April 23, 2014

The most critical issues in legal project management (Part 1 of 3)

This three-part series previews results from my book Client Value and Law Firm Profitability, which will be published this summer.  All quotes are from managing partners, chairs, and other senior decision makers at AmLaw 200 firms.  Each participated in 30-minute in-depth interviews and spoke freely based on the understanding that they could review their quotes before publication, and they would not be quoted by name.

In 2009, when many firms first started talking about how to apply traditional project management techniques to legal matters, we proposed that lawyers think about the field in terms of these eight key issues:

  1. Set objectives and define scope
  2. Identify and schedule activities
  3. Assign tasks and manage the team
  4. Plan and manage the budget
  5. Assess risks
  6. Manage quality
  7. Manage client communication
  8. Negotiate changes of scope

When we coach lawyers on LPM, we always start by asking which issue is most important to a particular client or matter, so that we can focus on the low hanging fruit. Not surprisingly, the answer depends on the situation, and each of the eight has sometimes been rated as most important. However, in this research we wanted to get a sense of which issues seemed most important to the profession as a whole, and so one of the questions we asked was, “Which of these eight LPM issues do you consider most critical for client value and/or profitability in the short-term and why?” Of the 37 people who answered that question, 8% said that they were all basically equal:

It’s very difficult to rank order them. They are all important. There may be subtle variations, but these all work together, and I really can’t differentiate in terms of which is most important and which is least important and what’s in the middle. They all have to come together.

However, 92% were willing to single out one or more issues as particularly critical, as in the following quotes, the first from a managing partner, the second from a C-Level executive:

There are two that I would rank the most critical: the setting of objectives and scope, and managing client communication and expectations. Those, to me, are linked at the hip. You really have to understand what the client’s expectation is, and you also have to have a good relationship to be able to tell them whether or not their expectation is real and achievable. A lot of things can happen in litigation that can change the scope of an engagement. You can run into difficult parties and unforeseen problems, and that’s where an understanding between you and the client has to be solid enough that you can have those kinds of conversations and work your way through it.

There are three things I don’t think we do very well. The first thing is negotiating changes of scope up front. The second is clearly setting and understanding the objectives and the scope from the beginning. Lawyers think they do it, but I don’t think they get the right level of detail. The third is assessing risks to budget and schedule. They don’t wear the project management hat and think through what might go wrong.

When we analyzed the answers from people who saw some issues as more critical than others, they were ranked in the following order:

Most critical short-term issues in LPM
Set objectives and define scope 50%
Manage client communications and expectations 38%
Plan and manage the budget 28%
Assign tasks and manage the team 22%
Negotiate changes of scope 20%
Identify and schedule activities 12%
Assess risks to the budget and schedule 10%
Manage quality 10%

The top two – defining scope and communicating with the client – are especially interesting because they have nothing to do with software or Gantt charts or anything a relationship partner should delegate to an outside project manager. Instead, they come down to understanding what clients want, and giving it to them.

In this three part series of posts, we will briefly discuss each issue, arranged in this order of importance.

Set objectives and define scope

The short-term issue that was mentioned most often as critical starts on the very first day of each new matter, or before:

Setting objectives and defining the scope are crucial. You can budget. You can do anything you want. But if you don’t know what those objectives are, and what the client is willing to do or wants to do, you’re just putting stuff on paper. – Senior partner

Defining scope is the most critical in my mind. That’s where we struggle the most on the front end. – COO

The critical issue is sitting down with the client at the beginning and deciding what their goals are with the matter. Is it getting it done quickly? Is it getting it done so that nobody ever brings a matter like this again? Is it getting it done in advance of the big merger on the books a year from now? There are all different considerations as to what will lead a client to think this was a successful representation. And I find that the more you push your client to think through what they care most about, the better off both of you are. – Managing partner

Obviously clients have got to know what they’re paying for. How many times in a litigation matter do the clients say, let’s beat the guy, and then after you spent the money, they have buyers’ remorse? – CFO

I think the lawyer really has to understand what the client’s objective is, and manage to that objective, which is a hard thing for a lot of litigators to learn, in particular those who are from the win-at-all-costs school. – Chair

However, defining scope properly can be quite difficult. As I noted in our Legal Project Management Quick Reference Guide (3rd ed., p. 20), lawyers who are trained to prepare for every possibility can get in trouble if they try to be too specific:

If a list of carve-outs gets too long or too specific, it can annoy the client and lead to lost business. Unfortunately, there is no simple general way to create assumptions that balance client needs and firm needs. The details must be worked out case by case. This can be especially difficult in a highly competitive environment.

