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6 posts from December 2010

December 29, 2010

Six steps to better budgets (Part 1 of 2)

Step 1: Define scope

You can’t estimate costs until you know exactly what you are budgeting for, so the budgeting process must always begin by defining the scope of a matter.

The best statements of scope simply summarize the project objective, the deliverables you will provide, and the “carve-outs” that will be specifically excluded.  You may also want to add key assumptions, the process for accepting work, and the name(s) of the key decision maker(s).

If you are tempted to draft a bullet-proof agreement that specifies dozens of exceptions and “carve-outs,” don’t do it.  If the agreement looks too much like you are trying to protect yourself at the client’s expense, it could lead them to hire another firm that is easier to do business with.

If you are uncertain how clients will perceive your draft, ask a business oriented non-lawyer how they would react if they were the client.  

Step 2: Select the budgeting approach that fits your situation

The best budgeting approach for a $5 million fixed price proposal to a new client requires far more detail and certainty than a $15K new matter with a client you know well.

The Project Management Body of Knowledge (the official source for professionals who want to be certified by the Project Management Institute) lists nine different approaches to budgeting, and other experts have identified many more.    For legal budgets, it is simplest to think of three basic approaches: low detail, medium detail, and high detail budgets.  Each is the best approach some of the time.

Low detail budgets are often referred to as “ballpark” or “rough order of magnitude.”  They are based on past experience, and are typically used early in a project to decide whether to proceed on a certain course or not.  The good news is that they can be generated promptly when a client asks “How much will it cost to…”  The bad news is that these estimates are often wrong but clients still believe them. 

If you guess too low, clients may refuse to pay the actual cost of the work because they perceived your estimate as an upper limit.  If you guess high to reduce this risk, you may lose the work because the client will find somebody who gives an unrealistic lower estimate. That’s why low detail budgets should be used sparingly.  They are most useful for dealing with sophisticated clients who trust you, and who won’t hold your hand to the fire if you guess wrong.

Medium detail budgets are often called “top-down” or “analogous” budgets because they are based on rough mathematical calculations derived from lessons learned in past experience.  If a past case required 10 depositions and this one is similar but will require 20, simply double the cost for the depositions portion.  The key here is factoring in the differences between the past situations and the matters you need to deal with now.  One way is to define a “complexity factor” comparing the present situation to past experience.  For example, if you think that client demands, work processes and the team members you will work with will make this twice as complex, multiply the old price by two.  Medium detail, top-down budgets are most useful in the initial planning of a matter.

High detail budgets are obviously the most accurate approach, and also the one that takes the longest time to calculate.  They are called “bottom-up” because they start from the list of all the tasks and deliverables that must be finished to successfully complete the matter.  The cost of each task is estimated separately, and all tasks are summed to come up with the total projected costs, as described below.

Step 3: Review best practices and estimate costs

My Legal Project Management Quick Reference Guide lists a number of best practices professionals use in estimating budgets, starting with remembering that it is human nature to be optimistic; don’t underestimate how long tasks will take.

If you are using the high detail approach, start by breaking down the matter into sub-tasks, assigning people to each, then estimating the number of hours and costs for each.  For a set of depositions, your spreadsheet could look something like this:


Hours per deposition

Number of depositions

Total hours

Billing rate

Labor cost

Other direct costs

Total cost

Lawyer 1








Lawyer 2








Lawyer 3








Lawyer 4








Staff 1








Staff 2

























For large projects and important bids, you could use several different methods to arrive at an estimate, and base your bid on the average.  For example, you could compute a medium detail estimate and a high detail estimate, and simply average the two.

Another option is to calculate three different estimates: optimistic, pessimistic, and the most likely case.  Your budget could be the simple average of the three, or you could use the more sophisticated weighted average recommended by many project managers, in which you count the most likely cost as four times more important than the optimistic or pessimistic estimates:

Optimistic + Pessimistic + (4 x Most likely)

Don’t forget to leave enough time to manage the team, and a reasonable contingency factor for things to go wrong.

This post was adapted from The Legal Project Management Quick Reference Guide: Tools and Templates to Increase Efficiency.

