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4 posts from April 2011

April 27, 2011

Engagement letters vs. statements of work

This post was written by LegalBizDev Principals Mike Egnatchik, Tom Kane, and Jim Hassett.

At the beginning of a new matter, lawyers often specify its scope and fees in an engagement letter.  The engagement letter is designed to clarify exactly what is included, and excluded, from a particular matter.

Some states have specific requirements for what must be included in an engagement letter, and some firms have their own requirements as well. For example, in New York State, Part 1215 of the Joint Rules of the Appellate Division requires a letter of engagement in most matters, except for certain exceptions listed in the rule (i.e., an engagement letter is not required if the fee is expected to be $3,000 or less). 

From a project management point of view, there is considerable room for improvement in many engagement letters.  Consider, for example, this language from the sample letter of engagement published by New York State:

Scope of representation

A claim, dispute or dealings with relating to ______________.

All of our services in this matter will end, unless otherwise agreed upon in a writing signed by us, when there is a final agreement, settlement, decision or judgment by the court.  Not included within the scope of our representation are appeals from any judgments or orders of the court.  Appeals are subject to separate discussion and negotiation between our firm and you.  Also not included in the scope of this agreement are services you may request of us in connection with any other matter, action, or proceeding. 

The rest of New York’s two-page sample focuses on fees and client rights.  Fee options for the sample include a flat fee, a contingency, or hourly rates.

If a law firm copied the New York State sample exactly and negotiated a fixed fee, they might end up being very sorry when the matter spiraled out of control.  They would be better protected if the engagement letter specified timelines and deliverables, such as the maximum number of interviews, pleadings, interrogatories, opinions, and reports, the anticipated scope of travel and research, the use of outside consultants, and so on.

Could a lawyer possibly know in advance how many depositions would be required to settle or plead a particular case?  Of course not.  But he or she could specify the maximum number of depositions they expected, and exactly what would be included within the fixed price. 

This failure to provide sufficient detail is quite common.  The Executive Director of one AmLaw 100 firm (who preferred to remain anonymous) recently told us:

“The scope of work often contained in our engagement letters is generally no more than one or two lines.  Lawyers are missing an opportunity to clearly specify the scope of what is included in each matter, and what is not.”

From the client perspective, better specifying the work up front could lead to more predictable costs and a more sophisticated understanding of what they are paying for.  From the law firm’s point of view, it could reduce fee disputes, write-downs and write-offs. 

Entire textbooks have been written on how to develop what project managers call a statement of work (SOW), which specifies what a particular project includes and excludes.  (For example, see Delivering Project Excellence with the Statement of Work by Michael Martin.)  Lawyers may wish to adapt some of these ideas and write a SOW which could either be included in the engagement letter or be a separate document, depending on the nature of the matter, the lawyer-client relationship, and joint expectations.

This post has been adapted from the second edition of the Legal Project Management Quick Reference Guide, which will be published in May.

April 20, 2011

How to improve the management of legal teams (Part 4 of 4)

Rule # 8:  Motivate the players

“Don't tell people how to do things, tell them what to do and let them surprise you with their results.” George S. Patton

Rule #1 in this series was to identify what drives your team: the inherent intellectual challenge of legal matters, the relationships and collaboration, competitiveness, or the simple need to pile up billable hours. 

Of course, the answer is likely to be all of the above and more, in different proportions for different people.  On large matters, your job as a leader is to develop a sense of what motivates each key individual and then to incorporate these motivators into your feedback and interactions with team members.

Make sure key team members understand the deliverables in the statement of work, and then give them ownership of the process.  Let them tell you how to meet your goals, on time and within budget.

Motivating some team members may be as simple as recognizing and praising their accomplishments.

If you expect the best from your team, you are more likely to get it.

Rule #9:  Develop plans

“Failing to plan is planning to fail.” - proverb

Lawyers are good at convincing clients to invest time and money in planning.  Clients are told to plan their taxes, plan their estates, and plan the best way to structure their contracts.

But when a new matter begins, many lawyers would rather jump right in than step back and plan their approach.  Jumping right in can be a great way to be inefficient, and the traditional billable hour model rewards inefficiency.