One way to deal with this challenge can be seen in the following comments from a C-level executive:

I counsel people against a three-page list of assumptions, because it just drives clients crazy. I tell them to pick the big ones, and I say, “If you’re assuming very limited document review under 300,000 documents, and then it comes in that you’re going to have to review two million, you’ve got to be able to identify that that’s a huge variable and cost driver, and you’d better make sure that you’ve been very clear in your assumptions, so that if that happens, you can quickly pick up the phone and say, ‘We’ve got a major change in scope. Let’s talk about how to deal with it.’”

Another major complicating factor in defining scope is that with large clients, different stakeholders may have different objectives:

There is sometimes less than optimal communication within some of our client organizations, between the legal department and the corporate higher ups, as to objectives, priorities, timing, and budgets. We often receive our work directly from the legal department. The legal department at times may not quite understand what top management wants done, at what cost and in what timeframe, and that leads to inefficiency.

There’s no question that this is an art that needs to be developed further. We find sometimes with clients that the people we work out the sale with aren’t the same people that we work out the delivery with, so whether the scope has been properly defined or not becomes a really big deal, and changes in scope needing to be negotiated depends upon how well you defined the scope in the first place. This is something law firms have not historically done well, compared to, say, contractors and others who are used to a fixed fee type environment. So there’s a lot of room for improvement on that.

Finally, it is worth noting that the emphasis on scope does not apply to all clients and all law firms. In the statement below, one AmLaw 200 chairperson argues that it applies to only a small percentage of his firm’s clients:

In a world where your client is cooperative and just as accountable as you are, then I would say that setting objectives and defining scope would be the most important. We just haven’t found clients to buy into that, for the most part. For our firm, about two-thirds of clients use the word value just as a polite way of asking for a discount. Right off the bat, those two-thirds are not interested in setting objectives and defining scope. They’re just interested in price. Another sixth of my practice has no need for this at all, because they’re completely price insensitive. They just want really good work. They trust us. So it’s only that last sixth that actually cares about scope.

In Parts 2 and 3 of this series, we will discuss the remaining seven issues.

 

April 22, 2014

Announcing a new workshop on how to define scope

Today, we are announcing a new half-day legal project management workshop entitled “How to Define Scope and Negotiate Changes.”

This workshop will substantially expand on a key portion of the content covered in our more basic course “How to increase client satisfaction and profitability with Legal Project Management,” which LegalBizDev has successfully offered since 2010.    It has been added to our curriculum in response to client needs highlighted in our research for the book Client Value and Law Firm Profitability, as explained in the post above.

The skills taught in this workshop are especially critical for fixed fee work. They also apply to any hourly arrangement that has a capped fee or a well-defined budget. 

For more information, including a two page summary of proprietary details of how the course is structured, email us at [email protected] or call 617-217-2578.



April 17, 2014

Experts from five firms discuss how to implement legal project management

On May 22 in Chicago, five law firms that have made significant progress in LPM will frankly discuss what has worked and what hasn’t at the fourth session of the Ark Group’s most frequently repeated event - Legal Project Management Showcase & Workshop: Changing Behavior within the Firm.  I look forward to chairing this session so I learn what these experts have to say: 

Sari M. Alamuddin, Partner, Morgan Lewis
Vincent Cordo, Global Director of Client Value, Reed Smith
Stuart J T Dodds, Director of Global Pricing and Legal Project Management, Baker & McKenzie
David Schaefer, Deputy Chair, Loeb & Loeb
Donald R. Ware, Partner, Foley Hoag

After previous sessions of this program, audience members said:

"This workshop did an excellent job of offering practical suggestions for dealing with the issues law firms encounter when they implement legal project management.  The frank discussions between partners and executives at firms that have successfully changed lawyers’ behavior would be helpful to anyone who is trying to get their arms around this challenging transition." - Delilah Flaum, the Partner in Charge of Knowledge Management and Legal Project Management at Winston & Strawn LLP

"The greatest benefit of the workshop was hearing from others about what they are doing and how they are responding to the same market challenges that we are facing.  Brainstorming solutions together was useful because it helped me to walk away with some ideas that could be adapted for our firm." - Christine Johnson, Director of Client Matter Management at Quarles & Brady LLP

Implementing LPM successfully is more critical than ever.  For years, clients have been asking firms to apply LPM to produce more predictable costs, and lower costs.  (For example, see my recent post about two client surveys.)

But many firms that have invested heavily in LPM awareness training have been disappointed by the results.  Here’s what the managing partner of one AmLaw 200 firm I interviewed for my new book Client Value and Law Firm Profitability had to say:

I think project management probably will have the longest-term positive impact [on value and profitability], but it’s been the biggest challenge, because it’s something that hasn’t been easily absorbed by a lot of the lawyers. When busy lawyers start scrambling around, the inefficiency creeps right up. At our firm, project management has not met expectations.

Many firms have learned the hard way that while it is easy to teach lawyers about LPM, it is very hard to change their behavior.  On May 22 in Chicago, five experts in implementing LPM will discuss how they have succeeded.  At the end of the day, they will lead interactive small group discussions on:  “How to Identify the Most Effective Action Items for Your Firm.”

For more details, download the brochure, see the Ark Group’s web page or contact Ark’s Peter Franken at [email protected] or (312) 212-1301.  For a special 15% discount, just write “LegalBizDev Discount” on your order form and subtract 15%, or ask for the discount when you order by phone. 

 

April 16, 2014

Research update: New staff positions in pricing, value, and LPM, Part 2 of 2

Using existing staff to perform these functions

Some firms have adopted a different approach, preferring to utilize the skills of people already on their staff to run project management and pricing:

Pricing has become a big part of our portfolio, but it’s done by an MBA who has been here for a long time, who studies pricing and speaks about it.

For some time, we’ve had a group within the firm that we refer to as our practice economics group. They have been tasked with serving as a resource to practices, client teams, relationship lawyers, and the like, to help with the kind of analysis that is important at the front end, figuring out how to respond to an RFP or to price a project. But as time has gone on, the services that the group provides have expanded to include various types of knowledge management and process management efforts as well. They can help design reporting systems, feedback loops, and the like, so that a team can stay current with real time data as the project proceeds, to know how they’re doing against a budget or a bid. We think that capacity has been extraordinarily valuable to us. More than 20% of our revenues at this point come from alternative fee arrangements, including some very large fixed fee engagements. Our comfort in moving more significantly into that arena, particularly taking on some of the engagements where clients have used fixed fees in conjunction with a very strong push to reduce costs, has been very much influenced by having not just the up-front analytical ability, but a team that can work with the client and engagement team to help successfully manage those types of projects.

We hired a new CFO within the past few years, with a focus on identifying someone who could really help us do this kind of stuff. So we haven’t really created a new position but we’ve begun to focus on that type of analysis.

Recognizing the need to do more in this area

Eighty-six percent of the firms that commented on this issue reported that they plan to do more in this area. The exact details vary from firm to firm:

We are thinking about making the process more formal, centralized around a pricing director. A lot of law firms, ours included, have administrators embedded in larger practices. But we need to recognize that if you have, say, a $200 million corporate practice by revenue, you should probably have someone acting like a CFO for a $200 million subsidiary of a $600 million enterprise. Therefore, you want someone who can help drive pricing, process efficiency, technology, and balance sheet management – the sorts of things that a CFO would do in a subsidiary in corporate America. I think that role needs to be morphed out of the general administrative function. The issue is that the skill sets are very different, and that leads to difficulty, because you’ve got long-tenured administrative staffs who have been very helpful over the years but who don’t necessarily have the skill set needed today. So then it can become a question of whether you add incremental cost to the enterprise to fill these new roles.