December 22, 2010

Project management vs. process improvement vs. Six Sigma vs. Lean (Part 2 of 2)

Although there are many approaches to process improvement, Six Sigma and Lean are far more familiar to lawyers than any of the alternatives, as a result of Seyfarth Shaw’s highly publicized success in applying them.  Over the last two years, I’ve written several posts about Seyfarth’s innovative programs, including here, here, and here.     

A Legal Intelligencer article that described the evolution of the program quoted Carla Goldstein, Seyfarth’s director of strategic management, about how lawyers reacted when the process started in 2005:

We were dying.…[Consultants] came in with these binders of jargon and statistics and numbers and the lawyers' eyes were rolling around in their heads.

As their program developed, they moved away from Six Sigma concepts and toward simpler Lean ideas, grounded in customer value.  The program is now called SeyfarthLean, which their web page calls “A Lean Six Sigma approach” and describes as “A commitment to deliver quality and measurable results.”
In many ways, I am a fan of Seyfarth’s innovation, their commitment and their results.  But, as I explained in a previous post, this is an expensive and time consuming way to go.  According to an April 2010 American Lawyer article, “Seyfarth has spent over $3 million to date administering and training workers…and budgets $200,000 – $500,000 annually for such costs.” 

What’s more, as Eric Verzuh noted in his book Fast Forward MBA in Project Management, “A Lean culture…requires top management commitment and persistence [and] a genuine pursuit of perfection by the entire workforce, along with inspired education and training” (p. 409).

One reason process improvement requires so much effort is that you not only have to analyze how to change things, you have to convince people to change.  It’s human nature to want to do things your own way.  Getting people to do things a new way can require enormous effort from a powerful central management team.  But wait – most law firms don’t have a powerful central management team.  Law firms are partnerships, and the partners don’t want to be managed.  They want to do things their own way. 

According to Carl Binder of The Performance Thinking Network, the same problem is often found in other professions.   Consultants identify better processes but then they “can't get the damned people to execute the process.”  That’s why his company concentrates on understanding and improving performance by explicitly focusing on how to change human behavior.

Naturally, in a world of competing consultants with differing views, not everyone agrees with this analysis.  When I asked process improvement consultant Rafael Reisz to review an earlier draft of this post, he said in an email, “I would argue that process management does not only involve convincing people to change. It involves guiding people through a process through which they discover what they wish to change and are provided with the tools necessary to effect desired change. It is true that adoption of improved processes is sometimes difficult but once the process proves itself – via metrics – it is only a matter of time (or a nudge from the managing partner).”

Whatever your views about the difficulty of changing lawyers’ behavior, there can be no doubt that process improvement is valuable and important.  And if you devote several years and millions of dollars to this change, as Seyfarth has, you could win big. 

Then again, Seyfarth is in its sixth year of change, and in the current marketplace, you may not have six years to get better.  That’s why we recommend a just in time approach in which individual lawyers identify what they want to work on, and start today. 

If you don’t know where to begin, turn to page 11 in my Legal Project Management Quick Reference Guide.  That section is called “How to quickly apply key concepts from Lean Six Sigma,” and it includes ten simple questions about typical matters that will help you to “work more efficiently, reduce cost, and increase the client’s perceived value.”  Today.

December 15, 2010

Project management vs. process improvement vs. Six Sigma vs. Lean (Part 1 of 2)

A few weeks ago, the Director of Professional Development and Recruitment at an AmLaw 100 firm asked me to clarify the differences between project management, process improvement, Six Sigma, and Lean.  This was a very sophisticated client who had been researching this area for months, but she had heard many different claims and interpretations from consultants who were selling competing solutions.  In legal blogs, the babble over this has gotten so confusing that some of the lawyers I talk to think these are four different names for the same thing.  They are not.

If you look up the definition of project management in ten different books, you will find ten slightly different definitions.  One of my favorites is from Rita Mulcahy’s PM Crash Course: “[Project management is] a systematic process used to initiate, plan, execute, control and close a project to meet defined objectives” (p. 9).  I like this definition because it is short, it is simple, and it specifically lists the five key functions emphasized in the Bible of the field, the Project Management Body of Knowledge: initiate, plan, execute, control and close. 

