October 17, 2018

Four approaches to business process improvement (Part 1 of 2)

By Jim Hassett and Tom Kane

Traditionally, lawyers have been trained to place enormous emphasis on avoiding risk, and little or no emphasis on increasing efficiency. As Ron Friedman put it:

Clients often want to know if there are any major risks: “Let me know if there are any boulders in this playing field.” Lawyers often hear that and think they need to find not just the boulders, but also the pebbles. The fear of being wrong—and of malpractice—runs deep. “Perfection thinking” makes it hard to approximate, to apply the 80-20 rule, [or] to guide in the right direction but with some imprecision.

But as in-house departments are increasingly pressured to control costs, they in turn are pressuring outside law firms to find ways to increase efficiency. Business process improvement is one path to the lower costs that many clients are demanding.

There is no shortage of theories, tactics, or opinions about the best way to increase efficiency, and hundreds of books and articles have been written on business process improvement and related techniques. Many of these systems have become so complicated and demanding that you can earn an MBA in the field, supporting what Susan Page called “the myth that business process improvement must be time consuming and complex” in her book The Power of Business Process Improvement.

This two-part blog series describes four approaches to business process improvement that we have developed with lawyers to increase legal efficiency quickly, listed in order of ease of use. We recommend that most lawyers start with Approach #1, which is limited to two simple questions. For critical, time consuming, and repetitive processes, we outline three increasingly sophisticated options which require more time, but can be more effective in simplifying the way you handle legal matters.

Approach #1: Two questions to improve a business process

Ask yourself:

  1. Of all the things you do for clients, what legal work provides the biggest opportunity to deliver greater value quickly or to increase efficiency?
  2. What could you do to improve this process?

Then do it.

Yes, this is so simple that it sounds trivial. But if in fact you stop and think about where inefficiencies lie, and act on what you already know, chances are you can increase efficiency very quickly.

No, it isn’t brain surgery, but for some lawyers, Approach #1 is a great way to get started. If you prefer an approach that is a bit more detailed, consider this longer list of questions.

Approach #2: 10 questions to improve a business process

  1. What steps and activities are typically included in this process?
  2. Which steps and activities does the client value most?
  3. Which steps and activities do not add value, and could be eliminated?
  4. Could you standardize and/or streamline the process?
  5. Could you reduce or eliminate repetition?
  6. Could you reduce or eliminate bottlenecks?
  7. Could you improve communication within the team and/or with clients?
  8. Could you reduce cost by delegating some tasks to junior staff who bill at lower rates?
  9. Could you reduce cost by “delegating up” some tasks to senior staff who can complete a task quickly at a low total cost?
  10. Could you reduce cost through legal process outsourcing of selected tasks to another law firm or a legal support services company in the US or in another country?

Part 2 of this series will describe two additional approaches.

October 03, 2018

Personal time management

By Jim Hassett

The simplest way to increase productivity is to manage your time better. While many time management techniques sound like common sense, that does not mean they are easy to implement.

In his widely used textbook on Project Management, Harold Kerzner suggests that you start by focusing on four key questions:

  • “What am I doing that I don’t have to do at all?
  • What am I doing that can be done better by someone else?
  • What am I doing that could be done as well by someone else?
  • Am I establishing the right priorities for my activities?”

If you need work in this area, identify troublesome areas:

  • How often are you interrupted?
  • How do you manage disruptions?
  • Can you section off blocks of solid work time?
  • Do you make “to do” lists and prioritize them?
  • Do you have a flexible work schedule?
  • Do you complete your work during regular work hours?
  • Do you micromanage?
  • Do you take on all tasks yourself?
  • Can you say “no?”

Plan how to avoid situations that can waste your time, including:

  • Poorly completed work that must be re-done
  • Phone calls, email, mail, casual office talk
  • Lack of delegation or improper delegation
  • Information that is not easy to find or use
  • Too many review cycles or layers of approval
  • Multiple meetings that aren’t useful
  • Postponing your work
  • Unclear goals or objectives
  • Excessive paperwork
  • Too little time and too much work
  • Lack of authority to make decisions or too many levels of decision making
  • Only dealing with crises
  • Perfectionism
  • Poor organization

Identify the time management techniques that will work best for you, including:

  • Manage your stress
  • Prioritize your tasks
  • Organize
  • Follow your schedule
  • Avoid useless memos, travel, conversations, emails
  • Don’t procrastinate
  • Do the hard parts first
  • Start as soon as possible
  • Carve out blocks of time for important things
  • Delegate wisely
  • Give attention only to items that need it
  • Don’t let others give up and pass off tasks on to you. Help them to figure out how to accomplish their own tasks, if necessary.

Effective time management begins with taking a single step. Identify one or two action items from the list above, and start today.

 

Some of this material has been adapted from the Fourth Edition of our Legal Project Management Quick Reference Guide.