We haven’t added any new internal staff positions. What we’ve done in all of those areas is to have existing people engage as best they can on a catch-as-catch-can basis. The problem is time management and just getting it all done otherwise, but it is what it is.

I don’t think we’re where we want to be, because we’ve got to hire somebody. As much as I try to do it, I’m just too busy.

Clearly, this trend is growing and evolving quickly, especially in relation to pricing.

 

April 09, 2014

Research update: New staff positions in pricing, value, and LPM, Part 1 of 2

This two-part post previews results from my book Client Value and Law Firm Profitability, which will be published this summer.  All quotes are from managing partners, chairs, and other senior decision makers at AmLaw 200 firms.  Each participated in 30-minute in-depth interviews and spoke freely based on the understanding that they could review their quotes before publication, but they would not be quoted by name.

 

As law firms compete aggressively with their peers by offering more value to clients, many are establishing new staff positions to oversee pricing, legal project management, and other aspects of the “new normal.”  A few weeks ago, we reviewed the book Law Firm Pricing: Strategies, Roles, and Responsibilities about the rise in pricing directors.  In our research, we asked more generally about new staff positions in several related areas and found:

 

Do you have new internal staff positions in pricing, value, legal project management, and/or related areas?
Hired new people Used existing people No one devoted to these functions
49% 28% 23%

 

Hiring new staff members to meet new needs

Many firms reported it was a very successful move for them to hire people with the right business backgrounds and to empower them to use their skills to help the firm make crucial decisions on pricing and on efficiency. Consider this testimony from the managing partners of two AmLaw 100 firms:

I think what’s had the greatest positive effect is our business managers. They can much more impartially sit down and analyze profitability. They build up a database of what it costs us to do things, and they’re just invaluable. They work with enough lawyers, they’re able to focus on the numbers and their minds work differently. I think we’ve been very effective at actually developing tools to help people price things. It’s a pretty basic tool, but the lawyers say it is very sophisticated and very helpful. I see it as Finance 101, but I’m glad the lawyers like it. So I think what’s had the greatest effect is the non-lawyers who really are focusing on the business side of the equation and what it costs to do things; pushing back, and helping lawyers have a little bit of backbone. They can now show them a model and say, No, that’s too low, you’re going to lose your shirt.

I think that the role we’re asking our client value director to play, which is part consigliore, part expert, part preacher, is going to have a very positive impact, not just on the project management, but on the pricing side, including a better understanding among the partners about what agreeing to certain conditions means. I think we’ve made a lot of progress on this because we’ve had to, but we still have a long way to go.

Senior managers from three other AmLaw 200 firms added this:

On the pricing side, it’s been one of our great successes. We have three people working on pricing. Two of them are analysts who initially were hired just to be analysts, but we’ve now developed them to the point where they communicate directly with clients. They’ve become fairly sophisticated in understanding not just the pure data side, but also recognizing the differences among clients and how they view our relationship. And that triggers what price arrangements they are or are not willing to offer. As the firm’s CEO, I spend five or ten percent of my time on pricing issues, either working directly with clients or dealing with our lawyers in trying to think about how we should price something. It’s worked out well for us.

We now have a pricing director, and he and I really split the work. He’s incredibly effective with my partners and very good. It’s an interesting job that we both have, trying to facilitate partners’ entrepreneurial instincts and helping them to get business, while guiding them in the transition into this new world of pricing. But we’re also the police for bad deals. He’s fantastic. He has a staff, and we do this function of reviewing every non-standard pricing matter, checking the assumptions, checking the projected profitability. And that’s a critical part of having a strong value-based billing program, especially as clients are expecting, really demanding, alternative fee structures.

We’ve added three positions in the last two years related to pricing and value. The person who heads our group has experience doing program and project management in the software industry, but also has a finance background. So we’re starting to get into the project management side. I think it has been successful, because three years ago we had a lot of difficulty in winning fixed fee and other alternative fee cases, and now we’re getting more of them. We never really did that before.