In our new Certified Legal Project Manager™ program, lawyers review assigned readings from six leading textbooks, and apply them to their practice.  We recently analyzed the content of these books to see how much space was devoted to process improvement, Six Sigma, and/or Lean.  For the five texts that survey the entire field, the answer was 1% (26 pages out of 2651).  For the only book which is specifically about legal project management, my Legal Project Management Quick Reference Guide, the proportion rose to 9%, which still leaves 91% of my book focused on the rest of project management, and organized in terms of eight key issues that matter to lawyers:

  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 to the schedule and budget
  6. Manage quality
  7. Manage client communication and expectations
  8. Negotiate change orders

In our just in time training programs, we ask lawyers to review this list and pick out the issue that matters most in their practice today.  What issue would they like to work on?  Exactly what should they do about it?  Our goal is to come up with immediate and practical steps that each lawyer can take that same day.  While our legal project management training aims to change one thing at a time for one lawyer at time, legal process improvement training often tries to change everything all at once, for a practice group or for an entire firm.

According to Wikipedia, process improvement aims to “identify, analyze and improve existing processes within an organization to meet new goals and objectives.”  Six Sigma is described as “a set of practices designed to improve manufacturing processes…by identifying and removing the causes of defects (errors).”  Finally, “Lean is a production practice that…is centered on preserving value with less work.” 

Process improvement is a general term.  Six Sigma and Lean are different approaches to process improvement; subtypes, if you will.  Both originated in the world of manufacturing – Six Sigma at Motorola and Lean at Toyota – and both have since been adapted and extended to a wide variety of business processes, including legal matters.

According to consultant Rafael Reisz, “Process improvement is basically thinking about how you do what you do.”  Reisz recently completed a project for an AmLaw 100 firm using an approach that “is outcome driven rather than [based on] error reduction processes developed for manufacturing firms. It is a structured approach but is simpler, less expensive, repeatable, and, I find, more meaningful to my clients than Lean or Six Sigma.” 

Process improvement is a broad area, and there are also many other ways to pursue it.  If you go back to that Wikipedia definition, the “see also” section refers to a total of 18 related topics.  But in the legal world, Six Sigma and Lean have gotten all the headlines.  Next week, I will discuss why.

December 08, 2010

Questions and answers about Certified Legal Project Managers™ (Part 3 of 3)

This post concludes my answers to the questions from Paul Easton, author of the Legal Project Management blogFor an update on the certification program’s status, see today’s press release on BusinessWire.


Paul’s question: I find it interesting that the program is customized to the individual attorney. The certification process begins with “an initial assessment telecon interview to determine each lawyer’s background and needs” and the study materials are selected based upon this interview. In short, this is not a standardized course. This seems like a great program from the learner’s perspective, but doesn’t the lack of standardization make it more difficult for the industry and legal employers to understand what skills this certification represents its holders as having?

The Certified Legal Project Manager™ Program is designed first and foremost to guarantee mastery of a baseline level of knowledge, which will be the same for every lawyer who completes the program.

However, lawyers will come into this program with different expectations and backgrounds, so it is important that the program also be tailored to fit each participant’s needs.  This will be accomplished in three main ways:

  1. In Module 1, questions are framed in terms of each specific practice.  For example, when defining a statement of work, participants are asked “What are the most important elements for your practice?” not “What are the most important elements in general?”
  2. The list of readings in Module 1 includes many suggestions for “supplementary readings” useful for lawyers who want to go beyond the minimum, including those who come to the program with a higher level of basic knowledge
  3. All of Module 2 is devoted to applying key concepts to an actual matter from each lawyer’s practice

The idea of also creating a unique reading list for each individual is an element of the program that appeared in the preliminary outline you reviewed, but which was changed as a result of discussions with the Certification Advisory Board.  Everyone will work from the same basic reading list.  It will include many options, enabling each lawyer to customize readings for themselves.

