LPM Case Study: Loeb & Loeb (Part 2 of 4)
Last year, I wrote Part 1 of this series about our pilot test of legal project management coaching at Loeb & Loeb LLP a law firm with more than 300 lawyers in Los Angeles, New York, Chicago, Nashville, Washington, DC, Beijing and Hong Kong. At the time, I did not know that there would be a Part 2.
Since then, Loeb & Loeb has selected a total of 19 lawyers to complete our two to three month coaching program, with more on the way. They have also expanded the role of their internal business managers in LPM, refined their use of ENGAGE software, and even added a section to their firm web site describing Loeb & Loeb’s commitment to LPM.
One reason they are expanding the program is that clients are demanding LPM in increasingly sophisticated ways. According to Andrea Danziger, the firm’s Director of Business Development and Practice Management:
A year or two ago, most clients simply asked whether you used LPM, and it was enough to just say "we’re committed to efficient project management" and explain our tools and resources. These days, clients ask harder questions: "Show me how you’re going to apply LPM, walk me through it." The attorney who’s making a presentation has to really prove that they understand LPM and know how to use it.
Why do clients care about LPM? According to the firm’s Deputy Chairman, David Schaefer, one reason is that:
It’s clearly of benefit to clients when we provide a high level of certainty that we can work within a budget. For example, we have a significant financial institutions practice, where we represent banks and others who make loans and extend credit, and the borrower pays the fees. The ability to come up with a budget and a fee arrangement that is agreed to at the outset has enabled our clients to be more competitive in their marketplace, because borrowers look at the total cost of funding, including legal costs.
Miriam Cohen is a finance partner in Loeb & Loeb’s New York office, whose practice primarily involves representing lenders on secured loans. She recently completed a three month program with LegalBizDev coach Michelle Stein.
The most important advantage of LPM, in Miriam’s view, is that it helped her to come up with a system to obtain and present information for clients quickly and readily, so that clients understand the entire array of time and budgeting data for a project -- based on a single document.
“I can now create this quickly for any client,” she says. “[Clients] just want the bottom-line numbers, and there are so many assumptions that go with the numbers. I just plug in the numbers and I have something that a client can understand. If you don’t get them the data fast enough and in this manner, they will give the work to someone else.”
Miriam says this applies to existing clients, who, when they need a new project done, will usually obtain three bids – one from Loeb & Loeb and two from competing law firms. Since the borrower typically pays the bill for lender’s counsel in these transactions, both the borrower and the lender have an incentive to keep the bill low and to know in advance how much it will be.
The document that Miriam prepares is a budget worksheet that contains all the assumptions regarding the upcoming transaction – staffing, time, complexity, and so on.
“For example, the assumptions I typically make in preparing the document,” Miriam says, “include that borrower’s counsel will be competent and can deliver an appropriate product and that there will be no more than four turn-arounds of the lending documents before they are final.”
In the past, Miriam says, most lawyers made these budgets and assumptions “on the back of a napkin” but not surprisingly that process didn’t consistently result in accurate estimates.
These days, much of the calculation at Loeb & Loeb is done in the background by Stephanie Flitcroft, a national business manager working out of the firm’s Los Angeles office. When Miriam needs information and budgets based on past experience, Stephanie and her team use ENGAGE to find the best information and send Miriam the info she needs. Stephanie prepares the output in Excel, and Miriam uses it in a Word table that lays out the budgeting and task information in a logical fashion. When they win the work, Stephanie also provides weekly spending reports.
The LPM coaching, Miriam says, “helped me to create this document where everything is in one place. Now, no client should be surprised by the bill when they receive it.”
In addition, Miriam says, everyone in her group uses standard task and billing codes now.
“This is a great way to force discipline from my team. I created my own time and billing codes, based on the type of work that the team does, and this accurately reflects their time.”
That’s a great example of the value of improved communication, Stephanie says:
LPM coaching has enabled billing lawyers to have much better communication with both the client and with the timekeepers. The client knows what’s going on in the matter. They feel part of the process, not left out. They have an idea of where fees are going to end up, because we’ve provided them with estimates and monitored spending. And on the other side, with the increased communications between the relationship partner and the timekeepers, tasks and expectations are being relayed more clearly. So you don’t have timekeepers going off and looking under every rock to get an answer.
For Miriam, LPM has already led to new business as a result of the more systematic approach to engagement letters, and the increase in client confidence in budget estimates.