Part 2 will appear next week and will include quotes from senior management at firms that are assigning new responsibilities in this area to existing staff rather than hiring new people.

 

April 02, 2014

Tip of the month: Become a better listener by asking probing questions

You can improve business development results by becoming a better listener.  The easiest way is to use simple probes to keep people talking such as “Tell me more about…,” “Could you elaborate on…” or “Give me an example of…”  Many lawyers may react the way I did when I first read about using questions like this:  Why should I say “tell me more” when I already got the point?  But probing questions will make you a more active listener and this will lead to more new business.

 

The first Wednesday of every month is devoted to a short and simple tip to help lawyers increase efficiency, provide greater value to their clients and/or develop new business. For more examples of probing questions, see page 160 of my Legal Business Development Quick Reference Guide, which is now available in both paperback and Kindle editions.

 

March 26, 2014

Preview of a Loeb & Loeb budget template from our May workshop

At Ark’s Legal Project Management Showcase & Workshop in Chicago on May 22, David Schaefer, Deputy Chair at Loeb & Loeb, will describe several tools his firm utilizes to make it easier for lawyers to provide clients with more accurate and reliable budgets, including the sample template below that the firm has customized for a sell-side M&A transaction. They have created similar customizable templates for other matters, including a variety of corporate, finance and real estate transactions, and commercial, IP and class action litigation. In addition to helping establish and manage the budget, the templates create a consistent approach to gathering data for historical comparison of matters. Mr. Schaefer will also discuss innovative procedures Loeb & Loeb has developed to improve the efficiency of lawyers’ budgeting time by providing staff support and combining the power of ENGAGE with the simplicity of Excel.

Panelists from four additional firms that are national leaders in the movement to provide more value through legal project management will also describe the tools, templates, and approaches that are being used at their firms:

Sari M. Alamuddin, Partner, Morgan Lewis
Vincent Cordo, Global Director of Client Value, Reed Smith
Stuart J T Dodds, Director of Global Pricing and Legal Project Management, Baker & McKenzie
Donald R. Ware, Partner, Foley Hoag

For more details, see the Ark Group’s web page or contact Ark’s Peter Franken at [email protected] or call (312) 212-1301.  A 15% “early bird” discount is available if you register by April 4. 

 

Budget template for sell-side M&A transaction

 

F71   Pre-Acquisition

 

F71-01 

Pre-Acquisition

 

 

Assemble Team

 

 

Retain and negotiate engagement agreements for consultants and experts

 

 

Structure transaction and analyze tax issues

 

 

Prepare organizational chart

 

F72   Term Sheet/Letter of Intent

 

F72-01 

Term Sheet/Letter of Intent

 

 

Term Sheet/Letter of Intent

 

F73   Due Diligence

 

F73-01 

Due Diligence

 

 

Draft and negotiate confidentiality agreements

 

 

Review organizational documents

 

 

Review material agreements and correspondence

 

 

Review intellectual property documentation

 

 

Review consent requirements

 

 

Review industry specific statutes, regulations and applicable law

 

 

Review corporate statutes and applicable law

 

F75   Purchase Agreement

 

F75-01 

Purchase Agreement

 

 

Review and negotiate Purchase Agreement

 

F78   Ancillary Agreements (as applicable)

 

F78-01 

Ancillary Agreements (as applicable)

 

 

Review Employment Agreements

 

 

Review Noncompetition Agreements

 

 

Review Escrow Agreement

 

 

Review Bill of Sale and Assignment and Assumption Agreement

 

 

Review Assignments of Copyrights, Trademarks and Patents

 

 

Review Promissory Note(s)

 

 

Draft and review Opinion of Counsel to Seller

 

 

Review Opinion of Counsel to Buyer

 

 

Draft Indemnification Contribution Agreement

 

 

Other Agreements

 

F79   Disclosure Schedules

 

F79-01 

Disclosure Schedules

 

 

Disclosure Schedules

 

F80   Consents and Notices (as applicable)

 

F80-01 

Consents and Notices (as applicable)

 

 

Third party consents

 

 

Government regulatory consent

 

 