September 19, 2018

What to Expect from Legal Project Management Coaching (Part 3 of 3)

By Jim Hassett and Tim Batdorf

What benefits should a lawyer expect from LPM coaching?

LPM coaching enables lawyers to efficiently review dozens of management tactics that have proven valuable for others, and coaching helps lawyers decide which LPM tactics will work best in their practice.

LPM was initially adopted by firms to protect profits in fixed-fee arrangements. But then firms saw its benefits in hourly rate matters, including increased client satisfaction and decreased write-offs, as well as more accurate budgeting and tracking. LPM has also allowed firms to take on more work without adding headcount or cost. A survey by American Lawyer Media Legal Intelligence found that firms that use legal project management also report more productive client relationships, improved communication, greater cost predictability, and other benefits.

A number of case studies can be found on our website that describe the results of firms that have participated in our coaching programs.  The table below lists specific examples from various coaching programs we have conducted.

LPM behavior change

Benefits

For every matter over $50K, the lawyer shared a description of project scope and assumptions with everyone on the project team

Team members became more familiar with what each budget included and excluded, which improved cost predictability and client satisfaction

Required lawyers to use a special task code to identify any work that was performed despite the fact that it was technically beyond scope

Kept lawyers more aware of the scope of the agreement and enabled relationship partner to negotiate increased fee with the client, where appropriate

A lawyer established a procedure to provide written summaries of strategic objectives to clients for their review at the beginning of every new matter; this was later adopted by his entire firm

Improved client satisfaction and led to more accurate budgets and increased realization

At the start of a large matter, one lawyer used our matter planning template to create a list of key sub-tasks and assignments, then asked team members to estimate how many hours each sub-task would take them

Team members completed most tasks within the time estimates they provided, which led to more accurate bids, increased realization, and new business

A litigator explained our risk analysis template to a key client and then used it to assess their budget in an early case assessment

The client loved the template and used it to structure their discussion of risks vs. costs. The result was increased client satisfaction and cost control.

The lawyer developed a new fixed fee product for consultations in a specialized area by working with a coach to identify all sub-tasks required and the range of possible time to complete each

Increased new business by offering a fixed price product in a specialized area before competitors did

One lawyer added a cover memo to monthly invoices with a bullet point summary of the progress of each matter on the invoice and the expected remaining costs

By explaining the rationale for each fee and what to expect, the lawyer avoided surprises and increased realization

A litigator developed a checklist of questions to ask at the beginning of each case to better define scope and assign lawyers to cases

More accurate bids, better team assignments, and lower costs to clients

A lawyer arranged to have the accounting department send “tickler” emails automatically when certain financial milestones were reached, such as when 50% of the budget was spent

Improved budget tracking led to cost control and avoided surprises to clients by enabling early discussions of possible scope changes

For a multi-million-dollar flat fee for handling a large number of litigation matters, the relationship partner designed spreadsheets showing cost-to-date and cost-to-estimated completion for each case. This made it easier to quickly spot where there were significant overages in attorney time spent above the flat fee for a given month.

Early identification of possible problems improved discussions of why any cost overruns may have occurred in a particular case and ways to control overruns in the future. Ultimately, this led to the fixed fee arrangement becoming more profitable.

An IP lawyer used our matter planning template to simplify the steps required to complete patent applications for a key client. The lawyer identified 12 steps that were required for every patent application and a likely range of hours for completing each step.

Team members were able to easily compare their effort on each phase against expectations and increase efficiency. This improved client satisfaction and increased new business.

At the end of a matter, the relationship partner conducted a short “lessons learned” review with the client

The discussion led not only to ideas for increasing efficiency, but also to being assigned similar matters in the future

Senior partner who had to approve write downs identified a few key partners with high write-down rates and interviewed them about the causes and possible cures

Each lawyer developed a personal action plan to reduce write-downs, and the firm improved realization

A practice group required team leaders to hold weekly internal team status meetings for each matter over $100,000

Avoided duplication of effort and led to early identification of issues that could increase scope

In today’s increasingly competitive environment, most lawyers can expect LPM to continue to change the way they practice law long after the coaching ends. In other words, lawyers should NOT expect to be finished with LPM when this brief program is completed. Our goal is to help lawyers get started on a long-term process that will continue to evolve and strengthen their competitive position for years to come.

Some of this material has been adapted from the Fourth Edition of our Legal Project Management Quick Reference Guide.

September 05, 2018

What to Expect from Legal Project Management Coaching (Part 2 of 3)

By Jim Hassett and Tim Batdorf

 

How does a firm identify the best lawyers for LPM coaching?

We recommend starting with the motivated: lawyers who are open to new ideas and who have the most to gain. They could be key partners who are responsible for new alternative fee arrangements. Or they might be relationship partners who are worried about protecting business with clients who are looking for greater efficiency. Or maybe an entire practice group is considering new checklists, templates, and processes to improve its competitive position.