However, as one consultant put it “being too busy to plan is a lot like running alongside your bicycle because you are too busy to get on.” Now that clients are pressuring legal counsel to become more efficient, there is a new emphasis on developing a plan before beginning a matter.

Planning starts with a solid statement of work, so it is clear that the client and the lawyer agree on what is to be done.

Then the lawyer in charge can map out the necessary tasks and assign them to different team members.  Our Legal Project Management Quick Reference Guide includes a form called the Matter Planning Template.  I have to admit that I have been a bit surprised by its popularity. The truth is it’s just a simple form for breaking a matter into subtasks, and then assigning people, timelines, and budgets to each.  But many lawyers we work with have reported that using this form to structure simple planning steps can make a big difference.

Better yet, don’t just create a plan by yourself.  Get your team so involved in the project and decision making, that they say, “This is our plan.”

Rule #10:  Control, evaluate, and improve

“As we look ahead into the next century, leaders will be those who empower others.” - Bill Gates

When I first started managing projects, the biggest mistake I made was trusting people too much.  I had hired extremely talented people, I reasoned, to they would figure things out.

I learned the hard way that effective managers control the work process, evaluate the results, and use the results to improve performance.  This can be valuable even if a project is so small that you are working alone.  But when you work on projects with large teams, “control, evaluate and improve” is absolutely vital.

If you want to rely on software for this, our opinion is that the best software solution is the one you already own and know how to use.  Whether your team uses Office Outlook, Lotus Notes, Groupwise, or something else, it’s worth learning about the features that can help you manage your team, including e-mail groups, meeting invitations and scheduling, and creating and tracking team “To Do” lists.

Tracking the budget is especially important these days, and we often hear about how law firms accounting systems are becoming more sophisticated in their ability to support periodic work-in-progress updates.  How often do you need these updates?  The answer varies from one matter to another.  Many firms seem to be headed toward real-time reporting, and requiring lawyers to update their time records daily.

Finally, at the end of each important matter, it is vital to conduct some sort of “lessons learned” review.  Poll your team members on what they thought worked well and what they thought needed improvement. 

However, ultimately, there is only one results assessment that counts, and that comes from the client.  So you need to make sure that you have an accurate reading from the client, as close to the end of the matter as possible.  Our Legal Project Management Quick Reference Guide includes a number of tools and templates to help conduct these reviews more efficiently.

In the “good old days” when clients rarely complained about the efficiency of legal teams, and hourly rates went up every year, in all honesty it was not necessary to think about better ways to manage legal teams.  Now it is.

Some material from this series will appear in the second edition of the Legal Project Management Quick Reference Guide, which will be published next month.

April 13, 2011

Announcing a new book on legal project management

Yesterday, we issued the press release below to announce the publication of the second edition of my Legal Project Management Quick Reference Guide: Tools and Templates to Increase Efficiency.

We recruited lawyers and professionals from nearly 40 large and mid-sized firms (listed below) to provide advice on what to include, and on our approach to publishing the book.  After much debate, we decided to continue the limited distribution policy from the first edition.  Since the book includes a significant amount of proprietary information from our training and coaching programs, it will be sold only to law firms and only through our web page.


The press release

Next month, Jim Hassett, Ph.D., the founder of LegalBizDev, will publish the second edition of his popular Legal Project Management Quick Reference Guide.  

QRGCover_Small The guide “was written for lawyers who don’t have time to read books but need to find ways to quickly apply proven project management principles in order to deliver greater value to clients, increase profitability, reduce risk, and focus on clients’ true needs,” said Hassett, whose company is recognized as a leading innovator in legal project management training.

The book is subtitled Tools and Templates to Increase Efficiency, and is organized around eight key issues: setting objectives and defining the scope of a matter, identifying and scheduling activities, assigning tasks and managing a legal team, planning and managing a budget, assessing risks to the schedule and budget, managing quality, managing client communication and expectations, and negotiating change orders. It was not written to be read from start to finish but rather as a handy guide for lawyers with questions in any area of project management.

“This is an exceptional piece of work,” said Patrick Lamb, founding member of the Valorem Law Group. “It answers the ‘how to’ questions that everyone has. It provides best practices, templates, guidance and wisdom on how to accomplish this massive change by focusing on low hanging fruit and seizing early wins to demonstrate the value of this skill set.”