Board consent

 

 

Shareholder consent

 

 

Notice of Appraisal Rights

 

F81   Filings (as applicable)

 

F81-01 

Filings (as applicable)

 

 

SEC

 

 

State/Blue Sky Filings

 

 

Special Regulatory Filings

 

 

Antitrust filings and notifications

 

 

Press Release

 

 

Qualification to business

 

 

Articles/Certificate of Merger

 

F82   Closing

 

F82-01 

Closing of Transaction

 

 

Closing of Transaction

 

F83   Post Closing

 

F83-01 

Post Closing

 

 

Post Closing



 

March 19, 2014

Research update: Contract attorneys and outsourcing, Part 2 of 2

In Part 1 of this series we focused on successful uses of contract attorneys and outsourcing, but not all experiments in this area have ended happily.

Some failures

Some participants reported that their experiments in the area had been failures:

Although we haven’t given up on them, we’ve not been successful in using lower cost associates, contract associates, or alternative track associates that give us a lower cost. There was a time when we thought that existing associates might like it if we took the demands of being on the partnership track off them, gave them a lower salary, and charged a lower rate for their work. The reason it hasn’t succeeded probably has a lot to do with people thinking they’re in the realm of second-class citizenship. Now we have more of a focus on hiring people who have the expectation of not being on the partnership track. But I think we labored under the misimpression for a couple of years that it was something that may be attractive to our existing associates.

We had a two-year experiment with the use of contract lawyers in India to lower costs. It failed.

As a result of our client interviews, we heard a lot of clients complain about our competitors who use contract lawyers. Probably the most common complaint is that they are not well managed or well supervised and that the quality of the work is extremely poor. So while the price may be low, so is the value.

Some still on the fence          

We haven’t committed to it big-time yet. I think we’re open to contract attorneys. We know what the ethical standards are. For example, say we want to use somebody from India. We’ve studied what our ethical obligations are, and we know we’re going to meet those ethical obligations. Are we at the point yet where we’re ready to do a lot? No, not yet. But we are seriously considering coming up with a new category of attorney who is not on partnership track, who would be considered a contract attorney. We’re talking about hiring some younger kids and maybe bringing them in for three years as sort of an apprenticeship program, paying them less, billing them out at less, and letting the winners rise to the top.

We have some lower cost offices where it might make sense to do some of our commodity price work more efficiently and build a little warehouse of attorneys who can kind of churn through the high volume stuff, but we haven’t done anything like that yet.

Clearly, the idea of lowering costs through contract attorneys and outsourcing is here to stay. Although contract attorneys and outsourcing account for just a small percentage of annual law firm work, they can have important implications for a firm’s flexibility and bottom line. Like other tactics described in this chapter, this can lead to greater efficiency, client satisfaction, and profitability.

However, everything has costs and risks, and outsourcing work raises a number of new management challenges. On August 3, 2011, the Wall Street Journal published an article entitled “Objection! Lawsuit Slams Temp Lawyers.” It reported on a case in which:

J-M Manufacturing alleges that McDermott Will & Emery failed to adequately supervise contract attorneys who inadvertently produced privileged documents to the government… While this may be the first eDiscovery malpractice lawsuit specifically dealing with the lack of supervision of contract lawyers, it surely won’t be the last.

As of this writing, that case has not been resolved, but it has focused attention on the need to manage contract attorneys and outsourcers to assure high quality.  (For more on the topic, see our 2 blog posts on Managing Outsourcing and eDiscovery.)

March 12, 2014

Research update: Contract attorneys and outsourcing, Part 1 of 2

This two part post previews results from my book Client Value and Law Firm Profitability, which will be published this summer.  All quotes are from managing partners, chairs, and other senior decision makers at AmLaw 200 firms.  Each participated in 30-minute in-depth interviews and spoke freely based on the understanding that they could review their quotes before publication, but they would not be quoted by name.

One tactic that many law firms are experimenting with to lower cost is simply to pay less to get the work done. This can be accomplished by directly hiring lower-cost contract attorneys or by outsourcing this function to a growing number of legal process outsourcing firms such as Axiom, Pangea3, and Novus Law.