The exact individuals and groups will vary from firm to firm. But in every case, the best pilot group consists of those lawyers who are open-minded about change and efficiency, in a position to benefit when it works, and influential enough to quickly spread the word of their success. 

Here are three questions you might consider asking your lawyers to determine the best candidates for LPM coaching:

  1. Are you willing and able to commit one to two hours per week to participate in a coaching program?
  2. Have your clients or prospects asked for greater efficiency or for LPM?
  3. Have you used any flat fee or other alternative fee arrangements, or been asked for greater efficiency on hourly matters, or had clients refuse to pay a bill?

 

How much time does LPM coaching take?

The answer depends on the lawyer. Our program generally requires eight 30-minute calls. Most lawyers spend at least another hour or two after each call following up on their action items. Note that if a lawyer chooses to work on an active matter, that time may be billable, since they will be performing tasks required by the matter, just in a different, more efficient way.

Among other things, we ask lawyers to think about, and sometimes change, how they define objectives and determine the scope of a matter, how they plan matters to be more efficient, and how they organize their communications to better communicate with clients. The suggestions we make are based on best practices that other lawyers have used successfully.

As Aristotle famously said, “You get out what you put in.”  The more time a lawyer dedicates to coaching, the more benefits they will see as a result.

 

What topics will be covered?

Once again, the answer depends on the lawyer. Our coaching is organized around eight key LPM issues listed in the table below. Note that while many lawyers think of LPM as a way to organize schedules and budgets, our view is much broader. In a study of AmLaw 200 managing partners and law firm leaders, we found that the two most important issues for most firms were improving how the scope of matters were defined and communicating better with clients.  The amount of time a lawyer spends on each of the eight issues will be totally customized, so each lawyer can focus on the issues that will have the greatest impact for their practice.

 

What happens on the first LPM coaching call?

Before the first call, we provide each lawyer with a copy of the Legal Project Management Quick Reference Guide (4th Ed.). The only thing lawyers are required to do before the first call is to make sure they have their copy handy during the call.  However, lawyers receive more benefit from the first call if they spend a little time thinking about the following two questions (which we ask on the call):

  • What would have to happen for you to consider this coaching a success?
  • What client or matter should you focus on first?

After the lawyer considers these questions, we suggest that they take a little time to look through the table of contents of our book to see which tools and templates are most likely to help them.  The table below provides examples of typical action items for each of the eight key LPM issues.  Each lawyer then works with their coach to identity LPM action items that will create “quick wins” – immediate benefits to the lawyer’s practice.


Legal project management issue

Typical action item

Benefit

1. Set objectives and define scope

Improve an engagement letter

Avoid misunderstandings

2. Identify and schedule activities

Create a matter plan listing all key tasks

Maximize efficiency and organization

3. Assign tasks and manage the team

Improve delegation

Better manage valuable time

4. Plan and manage the budget

Improve budgets, including tracking and controlling spending

Increase realization

5. Assess risks to the budget and schedule

Complete a risk analysis template for a new matter

Prevent problems before they occur

6. Manage quality

Develop a formal process to assure quality while improving efficiency

No compromises on work quality

7. Manage client communication and expectations

Improve communication with clients through monthly reports or weekly calls

Avoid surprises and increase client satisfaction

8. Negotiate changes of scope

When assumptions change, negotiate fee adjustments at an appropriate time

Protect profitability

Some of this material has been adapted from the Fourth Edition of our Legal Project Management Quick Reference Guide.

August 22, 2018

What to Expect from Legal Project Management Coaching (Part 1 of 3)

By Jim Hassett and Tim Batdorf

As explained in our white paper, The Keys to Legal Project Management Success, the five most effective ways to increase legal project management (LPM) results are to: (1) focus on changing behavior and solving problems, (2) aim for quick wins to create internal champions, (3) publicize successes within the firm, (4) use just-in-time training materials, and (5) take action now and follow up relentlessly. 

In over a decade of research and consulting with hundreds of law firms, we’ve seen that one-to-one LPM coaching is the most effective way to change behavior and achieve quick wins. 

There are a number of ways that LPM coaching programs can be structured by internal staff or external consultants.  Our own approach has evolved over the last ten years, as we found that some tactics worked better than others.  This series of posts explains how our approach works, what lawyers can expect if they sign up, and actual successes that typical participants have achieved.

 

What is the goal of LPM coaching?

Project management has been used for decades in fields like engineering, construction, information technology, and aerospace.  It is only in the last ten years that lawyers have begun to apply these systematic and disciplined tactics to the unique challenges of the profession, and best practices have begun to emerge.  A primary goal of LPM coaching is to help lawyers apply the latest findings about best practices, so they don’t have to “reinvent the wheel.”