Paul’s question: Tell me more about the reference library that program participants use in their studies. What does it include? Is it all original material? 

Each participant will receive a library of six widely respected project management texts with a total of more than 2,500 pages, including my Legal Project Management Quick Reference Guide and A Guide to the Project Management Body of Knowledge (PMBOK Guide) by the Project Management Institute. 

In Module 1 of the program, lawyers will be sent a list of open-book essay questions, along with a reading list suggesting exactly which sections of these books will be most useful.  In Module 2 and beyond, they will continue to use these books whenever they need access to more advanced information.

Paul’s question: What impact do you think or hope that this certificate program will have on legal-project management as a discipline and on the legal industry as a whole? 

Of course we hope that this program will help raise standards so lawyers can better meet client needs.  However, in all honesty, we do not believe that legal project management certification is necessary, or even desirable, for every lawyer.  LegalBizDev offers a number of other programs which we think would be a better fit for most lawyers, including several types of "just in time training" and an Introduction to Legal Project Management course.  Certification is designed for those who want to go a step further and guarantee a solid foundation in both knowledge and skills. 

Paul’s question: Where do you see demand for your certificate program in ten years? 

To be honest, I have trouble predicting ten months from now, so I am reluctant to try to predict ten years.  But I do feel safe in predicting that the marketplace will make some lawyers winners and some losers over the next ten years, and that lawyers who master legal project management are far more likely to be among the winners.  That does not mean they have to be certified, but it does mean they will have to pick up these basic skills somewhere, somehow.

Lawyers begin new program to become certified as project managers

This press release appeared today on BusinessWire.

Boston, MA – December 8, 2010.  A few days ago, senior partners from Squire Sanders, Stewart McKelvey and Harris Cost began working on a new program to become Certified Legal Project Managers™.  This six-month international distance learning course was designed by Jim Hassett of LegalBizDev (www.legalbizdev.com) to help lawyers apply proven project management techniques to increase client satisfaction, deliver high quality solutions for a reasonable cost, reduce risk, and increase profitability.

“When we announced this program on November 1, I thought that it would take at least three months to sign up the first firm,” Hassett said.  “Law firms often make decisions by committee, and that can take time, especially with something new and innovative like project management certification. But the first few lawyers signed up quickly, and quite a few others have told us that they plan to start in January.  So we now think that we could have dozens in the program by the end of the first three months, and a much larger number within six months.”

According to litigator Stacy D. Ballin, co-chair of Squire Sanders’ Project Management Committee and one of the first to sign up, “Clients are insisting on greater value through project management, and law firms are trying to figure out the best way to meet this need.  When Jim Hassett spoke at our partners’ meeting a few months ago, we talked about the unique ways project management must be adapted to fit the legal profession, and the lack of standards in this rapidly growing field.  When LegalBizDev announced this certification program, my co-chair Mitch Thompson and I saw this as a good fit for Squire Sanders.”

The program was designed with the help of the LegalBizDev Certification Advisory Board, which consists of fourteen practicing lawyers and project managers from firms with a total of over 10,000 lawyers, including Fasken Martineau, Ford & Harrison, McDermott Will & Emery, Miles & Stockbridge, Morgan Lewis, O’Melveny & Myers and Williams Mullen. 

According to board member Jim Dickson of Stewart McKelvey, “In other fields, project management is simply a way of life, necessary to the successful, timely and on-budget completion of projects.”  The LegalBizDev program is “well-tailored to fit the legal profession” and will help Stewart McKelvey “substantially improve service to our clients.”

To become certified, lawyers work closely with a legal project management expert on key competencies, review assigned readings from six leading textbooks which come with the program (including Dr. Hassett’s Legal Project Management Quick Reference Guide), and answer a series of probing essay questions.  The expert and lawyer work together applying these concepts to improve real-world results for actual matters from each practice.

In addition to certification, LegalBizDev offers several related programs, including “just in time” legal project management training and an Introduction to Legal Project Management course

The next certification group begins January 3.

