and Controlling

By systematically focusing on task completion, rather than hours worked, this final stage can produce accurate project status reports and track financial projections to ensure that the project is on schedule and within budget. With up-to-date task information it is also possible to produce ongoing budget to actual variance reports, for both time and costs, which can be shared with clients or used for internal evaluation and efficiency improvement.  Until we begin to attribute work to tasks, reporting budgeted to actual work is a manual process involving the deconstruction of time entries and/or the reliance on phase and task codes, which in the past have proven unreliable. Monitoring task completion also provides a context for the work being done. The client can look through agreed upon tasks and get a much better sense of how a project is progressing.  This transparent process builds trust with the attorney and eases the pain should the project run into unforeseeable stumbling blocks or cost overruns. For the attorney this eventually becomes a much more intuitive way to work. No one gets up in the morning thinking, “I need to spend 4 hours and 6 minutes on this, and 2 hours and 24 minutes on that.” They think, “I need to complete this task, and when I’m done with it I can begin on the next one.”

In the traditional hourly work model, After Action Reporting and Analysis, should they be done at all, are little more than personal assessments of “how we did” or “where we need to improve”. They are at best subjective analyses heavily influenced by personality and politics. A change in focus to task-based Execution and Monitoring will provide hard statistical data, allowing firms to continually improve their processes and procedures, and to correct or reward their employees based on actual work performed and tasks completed. Over time clients will begin to see improvement in the firm’s delivery of legal services, efficiency and productivity should increase and costs should come down. In addition, this process of tracking tasks and closely monitoring results has implications for several other aspects of practicing law, including:

Managing Risk –As soon as a firm begins working the perfect project plan, reality intercedes and the plan must adapt. Tactics may change as they learn more about the project; and resources change as the workload fluctuates. Timing constraints and requirements may change as a client’s needs evolve.  Without task-based execution and monitoring, the partner has no control or oversight of the impacts these changes have on the project and no ability to effectively keep the client informed about the impact of these changes on timing and costs.

Improving Workflow – By accurately tracking task completion firms will have a much better understanding of the “bottlenecks” currently slowing project completion. Resources can be brought to bear on specific areas giving the team an opportunity to navigate troubled waters more effectively.  

Resource Management – The most valuable (and expensive) resource a law firm has is its attorneys and support staff.  For decades law firms have added headcount on an annual basis, irrespective of any real analytics to support that decision.  Many believed that even if the work wasn’t there immediately, they could always raise rates later to make up the gap. By incorporating the execution and monitoring phases of LPM into a firm’s standard operating procedure, the firm can start to truly understand how it actually works and begin to intelligently “right size” its workforce.

Defensibility – The execution phase, because it memorializes who did what and when, provides an audit trail of exactly how a project was worked and completed.

A Universal Project Plan – By incorporating the execution phase into an LPM solution, firms can manage and monitor projects that include external resources.  This might mean pushing work out to lower cost centers (for example outsourcing e-discovery services) and tracking their progress, or it might mean allowing a client to follow the progress of the project plan (to an agreed upon level of detail).  

Improving Future Project Plans – By tracking task performance firms will have a much better ability to streamline workflow for future work as well as improve project plans for future use.  This makes each iteration of the project plan more accurate than the one before and greatly simplifies the creation of new project plans.

Improving Experience Databases –A complete LPM system tracks individual performers’ execution of specific tasks, which can provide detailed information about who within the firm has experience performing which specific tasks and how much experience they have. This information can be leveraged by various knowledge systems and “Know-Who” databases.
Identifying Professional Development Opportunities – The complete LPM system tracks not only the tasks that individuals complete, but also the time it takes to complete a task. This provides valuable insight into Professional Development and continuing education opportunities.

This post is the third part of a whitepaper written by Scott Preston and Ryan McClead. The full paper can be downloaded here.