From the start, the primary goal of our coaching programs has been to help lawyers apply LPM quickly to find “low hanging fruit” and directly experience such immediate benefits as: 

  • Increasing realization and profitability
  • Reducing risk
  • Protecting current business
  • Increasing new business

We have repeatedly seen that once individual lawyers achieve success, they become internal champions who help spread LPM best practices to others within their firm.  (Our web page includes several case studies showing how this has worked at a number of firms.)

 

How does our LPM coaching work?

A certified LegalBizDev coach provides one-to-one advice on the best ways to apply LPM over a period of several months. LPM coaching is not a “one-size-fits-all” approach. What works best for one practice team or one individual lawyer might not be best for another practice team or individual. Therefore, the precise content and approach of coaching is customized to each lawyer’s needs and personality. But for every lawyer, each call provides an opportunity to brainstorm with an LPM expert.  And the very fact that a lawyer has a call scheduled helps that individual find the time for LPM in an otherwise busy schedule.

The program typically includes unlimited phone calls and emails for two months from the date of the lawyer’s first call. Most lawyers schedule a 30-minute phone call at the same time every week, such as every Tuesday at 10 AM.  If the lawyer is unable to complete at least eight calls within two months, the program is extended for up to two additional months or until eight calls have been completed, whichever comes first.

Most lawyers begin the coaching process by selecting an active client or matter, then identifying which of eight key LPM issues are most critical to meet their goals. Each participant receives a copy our Legal Project Management Quick Reference Guide (4th Ed.), which is a toolbox of templates and best practices. During the coaching program, the LPM coach helps the lawyer quickly select the tools that are most likely to result in immediate benefits for their immediate situation. During the coaching, the lawyer also becomes aware of all the other LPM tools that may be helpful to them in the future, and when to use those tools.

A few lawyers prefer to start the coaching program by analyzing a past matter that went over budget to better understand how LPM could prevent that problem in the future.  Some use the coaching program as a CLE-type course to understand the big picture of LPM.  Although these theoretical approaches offer value, we prefer to engage lawyers in an active matter so that LPM is immediately real and relevant to their practice.  But the bottom line is that our approach is entirely customized, and whatever works best for the lawyer works for us.

 

Is LPM coaching just for lawyers?

To maximize the benefits of LPM coaching, we believe it is best if lawyers participate in our LPM coaching program.  However, we have coached paralegals, legal assistants, project management professionals, and LPM staff members with success.  The reason we recommend coaching lawyers is obvious to anyone who has ever worked in a law firm:  lawyers are in charge, and if they don’t buy into LPM, it simply will not be applied as effectively.  We have found it can be unproductive and frustrating for a legal assistant to learn new LPM concepts, and then be limited in his or her ability to implement that new knowledge because they lack the authority to introduce important changes into the LPM process. 

In addition, lawyers are principally involved in many of the key LPM issues.  Lawyers work with clients to set objectives and define scope and negotiate changes of scope.  The same holds true for other key LPM issues such as managing client communications, assigning tasks, managing the team, assessing risks, and managing quality. 

While many lawyers would prefer not to set aside time for coaching, as we often say, “You can’t pay someone else to do your pushups.”  It is the lawyer who must learn LPM concepts if LPM is to be fully implemented in ongoing client matters. 

Some of this material has been adapted from the Fourth Edition of our Legal Project Management Quick Reference Guide

 

August 08, 2018

AFA pricing best practices

By Jonathan Groner

At the recent conference of the Corporate Legal Operations Consortium (CLOC), Matthew Beekhuizen, chief pricing officer of Greenberg Traurig, was a member of a panel titled “How to Build an AFA Program: Best Practices in Design, Implementation, and Management.”  Beekhuizen recently discussed the panel and various aspects of pricing and alternative fee arrangements with us in the following interview.

LegalBizDev: Based on your personal experience, what approach do you take in dealing with pricing issues?

Beekhuizen: Earlier in my career, I worked in commercial banking, and I became accustomed to analyzing financial statements and profit and loss statements, particularly for the purpose of assessing the amount of risk for commercial loans. That work was highly data-based, and I still use a data perspective in developing prices in my present position.

I use data as a starting point. For example, in developing a budget for a piece of litigation, we look first at the costs of various tasks, such as depositions, motions to dismiss, etc., in similar matters. We also ask: What is the possible range of costs? This historical data paints a picture, and then I sit down with the attorneys on the matter and I ask them how the present case is different, if at all, from previous cases that were similar. We can go from there.

LegalBizDev: Are firms like yours becoming more data-driven?