There is considerable evidence that this trend is growing. In their 2014 Client Advisory, Hildebrandt Consulting and Citi Private Bank reported that in the 10 years from 2002 to 2012, the percentage of “temporary/other” lawyers in large firms grew from 2.4% to 6.1% (p. 7).  The report also noted that “In the Law Firm Leaders Survey, 82% of respondents answered that they are using temporary or contract lawyers. Additionally, 70% responded that they are using permanent, lower cost, non-partner track lawyers” (p. 6)

In our sample, 97% of the firms who discussed this issue had used contract attorneys who were paid as little as $30 per hour, and 59% had experimented with outsourcing, which can be even cheaper. About one-third of the firms are planning to increase the work done this way (31% for contract attorneys and 36% for outsourcing).

Some successes

These experiments have taken a variety of forms, some more successful than others. Here are a few of the examples mentioned by our participants:

Our staff lawyer and e-discovery business has been very successful for us, and very, very profitable.

We’ve had a discovery center alternative staffing model for a number of years. It used to be just for litigation. Now we probably have over 300 clients that run through there. It’s used for everything from government investigations to contract reviews, real estate projects, and M&A due diligence. One of these days, we’ll probably open a second center somewhere else, because we’re at capacity.

We have a contract counsel manager in our firm. We have both direct hire and indirect hire contract counsel. For indirect hire contract counsel, we have relationships with various staffing firms, for large due diligence document review and e-discovery type projects. But we also have our direct hire contract counsel program, where we hire principally alums: people who have dropped out of the regular work force to raise a family or for health or other reasons, but want to do some work. They’re fine lawyers. We developed what we call our “law firm in a box.” We can drop an office into their home. It has a voice over internet phone with a black box computer attached to the back of it. All they have to do is plug the keyboard, terminal, mouse, and printer into the phone, plug the phone into a high speed internet connection outlet in their home, hit a button, and they are a firm office. They can work from home with full functionality.

We have implemented what we call staff attorneys. We are crawling before we walk. We have probably hired eight staff attorneys over the last two years. We really want it to succeed, and so we’ve been careful. Ironically, we’re probably more careful in hiring those people than we are with our full-time associates. But I think we’ve had a good success, and relatively good acceptance among the partners of the concept, such that we will continue to roll it out over time.

We were recently involved in a large project where there were probably 40 to 50 contract attorneys. They were paid $30 an hour. But it is a challenge to align these lawyers’ expectations with reality. Not everybody is going to be on a partnership track, even if they’ve done extraordinarily well in law school, and even if they do very, very well in the law firm. Our goal will be to assure people that they have a future, set expectations, define their career path, and deliver on it. All of these goals will need to make sense inside each firm’s model. Figuring out the correct model for your firm will help in delivering value to clients, but it will be one of the toughest challenges the industry is going to face going forward.

We have non-partnership track associates who have a flexible schedule. They are employees, but they bill at a lower cost. Economically, this is incredibly sensible and works well. But one of the challenges of having non-partnership positions of people who are paid at a lower salary and having them housed in the same place as people who are making high salaries, is that you have some retention issues and morale problems.

You have to manage it properly. As with all tools, it’s not right for every job. But we do use them in areas where the work is more repetitive, and in the areas where I’m sure everybody uses contract lawyers – for outsourcing, for discovery review, electronic discovery, management, all that sort of thing.

Next week, in Part 2 of this post, we will quote some senior managers who have been less enthusiastic about this approach.

 

March 05, 2014

Tip of the month: Plan regular progress reports for every important matter

Start by asking top clients how often they would like to review the status of their matters, and whether they prefer email reports, phone calls or in person meetings.  If practical, offer the matter reviews for free and repeatedly emphasize that you are doing this to assure client satisfaction at your own expense. 

 

The first Wednesday of every month is devoted to a short and simple tip to help lawyers increase efficiency, provide greater value to their clients and/or develop new business. For more ideas to increase satisfaction, see my books the Legal Business Development Quick Reference Guide and the Legal Project Management Quick Reference Guide.