LPM Case Study: Loeb & Loeb (Part 3 of 4)
Ross Emmerman is a Chicago-based corporate and M&A lawyer at Loeb & Loeb who was coached by Fred Kinch. Ross says that although many attorneys at the firm start out by considering LPM to be just one more thing that management wants them to engage in, Loeb & Loeb’s National Business Manager Stephanie Flitcroft has “taken the laboring oar” and helped the firm add a great deal to its capacities through the use of LPM. He is in constant touch with Stephanie and says he uses LPM tools at least twice a week.
Ross knows that the firm uses ENGAGE “behind the scenes,” but he works with easier to use Excel spreadsheets prepared by Stephanie. (A sample format for a typical spreadsheet for a sell-side M&A transaction appeared in a previous post.)
From a practice standpoint, the most important aspect of LPM for Ross is that his sophisticated clients “understand that changes in scope are inherent in transactions” but matters still need to be on budget and on time. In comparing an attorney’s role with LPM to a general contractor’s role to a construction project, Ross mentioned that no builder would tell a prospective homeowner in advance that a new home would cost anywhere between $300,000 and $600,000; that is much too large a range and does not contain any analysis. A home builder would not be expected to have enough data to hit the number on the spot before all the variables were known, but bids would be expected to fall within a much smaller range, such as $420,000 to $450,000. In today’s marketplace for legal services, the same is true for predicting legal costs.
The essence, according to Ross, is not whether a firm uses Excel or ENGAGE or other software. What matters is the data that a firm retains and how the firm tracks and uses that data to come up with a reasonable advance analysis of the cost of each phase of a project. As a partner, he says, “I am accountable to the client,” and his ability to provide accurate estimates in advance is very helpful to creating and maintaining client relationships.
During the coaching, he not only developed more detailed budgets himself, but also sent out budget hours by task to the team members at the start of matters to get their input and buy-in. In the future, he expects that the team members will become accustomed to this process and may even be call upon to set the initial budgeted cost and time estimates.
Back in the old days, he says, lawyers simply did this by the seat of their pants, and no one knew where you were going with the deal or its costs. That is no longer acceptable. One of the reasons that better budgeting was not possible years ago was that firms did not retain their data for this purpose or kept their data in a “big lump,” with no effective way of breaking it down. Now Loeb & Loeb and other leading firms retain their data in a form that can be broken up into pieces as needed. They can then use the data “quickly and intelligently.”
Ross joined Loeb & Loeb in March 2013, and in his previous firm he had received LPM training. But LegalBizDev’s coaching was able to take him “from theory to practice.”
According to Andrea Danziger, Loeb & Loeb’s director of business development and practice management, a number of people who went through the program had similar experiences: “Once they started working with a coach, they realized right away, I’ve been doing LPM all along. But now it’s more methodical and sophisticated, supported by new resources, including business managers, budgeting software, and the various reports that we run. That makes lawyers much more confident to explain to clients how they will use LPM to manage a matter within budget, and communicate effectively about mutual expectations.”