Beekhuizen: Yes, firms are much savvier now, for example, about why and how they should use task codes to capture data in a meaningful way. In addition to the well-known ABA litigation codes that have existed since the 1990s, many firms are developing their own coding systems for all types of matters, not just litigation. And Hilarie Bass (current ABA president and a co-president of Greenberg Traurig) has initiated an ABA working group with the goal of creating broader code sets for a variety of practice types, as well as revisions of the litigation code set, aimed at capturing better data and being more useful in AFAs.

LegalBizDev: What is the relationship between task codes and AFAs?

Beekhuizen: The array of data that can be gathered from completed matters by the use of task codes helps a firm develop detailed projections of the cost of an upcoming matter. These projections can then be used to develop a fee proposal that the firm, with a greater degree of confidence, expects will be a valuable arrangement for the client and the firm.  The use of task codes also enhances legal project management efforts once the matter is under way, so firms can monitor what work has been done, by whom and when in comparison to the fee agreement.

One type of AFA that firms are using more frequently when they are truly data-driven, is task-based pricing. An example of this type of pricing would be that the firm and the client agree on a certain price per deposition, regardless of the number of depositions, or on a certain price for the review of, say, each set of 5,000 documents.

LegalBizDev: What is the relationship between legal project management and AFAs?

Beekhuizen: AFAs can really set the stage for legal project management. Say the work is being done for a fixed fee, which is a common type of AFA. That means that when the firm agreed on the fee with the client, the firm had based the arrangement upon specific staffing (how many people would be used for each aspect of the matter, where they are based, experience level) and expected scope (activity such as number of depositions, number of documents to review, etc.).  The firm needs to staff the matter in the way it had planned and monitor that the work is within scope. So the fee agreement becomes, or should become, a work plan to which the firm must manage. That requires regular reporting and assessing of where things stand, which of course involves project management. Project management becomes indispensable in making AFAs work well.

LegalBizDev: What is the relationship between the growth of legal operations within client corporations and AFAs?

Beekhuizen: Because of the growth of legal ops, more sophisticated clients have set benchmarks for what they want to pay for certain specific legal services, just the same way as firms’ use of data has helped firms come up with benchmarks for the prices that offer the most value to all involved. This is actually very good because it makes the relationship and the negotiation between the law firm and the client more transparent in many ways. Now, if the client and the firm have different expectations about the potential costs for a matter, both can review the data behind the expected cost. This helps firms have a more substantial and fact-based discussion with clients about price. When our clients are trying to implement AFAs for the first time, I always tell them to start with data. Having a legal operations professional on the client side helps with this process.

As legal operations continues to grow by leaps and bounds, as it has, we will be seeing a lot more data-driven requests from clients, and I think that’s a great development.

LegalBizDev: Do you deal with aspects of pricing that are not necessarily reducible to data?

Beekhuizen: Yes. Pricing is both a science and an art, and it ultimately is all about understanding your clients’ needs. Sometimes you may come up with an initial cost estimate that you know is beyond what the client is expecting. For example, a price estimate may represent what the firm believes will be required to win a certain litigation, but that cost is greater than the client’s monetary exposure. At that point, you can explore other alternatives that reduce the cost and create value for the client.

In another situation, the client may want to develop a fee arrangement that has the law firm sharing risk with the client, so that the law firm incentives and client objectives are aligned.

In yet another situation, the value for the client is not so much in cost reduction as in predictability of its legal expenses over a period of time.

In all these instances, our job is to develop an understanding of what the client is really trying to achieve. AFAs and data-driven analysis set the stage for the most important part – talking to the client about what they expect and what they consider value.

July 25, 2018

Keeping litigation costs down and clients happy

 

By Jonathan Groner

At the recent conference of the Corporate Legal Operations Consortium (CLOC) one panel was titled “When the Red Phone Rings: Managing Litigation to Keep Costs Down and Clients Happy, From Crisis to Completion.”  We recently discussed their conclusions and more in this interview with panelist Jason Osnes, Director of Strategic Finance and Project Management at Dorsey & Whitney LLP.    

 

LegalBizDev: Do you believe that the growing emphasis on legal operations, on the client side, and the focus on Legal Project Management (LPM), on the law firm side, go well together?

Osnes: Definitely. Our clients are looking for efficiency and predictability, and LPM helps to achieve that. At CLOC they say their goals are to be “efficient, innovative and aligned,” and these represent very similar objectives to what we are striving for with LPM. In fact, when we see this quest for efficiency occurring with such frequency on the client side, it helps me internally to legitimize what we are trying to do here with LPM.

LegalBizDev: You presented at CLOC on a panel with an associate from your firm and two people from a client, one lawyer and one legal operations person. In addition to you, the panelists were Ben Kappelman of Dorsey & Whitney; Paul Dieseth, Vice President, Associate General Counsel, U.S. Bank; and Matt Wahlquist, VP, Head of Outside Counsel Management, Pricing, and Analytics, U.S. Bank. Tell us a little about how that discussion went.