Elisabeth Westner, 617-217-2578 or 800-49-TRAIN

December 01, 2010

Questions and answers about Certified Legal Project Managers™ (Part 2 of 3)

A few weeks ago, I posted the first answers to a series of questions Paul Easton, author of the Legal Project Management blog, had asked when we announced our new certification program.  I postponed the next installment until today, when the first group begins the certification process. 

Paul’s question: You designed this program in response to a request from “an 800-lawyer firm [who] asked [you] to design a formal certification program for two senior partners.” Is your program targeted exclusively at large firms?  Would a small firm or solo practitioner benefit from your program?

The principles apply to firms of any size.  The first two people to sign up were the two senior partners from Squire Sanders who requested the program.  (As a result of its recent merger with Hammonds, it now has over 1,200 lawyers.)  But the third person to sign up was a lawyer from a nine-lawyer firm in Australia that learned of the program over the web.  And the fourth and fifth people were from Stewart McKelvey, a Canadian firm with over 200 lawyers. So we already have evidence that the program meets a need in firms of all sizes. 

Paul’s question: One of the eligibility requirements is that you must be a practicing lawyer with 10 years experience. Why not legal-support professionals (e.g., paralegal, litigation support, and legal IT staff)?  Aren’t they more likely to fill the legal-project manager role than lawyers?

In November, the LegalBizDev Certification Advisory Board reviewed the preliminary outline which you saw, and modified a few of the details, including eliminating the ten-year requirement. Our program’s prerequisite is now defined as “practicing lawyers who have at least three years of experience managing large legal matters.”  We are currently working with a small group of paralegals to determine the best way to adapt our program to meet their needs, and will announce the results early next year.

Paul’s question: Who sits on LegalBizDev’s Certification Advisory Board? 

The board has fourteen members from firms with a total of over 10,000 lawyers, including:

Borden Ladner Gervais – Andrew Terrett
Fasken Martineau – Howard Kaufman
Ford & Harrison – Kay Wolf
McDermott Will & Emery – Byron Kalogerou
Stewart McKelvey – James Dickson
Miles & Stockbridge – David Eberhardt
Morgan Lewis – Richard Rosenblatt
O’Melveny & Myers – Stacie McLean
Squire Sanders – Stacy D. Ballin
Williams Mullen – John Paris

The remaining board members have chosen to remain anonymous.

Paul’s question: How do you determine if the experiential requirement is met? For example, I passed my first bar exam in late 2001, but for the past six years I’ve worked in legal staffing and project management, primarily for large electronic-discovery projects. At the end of 2011, would I qualify for this certification?

Decisions will be made case by case.  Based on what you wrote here, I am guessing that the “practicing lawyer” part of the requirement does not fit you.  However, as I noted, we are currently exploring the idea of parallel programs that fit the needs of other audiences.

Paul’s question: Do you plan to eventually design an entry level certification for lawyers who want to learn project management and differentiate themselves from their competition, but who do not have the requisite legal experience for your professional certification?

We are not planning an entry level certification at this time, but as Nobel prize winning physicist Neils Bohr famously said, “It is hard to predict, especially the future.”

Paul’s question: Why do lawyers need more initials after their names? After all, obtaining a JD and passing a bar exam qualifies a lawyer to practice law. Also, shouldn’t experienced lawyers know how to manage their cases?

Lawyers certainly don't need more initials.  But many do need the knowledge and skills this program will provide.  While experienced lawyers typically do know how to manage matters the old way, the “new normal” demands new management skills.  Until recently, generations of lawyers were never asked to be more efficient, so it is not surprising that they could use some help. 

Paul’s question: What is your certification’s formal title and initials? 

The program title is Certified Legal Project Manager™.  We do not expect people to use the initials.

Paul’s question: Two years ago, almost no one was talking about legal-project management. Has awareness of and demand for legal-project management grown so much in a couple of years to create the demand needed to support a certificate program? 

Absolutely yes.

Paul’s question: Is legal-project management just another management fad? 

We believe that clients are making this paradigm shift permanent.  Once law firms learn to deliver the same high quality more efficiently, why would clients ever want to go back?