The book includes proprietary material from LegalBizDev’s highly acclaimed training programs for attorneys.  It is being sold only to law firms and only through LegalBizDev.com. The book adds more than 80 pages of new material to the July 2010 first edition, which was purchased by firms with a total of more than 65,000 lawyers.

“The phrase ‘legal project management’ has become popular lately,” Hassett said, “but the field is so new that people are still uncertain about which tactics will have the greatest impact for lawyers. This book will help each lawyer find the tactics that fit their practice and personality.”

The book can be ordered now by email (guide@legalbizdev.com), by fax (917-386-2733), by phone (800-498-7246), or by mail (LegalBizDev, 225 Franklin Street, 26th floor, Boston, MA 02110).  It will be released in May 2011.

The price is $49.95 plus shipping ($10 in the United States, $30 outside the United States), with a 50 percent discount when ordered as part of a LegalBizDev program. 


The LegalBizDev Reference Guide Advisory Board

I would like to thank these experts, and others who chose to remain anonymous, for their reviews and suggestions on early drafts.

Cindy Bajdarvanov, Litigation Pricing and Budgeting Manager, Fish & Richardson

Mark Barbee, Director of Project and Portfolio Management, Greenberg Traurig

Michael D. Barnes, Senior Director of Business and Program Services, DLA Piper LLP (US)

Wesley Beato, Competitive Intelligence Manager, Herrick

Martin D. Beirne, Chairman, Beirne, Maynard & Parsons

Toby Brown, Director of Pricing and Strategy, Fulbright & Jaworski

Jeff Bukowski, Shareholder, Stevens & Lee

Steve Burke, Associate Director of Business Development, Proskauer Rose

Jonathan Cooper, Partner, Tucker Ellis & West

Kim Craig, Director of Project Management Office, Seyfarth Shaw LLP

Jim Dickson, Partner, Stewart McKelvey

Paul Easton, Managing Director, Global Colleague

David Eberhardt, Principal, Miles & Stockbridge

Karen Febeo, Director of Training, Goodwin Procter

Bill Garcia, former Executive Director of Strategic Initiatives, Howrey

Sam Goldblatt, Partner, Nixon Peabody

Melanie Green, Director of Business Development and Marketing, Baker & Daniels

Missy Hower, Director of Practice Group Services, Perkins Coie

Suzanne Iazzetta, Associate, Lowenstein Sandler

Byron Kalogerou, Partner, McDermott Will & Emery

Howard Kaufman, Counsel, Fasken Martineau

Susan Kurz, Director of Business Development and Marketing, Keating Muething & Klekamp

Patrick Lamb, Founding Member, Valorem Law Group

Susanne Mandel, Chief Marketing and Business Development Officer, Lowndes Drosdick Doster Kantor & Reed

Lauren Meader, Senior Manager, Business Development, Arnold & Porter LLP

Howard Nicols, Global Managing Partner, Squire Sanders

Rose Ors, Business Development Director, Manatt, Phelps & Phillips

John Paris, Partner, Williams Mullen

Michael K. Renetzky, Partner, Locke Lord

Michael Roster, former Managing Partner, Morrison & Foerster’s Los Angeles office

Steven Schroeder, Chief Business Development Officer, Hinshaw & Culbertson

William Cory Spence, Partner, Kirkland & Ellis LLP

Clinton Swan, Head of Marketing and Business Development (Middle East Region), Clyde & Co

Fram Virjee, Partner, O'Melveny & Myers

Felice Wagner, Chief Client Service Officer, Sutherland Asbill & Brennan

Graeme Wood, Head of Project Services, Linklaters

For more details, or to order the book, see our web page.

April 06, 2011

Legal project management tip of the month: Monitor the budget in real time

Always know what you have spent so far, and what you expect to spend in the future.  Make sure that all team members submit their time slips promptly, so you can check at regular intervals that the work is being done within the projected budget.  Focus your attention on the largest tasks that will require a high percentage of the budget.

This is the second in a new series of posts, which will appear on the first Wednesday of every month.  Each tip will summarize a very simple tactic to improve project management.