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6 posts from September 2015

September 30, 2015

Legal project management: An opportunity for firms to gain a competitive advantage (Part 2 of 4)

Note:  This series is adapted from a chapter I wrote for a new book just published by the Ark Group entitled 2020 Vision: The Future of Legal Services.

Why is LPM so important?

In the current highly competitive environment, many law firms are struggling with two key issues:

  1. Pricing: How do we bid high enough to make an acceptable profit, but low enough to get new work?
  2. Managing: After we win work at a particular price, how do we manage the work to make a profit?

Another chapter in this book discusses how law firms are addressing the first question. While both are important, we would argue that management holds the keys to success. This is an era of dog-eat-dog competition in the legal profession, and firms often have little control over pricing or whether a matter is to be handled on an hourly basis or under an alternative fee. But once the price is set and the fee is structured, they CAN control how the work is done.

When I interviewed managing partners, chairs, and other leaders of 50 AmLaw 200 firms for my book Client Value and Law Firm Profitability, several talked about the importance of implementing LPM:

One of the problems that we have, and frankly that most firms have, is just teaching lawyers how to manage a project, getting them out of the habit of just automatically starting out with some rote process. Just because the client says “I think I might have a lawsuit” doesn’t mean you go off and conduct 40 depositions. Lawyers need to sit down and talk about what the client is trying to accomplish. It might turn out that we are able to accomplish the client’s end goal without taking any depositions. Or we might be able to do an M&A transaction, not by going through all the traditional steps, but stopping and thinking critically first. That’s something that we spend a lot of time trying to get across to our younger lawyers.

Project management is the next great horizon we need to reach. Historically, I believe that legal matters have been handled largely by just forging ahead with the project team leader directing various team participants to address this or that task without any formal checklist in sight. That has led to the bills for legal services being larger than one might otherwise expect or desire.

Most of our clients are no better at understanding or applying legal project management than we are. But in the future, the fact that you can actually do something on time and within budget is going to become an important indicator of whether or not you really are a good lawyer.

If you apply all its principles, LPM is not that scary, and it’s not that hard. Just getting people to understand it and do it is the biggest challenge.

According to the ALM Intelligence survey, firms that have begun to apply LPM, even in very limited ways, have already seen benefits. When the survey asked “Which of the following 13 benefits has your firm realized from its project management effort?” every single benefit in their list had been realized by at least 20% of the group. The most common benefit was “More productive relationships with clients” (achieved by 62%).

The ALM survey concluded that:

LPM can help bring increased effectiveness, reduce wasted time, and manage client expectations… Law firms can overcome [the] hurdles by targeting initial efforts in areas that would be most receptive, incrementally rolling out initiatives, and getting experienced help. Those that can successfully implement LPM will find over time that they gain a competitive advantage.

Altman Weil’s 2015 Law Firms in Transition survey has presented the most systematic evidence to date that greater efficiency pays off. They found that firms that had changed their approach to efficiency were more likely to report that revenue per lawyer was up (76% of firms that changed had increased revenue per lawyer vs 62% of firms that had not changed) and that profits per equity partner were also up for a higher percentage of the firms that had changed (76% vs 61%).

September 23, 2015

Legal project management: An opportunity for firms to gain a competitive advantage (Part 1 of 4)

Note:  This series is adapted from a chapter I wrote for a new book just published by the Ark Group entitled 2020 Vision: The Future of Legal Services.

For the previous edition of this book, I wrote an article entitled “Legal project management: A trend that is here to stay.” In the years since, all signs have pointed to its continued growth. But genuine progress in changing lawyers’ behavior has been slowed by controversy about the best way to implement legal project management (LPM), and even how the term is defined.

One thing is crystal clear: firms that improve LPM will have a competitive advantage because its growth is being driven by clients. In its 2014 Chief Legal Officer Survey, Altman Weil asked, “Of the following service improvements and innovations, please select the three you would most like to see from your outside counsel.”  They listed a number of concepts, including preventative law strategies, non-hourly based pricing structures, improved communication, alternative project staffing, and technology efficiencies. The three that clients picked most often were greater cost reduction (58%), more efficient project management (57%), and improved budget forecasting (57%). Since LPM leads to improved budget forecasting and to cost reductions, you could say that the top three client requests were LPM, LPM, and more LPM. 

And clients are frankly not impressed with what law firms have accomplished to date. The same survey asked participants to rate how serious law firms are “about changing their legal service delivery model to provide greater value to clients” on a scale from 0 (not at all) to 10 (doing everything they can). The median answer was 3, a ringing indictment of clients’ views regarding the inadequacy of the current level of effort.