Legal Project Management 1.0

Image [cc] – tmray02

Even before the economic slump a handful of legal technology vendors recognized an opportunity to help firms better understand and budget for their non-hourly billing or Alternative Fee Arrangements (AFA). AFAs are not new to the legal industry; contingency and fixed fee pricing have been available for a long time, but in recent years there has been a significant increase in AFA requests from the client side. Corporations have begun to push back on the standard annual increase in lawyers’ billing rates. They want not only better pricing, but better communication and a better understanding of the amount of time and effort spent completing individual tasks. Attentive vendors have started adding AFA planning and budgeting functionality to their existing software solutions, or in some cases writing new solutions from the ground up.  These rudimentary systems have quickly garnered the label Legal Project Management software (LPM 1.0).

While Project Management as a discipline has had nearly 60 years to mature and develop, the application of PM principles and techniques to the legal environment is still very much in its infancy. Traditional Project Management can be thought of as a stool resting on three iterative and overlapping developmental stages: Planning and Design, Execution, and Monitoring and Controlling. For our purposes in LPM we call the first stage Planning and Budgeting rather than Design. All attorneys believe that they execute, monitor, and control their projects already, but many will concede that they do not plan or budget adequately. Consequently, Planning and Budgeting is the clear low hanging fruit of LPM 1.0 and vendors have focused most of their efforts where they believe they can most easily gain a foothold.

Planning and Budgeting 

After a new legal project opportunity is defined planning begins to determine the full scope of the project. This is done by defining the desired outcome for the project and developing a Work Breakdown Structure (WBS) that will ultimately lead to that desired outcome.  The WBS defines any major objectives and project phases, and then breaks those down into discrete tasks required to meet the objectives and complete the phases.

Once the desired outcome and list of tasks is established, the project manager can determine the necessary resources and levels of expertise required for each task, as well as any resource constraints that might impact the outcome.  Those constraints might include expertise (Do we have the right people to do the work?), or time (Do we have the capacity to complete the project on time?), or technology (Do we have the right systems in place?).

Budgeting is intended to provide a realistic estimate of the eventual costs to the client as well as considering the firm’s expenses.  The project manager assigns individual people, or resources, to specific tasks identified in the WBS, and then estimates the amount of time each task should take to complete.  This is where the various alternative staffing scenarios come into play. By experimentally adjusting the degree of leverage on a particular matter (i.e., pushing work to the lowest cost performers who can adequately complete the work while meeting all other project completion criteria), the firm can reduce the cost of its services for the client, better compete with other firms on price, and potentially increase their own profits.

LPM 1.0 promises to provide firms with three new abilities: (1) The ability to create baseline preliminary project plans or templates; (2) the ability to create matter specific budgets based on prior client work that can be used to win new client work; and (3) the ability to compare alternative staffing scenarios, which will allow the firm to produce the same work product at a lower cost to the client while still making a profit for the firm.

Unfortunately, most of these first generation LPM products struggle to balance the development of project plans that are detailed enough to create accurate budgets without being so complex that they slow the budgeting process to a crawl.  Many of them have trouble modeling a firm’s prior work to develop project plans for future work, because phase and task codes available from past matters are not accurately or consistently recorded. And while alternative staffing scenario analysis sometimes makes it possible to reduce the cost of services to the client, it does little to help the firm better understand the process or arrange their staffing levels over time.

In contrast to the Project Management three-legged stool, LPM 1.0 is a one-legged stick chair. It can hold up as long as the project is otherwise perfectly balanced, but the slightest wobble sends the project swiftly to the ground. Legal projects are rarely so well balanced. The greatest plan and budget in the world is often out of date as soon as the matter begins. Attorneys must “work the plan” and adjust as they go. If they don’t actively manage and adjust resources throughout the course of a project, then successful completion of a matter or even successful achievement of today’s immediate goals may be nothing more than coincidence and will certainly not be easily repeatable. LPM 1.0 with it’s focus on Planning and Budgeting is a good and necessary step, but on its own it does nothing to reduce the risk of bad outcomes, cost overruns, time delays, or client dissatisfaction. Additionally, it does nothing to improve the firm’s efficiency, or to increase the transparency and quality of communication between the firm and the client.

The promise of LPM 1.0 is that Planning and Budgeting, in conjunction with the work a firm is already doing, will be enough to meet client demands and maintain business, but in reality, it is in the next two stages that the proverbial LPM “rubber meets the road”.