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April 14, 2010

What every lawyer needs to know about project management (Part 4)

It’s all about tradeoffs

If we lived in a perfect world with unlimited resources, no one would need project managers.  But here on Earth, resources are limited and managers are constantly forced to make difficult choices.  For example, when computer programmers develop a new product, no matter how good the product may be, someone can always think of a way to make it even better.  But each new feature requires time and money.  If software companies intend to stay in business, someone must decide which changes are worth making and which are not.  That’s why experts talk about the “project management triangle”: every project is constrained by scope, schedule, and budget.  If you change one, the others change too.

As project managers often put it, “Better is the enemy of good enough.”  The phrase can be traced back to Voltaire, and is not an endorsement of mediocrity.  It is an endorsement of pragmatism, of analyzing the cost of each action in advance, and proceeding only if that cost can be justified by its return. 

It is human nature to always seek a better solution and for each of us to add our own personal stamp.  It is the project manager’s job to keep human nature in check and thus assure that projects are completed on time and within budget. As a Deputy Division Chief at NASA put it in an article about the space program:

In our zeal to solve problems in new and innovative ways, project managers must be prudent not to allow requirements creep or design solutions to bankrupt the whole project.

Many lawyers have spent their entire careers with little motivation to deliver within budget.  The billable hour has implied that the more thorough lawyers were (and the longer things took), the more money they made.

A few years ago, after I gave a business development speech at a law firm retreat, one lawyer came up to me to ask how to handle a client problem.  He had recently completed an assignment for a real estate developer, and written what he called “the perfect lease.”  It was one of the proudest moments of his legal career, and his colleagues agreed that he had crafted language which would protect the client’s interests under any conceivable scenario.  There was just one problem: the client hated it.  Well, they didn’t hate the lease, they hated the bill.  They also refused to pay it, because they had been expecting a much lower cost.

So this lawyer asked me: How can I make my client understand that the perfect lease was worth the money?  My answer: You probably can’t.  If that’s not what the client wanted, it is not perfect.  What you need to do is go back to the client, ask a lot of probing questions, and listen.  Don’t argue, don’t talk, just listen.  When you understand what they wanted to buy, then you will be in a position to negotiate a price they will pay, and you can try to salvage the relationship so you will get more of their business in the future.

It all goes back to the best practice mentioned above: hold difficult conversations before money is spent, not after. 

To download a .pdf summary of this series, see the white paper in the project management section of our web page.  It will be updated from time to time as the series continues.  Additional information appears in the Legal Project Management Quick Reference Guide.

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Comments

>If we lived in a perfect world with unlimited resources,
>no one would need project managers.

While scope and resourcing are important issues in project management, they are not the only factors. Effective project management also includes team building, communications (to which you allude in the final sentence), organization/planning, feedback, and a host of other items. The "mechanical" or tool-supported scope/budget/resourcing parts of managing a project are important, but there's a lot more to a successful legal project than these factors.

What if you have that difficult conversation, and ask questions, and the result is: "I want a lease that's cheap, but protects all of my interests." Well, client, you can't have that.

How about this: "I'll give you a cheap lease, and there are a half dozen ways I can think of you'll be exposed to risk (and probalby another half dozen that I haven't spent the time to think of), and I really don't have the resources to craft language around this problem, and if the problem arises, you can call my litigator friend here?" Sadly, I think many clients will go for this. But five years later, when the issue arises, and everyone askes "well who drafted the lease?" and the word gets out - it's YOUR reputation that's shot. I'm not saying that PM can't work for lawyers, but we need to first address the client's infinite needs and the effects of reputation on decision making.

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