From the law firm perspective, progress is being made. You know a topic is important when people start selling opinion surveys about it. That happened for this topic in 2012 when ALM Legal Intelligence released Legal Project Management: Much Promise, Many Hurdles, a survey report that included data on software, training, pilot programs, firm culture, influential stakeholders, staff, and much more.   

The first question they asked was, “Does your firm employ legal project management processes in its casework?” 51% said yes, 26% said no, and 22% were not sure. Is the glass half full or half empty? By the glacial standards of law firm change, this is significant progress. Just two or three years before, if you had asked this question, most lawyers would probably have replied “What is ‘legal project management?’” So the fact that a majority of this group was using LPM in casework reflected a significant change in a few short years.

Other surveys have found similar results. In the American Lawyer’s December 2014 report on its “Law Firm Leaders Survey,” Michael Heller, Cozen O’Connor’s CEO, summed it up very simply: “Law firms are being forced to completely change the way they practice law.”

When Altman Weil’s 2015 Law Firms in Transition Survey asked managing partners for their opinions on which of 14 current trends were most likely to be permanent, 93% put an increased focus on practice efficiency at the top of the list. That’s right, 93%. When have you ever heard of 93% of lawyers agreeing about anything?

But when the same survey asked, “Has your firm significantly changed its strategic approach to efficiency of legal service delivery?” only 37% said yes. (36% said no and the remaining 28% said changes are “under consideration.”)

93% of firm leaders think change is needed, and only 37% are doing something about it. What’s wrong with this picture?

As negative as these figures seem, in our day to day experience the reality is much worse. In many cases firms that say they have “changed their strategic approach” have done so only for a small sub-group within the firm or in a strategic plan which has not yet been implemented. In the trenches, the vast majority of lawyers are still practicing the way they always have. This should not be surprising, since LPM requires lawyers to change habits they’ve developed over decades, and no one likes to change.

In 1962, Professor Everett Rogers analyzed the forces involved in changing business behavior, and summarized his conclusions in an influential text entitled Diffusion of Innovations, which is now in its fifth edition. In this context, the most important idea is his argument that the people who adopt a new idea are distributed in a normal curve in several sequential categories which he called innovators (2.5%), early adopters (13.5%), early majority (34%), late majority (34%), and laggards (16%).

While it is impossible to prove exactly where LPM stands on this continuum, based on our experience talking to a wide number of firms, we strongly believe that LPM is at the early adopters’ stage. A small group of innovators has successfully proven its value, but the spread to others remains slow. Many law firms have done an excellent job at putting out press releases announcing that they are leaders in LPM. But when it comes to changing the way an entire practice group or firm does business, they have fallen far short.

The bad news is that clients want faster progress. The good news is that to win new business you just have to be a little better than your competitors, so law firms that have started down the LPM path have an enormous opportunity to get ahead of those who have not.

Glacial progress can produce new business when you are competing with firms that are making no progress at all. We were reminded of this when one client contacted us two years after we offered just-in-time LPM coaching at her firm. She reported that they had just won some new business as a result of using LPM. She went on to say that she had been frustrated by the slow pace of change in her firm, but in this case it did not matter because their competitors were even slower. “If you move like a turtle but you're racing a bunch of snails,” she said, “it all works out in the end.”

September 16, 2015

Legal project management software (Part 2 of 2)

By Jim Hassett, Steve Barrett, and Jonathan Groner


In Part 1 of this series, we argued that when it comes to LPM, lawyers should start by using the software they already have.

However, there is a growing sub-group of technically sophisticated firms who would like to learn what other firms have found in using LPM and pricing software (as opposed to what sales people say when they demo them).  In some cases, lawyers may legitimately conclude that new project management software would be helpful, especially in large complex matters, where most of the day-to-day software work can be handled by staff members rather than by lawyers.

Jason Ross, a consultant at PLA put it this way:

In general, software can help a law firm formulate and present a competitive price in an RFP or similar situation.  Software can also be very useful in tracking budgets to stay on target, in creating experiential data that is invaluable in arriving at a fixed fee or similar alternative fee arrangement, in figuring out the best possible staffing for a matter, in tracking dates and milestones, and in many other ways.

As the demand for LPM has grown, new options are constantly being developed and improved by major legal accounting software vendors and others.  There are also a large number of software programs available on the web that could be of use to lawyers, some of them free to anyone who knows how to use Google.

Which of these many programs should your law firm choose?  The answer depends on many factors, and today’s answer may be different from the one you will get six months from now, since the market is changing so rapidly.  That’s one main reason we formed a strategic alliance with PLA.  Their business is technology, and when firms ask us what technology is best, instead of saying “technology is not our specialty,” we now say “call ___ at PLA.”