Osnes:  We explained how we work together from the initiation of a legal matter to its end. We discussed how our roles overlap and how we all attempt to increase efficiency and predictability in the spirit that CLOC promotes. The process can sometimes begin with the client, who may request a budget for a matter, and then the Dorsey & Whitney attorney will work with the LPM department to develop a litigation plan and scope the matter out in a way that meets the client’s objectives. Sometimes the lawyer at Dorsey & Whitney moves proactively to develop a budget and wants tools for that purpose, both from my department and from the client. The primary takeaway from our presentation was that true client collaboration involves a lot of proactive communication between attorneys and operations, at the firm and the client, throughout the entire matter lifecycle.

LegalBizDev: What effect do you think the rise of legal operations will have on the importance of LPM and on client development?

Osnes: Legal operations and LPM began as functions to facilitate administrative tasks, but both have grown beyond that to play a key role in improving the relationship between law firm and client. I believe that the demand on the part of clients for law firms with a real LPM capacity will only increase, and that means LPM can become a differentiator for law firms. I’m talking about firms that really do LPM, not those that just check the box that says they do it.

LegalBizDev: Many things can occur in litigation that are not predictable from the outset. Can clients and law firms, each armed with their new management tools, work together to reduce uncertainty?

Osnes: Yes. Just because something is unpredictable, that doesn’t mean you have to throw up your hands. If you as a law firm attorney talk to the client as early as possible, you can develop a solid baseline to manage a case, which ensures everyone is on the same page from the beginning. You may only be able to budget from the outset through a certain phase, rather than all the way through a possible trial, but it’s important to just develop, far in advance, a set of expectations that both sides will be comfortable with. Then, you need to be disciplined in tracking and communicating changes from that baseline when they inevitably occur.

The key is to explain this to the client from the outset. Another key is to remember that pricing and budgeting are something that you do with a client and not to a client.

LegalBizDev: How might this work in practice as a legal matter proceeds?

Osnes: If both the law firm and the client are working with a budget and using it as a management tool, they can almost instantly talk about new cost issues as they come up. They can ask: How will this development, say the need for the law firm to do a task that was originally out of scope, affect the budget? Attorneys on both sides now know this is out of scope or wasn’t contemplated in the budget and can talk readily about how this unexpected event can be handled in terms of the existing budget, or whether changes need to be made.

LegalBizDev: What role do outside litigation vendors play in this process?

Osnes: Some clients have preferred vendors that they use for e-discovery and other important litigation tasks. That is often part of their commitment to improving efficiency through “legal ops.” In our planning and budgeting process, we need to be aware of those. At the conclusion of a matter, when we and the client are evaluating what worked well and what didn’t, we need to look at the work of those vendors as part of the evaluation. Also, we at Dorsey & Whitney have our own in-house e-discovery and document review service called LegalMineTM, and if that team is part of the litigation, we and the client need to evaluate its performance after the case is over, as well.

LegalBizDev: Has anything changed in the way in which your pricing and LPM group presents itself internally to the firm’s attorneys?

Osnes: In the past, we have always described ourselves as a resource for our internal clients, Dorsey & Whitney lawyers. Now that the firm’s clients are asking for so much more, we also emphasize how our LPM team can improve client service, help lawyers meet each client’s expectations, and keep client relationships healthy and strong.

 

July 12, 2018

Leading study confirms that ongoing LPM training and support significantly improves performance

By Tim Batdorf and Jim Hassett

If you work at a law firm and care about its future, you must find the time to download Altman Weil’s free report of findings from its 2018 Law Firms in Transition survey.

For the last ten years, this survey “has tracked a continual shift in awareness, acceptance – and some persistent resistance to – legal market change” (p. i). This year’s report by Thomas S. Clay and Eric A. Seeger provides the best available data on law firm efficiency, profitability, pricing, staffing, productivity, and much more. 

To collect the data, Altman Weil sent questionnaires to 801 managing partners and chairs at US firms with 50 lawyers or more.  In other professions, questionnaire surveys like this typically “average [a] 10-15% response rate.”  One might assume that the response rate for a survey sent to law firm managing partners and chairs would be much lower, since they are often too busy to respond to anything that is not on fire.  But Altman Weil received an astonishing 49.7% response rate (398 firms).

The resulting report summarizes the experience and opinions of managing partners and chairs from nearly half of the 500 largest firms in the United States.  It provides information about what law firms have tried, what’s worked, and what hasn’t.  There is simply no better source for this type of up-to-the-minute insight into a rapidly changing profession. 

The findings that caught our eyes first, not surprisingly, were the ones most closely related to our interest in legal project management (LPM), starting with the fact that “Nearly unanimously, law firm leaders see a need to focus on improved practice efficiency” (p. xii).

So, what are law firms doing to meet this need?  Not nearly enough.

One survey question asked, “How serious are law firms about changing their legal service delivery model to provide greater value to clients?” on a scale from 0 (not at all serious) to 10 (doing all they can).  Less than half of firms (43%) gave themselves a rating of 6 or higher, and only 2.6% answered 9 or 10

But wait, it gets even worse.  In its most recent 2017 Chief Legal Officers survey,  Altman Weil asked the exact same question of clients.  Only 9% of clients (vs 43% of firms) rated this commitment at 6 or higher, and not one single client gave law firms a 9 or a 10.  Obviously, a huge discrepancy exists in how law firms perceive themselves vs how clients perceive law firms. Viewing these results optimistically, law firms that are committed to changing their legal service delivery model could have a significant business opportunity. 

From our perspective, the single most important graph in the 2018 Law Firms in Transition report (p. 55) is reproduced below:LFiT_EfficiencyTactics_2018B“Rewarding efficiency and profitability in compensation decisions” was the most effective tactic for improving performance, as almost anyone could have predicted.  You get what you pay for. 

Much to our surprise, however, more than half of law firms say they are already using this tactic.  Of course, the other law firms may not want to engage in the difficult process of re-evaluating compensation policies, particularly when they know how difficult those conversations can be.  And if this is the only tactic a law firm takes, it could derail significant progress for several months, if not years.  Unfortunately, in today’s market, time may not be a luxury that law firms can afford.

In addition, law firms have historically had trouble measuring and rewarding profitability.  A few years ago, when we interviewed AmLaw 200 managing partners and senior executives for our book Client Value and Law Firm Profitability, we reported that many firms are struggling with measurement, like the participant who admitted:

We don’t calculate profitability by formula.  It’s really seat of the pants. (p. 52)

As more and more firms improve the ways they measure and reward profitability, we predict that the impact of compensation on performance will increase far beyond the 47% figure in the graph above.  But again, this type of approach will likely take a few more years to fully materialize in many firms and is definitely not a “magic bullet” solution for any firm.

So, what exactly should law firms be doing now to help lawyers increase efficiency?  They should engage in “ongoing project management training and support,” because:

  • It is the highest-rated tactic for obtaining significant improvement in performance (other than changing compensation policies, as discussed above),
  • It is grossly underutilized with only one-third of law firms actually using this tactic, and
  • It is the easiest and most cost-effective way to significantly improve performance, especially when compared to other less effective tactics like systematically reengineering work processes or using technology tools to replace human resources.

Whatever tactics law firms decide to pursue, Altman Weil’s report (p. viii) concludes that law firm leaders must “pick up the pace:”

The challenge for leaders is to enlist a small cohort to start the innovation process with urgency and pace and begin to educate and bring others into the fold as rapidly as possible.  Leaders should focus daily on supporting the continued efforts of early adopters by providing encouragement, resources, time, and staff support.

We couldn’t agree more. 

For details of exactly how several leading firms have engaged this process, and the successes they have achieved to date, see the case studies section of our web page.

Full disclosure:  Altman Weil is a strategic partner of LegalBizDev, but not a single word of this post would be different if they weren’t.

 

June 27, 2018

How CLOC is helping law firms to improve efficiency (Part 3 of 3)

While the CLOC LPM initiative described in Part 2 of this series was aimed at LPM novices, other CLOC initiatives are aimed at those who already accept the need for LPM and are digging into the details of how to implement it. 

For example, the Patent Prosecution Initiative was designed to establish “a common language and framework” for in-house legal departments to use when defining scope for patent prosecution work. This initiative aims to:

  • Speed up the process
  • Reduce misunderstandings and miscommunications in defining scope
  • Design fee schedules, and
  • Help manage budgets

According to a May 2017 article in Corporate Counsel, this document grew out of the work of May O’Carroll as head of the Legal Operations, Technology and Strategy team at Google, and it incorporated contributions from more than 60 companies, law firms and other third parties.

The CLOC (Corporate Legal Operations Consortium) Patent Prosecution Deliverable Framework can easily be downloaded from CLOC’s webpage. It lists 21 core deliverables, from the “Pre-filing Assessment” to “Issuance” and “Appeal.”  Each is described in detail, along with “add-on options” and suggested UTBMS task codes.

According to Doug Luftman, currently General Counsel at Nomis:

This approach will provide us all with a way to more effectively manage our budgets. We also will be able to more successfully track how efficient projects are. Further, we will be able to more easily develop new benchmarks (so that we are comparing apples to apples) and gain a better understanding into how we are all performing.

In an interview for this post, James Hannigan, formerly a Project Manager at Fenwick & West and a member of CLOC’s core working group for this initiative, argued that if companies begin to adopt this new standard, they will increasingly demand that law firms also adopt project management techniques when they perform work:

Clients will have access to more precise data, which will compel the firms to manage the budget more effectively.  Project management will be easier to implement because the data is available to properly do it

According to Aileen Leventon, Principal of Edge International, this and other CLOC initiatives can help law firms take a more sophisticated approach with their clients. 

Law firms tend to look at clients as a monolith, whether it’s a single point of contact or a full law department.  But CLOC takes a supply chain approach, identifying and improving the various handoffs that go on between an internal business client and the law department, within the law department, and with outside counsel.

To the extent that CLOC’s approach is embraced by in-house counsel, Leventon believes it will have a significant impact on law firms for many reasons, including:

  • Law firms will have to accelerate their use of LPM.
  • Law firms that have embraced LPM will need to become familiar with the CLOC framework.
  • In-house counsel will become more efficient in serving their internal clients.
  • In-house counsel will be better prepared to define a successful outcome, which will result in better formulations for setting objectives and defining scope.
  • Budgeting and changes in assumptions will be easier to articulate with a systematic process that in-house lawyers better understand.

On the last day of the first CLOC conference (held in 2016), a panel discussion examined the issue of “why law firms are not responding faster and more fully to their clients’ needs and demands for improved legal service at more reasonable fees.” According to panelist Ralph Baxter, former Chairman and CEO of Orrick and currently Chairman of the Advisory Board of the Thomson Reuters Legal Executive Institute, the panel discussed:

How clients can achieve the change they need from their law firms instead of in spite of them. . .. The pace of change is painfully slow [because many law firms] lack the motivation and resolve to [change].

Baxter went on to describe how CLOC’s influence is being noticed within the legal industry: 

CLOC is quickly becoming one of the most influential players in legal service delivery… CLOC members have an unprecedented opportunity to accelerate change… They have the mandate, they have the motivation and they have the buyers’ power.  And, thanks to CLOC, they are organized.  

While law firms have made substantial progress in the two years since Baxter wrote these words, there is still a very long way to go. 

So, if you are committed to meeting client needs through LPM and increased efficiency, and you don’t yet know much about CLOC, it’s time to learn more.

June 13, 2018

How CLOC is helping law firms to improve efficiency (Part 2 of 3)

According to a 2017 Inside Counsel article about CLOC:

[One] big challenge around project management in law departments is that legal teams didn’t understand it or what was being asked of them. So, a team of over 20 industry professionals… created an executive summary to educate legal leadership teams of what legal project management is, what the benefits are and how they can get started. The CLOC LPM Initiative team also created a playbook that includes a simple checklist for each matter stage and templates that can be used and configured by legal teams to easily apply project management in their delivery.

Aileen Leventon, Principal at Edge International, led the group that prepared the resulting 14-page paper, LPM for Legal Teams.  It begins with CLOC’s definition of LPM, built around four major stages – intake, planning, execution, and review – and is summarized in this diagram:

Communication_Pic2




Naturally, CLOC looks at LPM from the client’s point of view. Their paper provides details for each stage, listing activities, results, and success criteria. It also provides templates such as:

  • Matter Complexity Guidelines
  • Request for Legal Service Checklist
  • LPM External Briefing Checklist
  • Monthly Matter Status Report
  • Post-Matter Review Form

Some of these tools can be used as-is by law firms; others provide useful insights into the way sophisticated clients look at LPM.  (While the paper itself can be downloaded for free by anyone, the internal links to templates are available only to CLOC members.  However, joining CLOC is easy and relatively inexpensive.) 

You don’t need to be a CLOC member to download another useful document which was created as part of this initiative:  A 16 slide PowerPoint presentation entitled:  LPM – The Business Case and Action Plan for Legal Departments.

Again, as suggested by the title, this presentation is aimed at in-house law department staff, but many of the concepts apply to law firms as well.  One of the most interesting slides addresses the myth that project managers “spend lots of time documenting and updating project plans.”  In reality:

LPM is 90% about communication and speaking the client’s language:

  • Defining and managing the scope of the work
  • Making sure all those who need to be involved are in the loop
  • Making sure that risks are addressed on time by the right people
  • Providing status updates
  • Facilitating meetings and discussions
  • Communicating meeting minutes and action items.

The emphasis on communication is completely consistent with our experience coaching lawyers in LPM for more than a decade.  For example, when Bilzin Sumberg COO Michelle Weber was interviewed for our white paper, A Model for LPM Success: The Case of Bilzin Sumberg, she said: “If I were to distill [our LPM] program into one highlight, one thing that everyone learned and changed, it was improved communication. It sounds so simple but improving communication with clients and within the firm is very hard.”

Finally, for people who need to make the case for LPM – whether in a law department or a law firm – the slide “What is driving the need for LPM?” (reproduced below) may be especially useful:

What is driving the need for Legal Project Management?

  Table_Pic3