While we cannot recommend a “one-size-fits all” software solution in a blog post like this, we can offer this general observation:   Proceed with caution.

In his book Smarter Pricing, Smarter Profit (p. 215)Stuart J.T. Dodds, Director of Global Pricing and LPM at Baker & McKenzie noted that:

Many of the initial LPM efforts failed … due [in part] to an initial focus on technology… [LPM software] was frequently difficult to learn and then apply to matters at hand, leading to lawyer frustration and limited adoption.

The kinds of problems that law firms have had with software are not surprising to IT professionals.  In other businesses, large and ambitious systems – such as Enterprise Resource Planning (ERP) software – have such a spotty history that a number of publications and bloggers have taken to compiling annual lists of the biggest ERP failures of the year.  (For example, see this list, and this one, and this one.)

An article in Information Week offered this explanation for the frequency of software failures:

No matter how you look at them, ERP and most other big application deployments are risky, difficult, and expensive. But much of the analysis on why these projects go awry misses the point. These are not technology projects; they're business transformation projects.

Similarly, an article focused on the failure of some CRM (Customer Management Relationship) software noted that one of the most common types of failure is that people simply don’t use the system.  Their proposed solution is quite similar to many of the ideas we have proposed for LPM:

Identify champions in each group, advertise success, and constantly reinforce your message in a long term campaign that doesn’t end when [the software] “goes live” in your company.

Still another article suggested that the best way to ensure success is to:  “Get users to focus on the What's In It For Me factor.”

These recommendations sound like common sense, but are often ignored.  Why?  I am reminded of what an editor told me decades ago when I was writing a psychology textbook.  I aimed it at students, but the editor said I needed to aim it at their professors:  “Textbook publishing is like selling dog food,” my editor told me.  “It doesn’t matter what the dog wants.  All that matters is what the dog owner wants.”  According to another article, similar cynicism is common among those who sell large software systems:  

Enterprise software still doesn't care about users. Its focus continues to be serving executives, rather than employees, because executives make buying decisions. 

So our advice to law firms on buying new software systems is simple:  take your time. 

For those who have already made a commitment to a new software system, according to another article, working with pilot groups to build acceptance is key:

Engage users early and often during the system planning and implementation phases, so they understand what's in it for them. When users do not adopt a system as planned, seek their honest feedback on how to make it more usable, helpful, and valuable.

Said another expert:

If you can't make your goal processes work with a test group of a few attorneys, secretaries and billing people, you clearly won't be able to make it work with the whole firm.

And once the pilot test is complete, consider this advice:

User education and training is necessary to overcome fear of change and prepare future users to take advantage of all the new system has to offer. Double your education and training budget (and make sure to spend it all)—it’s the best investment you will make in project success.

So if you are thinking about purchasing a new LPM software system but have not yet made a decision, first make sure that you are fully using the power of all the software the firm already owns, from advanced features of your accounting system to simple tools like Outlook.  Then proceed cautiously and spend time determining what your lawyers want and need. 

A law firm that invests in new software before partners ask for it is like a college that spends millions on a radical new type of gym equipment before learning what types of exercises students are most interested in, or even whether their students are likely to use the gym at all. 

Many software vendors are currently focused on developing new and better software for LPM and profitability analysis.  Every day that you delay the decision, your options will improve.

As PLA’s Jason Ross summed it up: 

You must put your needs before the software. You must first figure out what you need to do, and then ask, ‘What software fits this need?’ You will make a mistake if you go ahead and buy software and then try to force it into what you’re doing.

This post will be adapted for the fourth edition of the Legal Project Management Quick Reference Guide, which will be published next year.


September 15, 2015

My Ark webinar on the need for radical changes in legal marketing

Last June, when I published a Bloomberg BNA article entitled "Why Law Firms Must Change Their Marketing Priorities", I heard from more people than I had from anything I had written in years.  Some agreed completely, and some thought my argument was completely off-base.  So I decided to continue the discussion in an Ark webinar on Thursday, October 29.

I will moderate a panel discussion with three of the people I interviewed for the article:   Andréa Danziger (Director, Business Development and Practice Management at Loeb & Loeb), Geoff Goldberg (Chief Advancement Officer at McCarter & English) and Jennifer Manton (Chief Marketing and Business Development Officer at Kramer Levin Naftalis and Frankel). 

We will dig deeper into the issues raised in the article regarding how law firms have traditionally approached the "Four Ps of marketing" - price, product, promotion, and place - by focusing almost exclusively on promotion, and why that can be a mistake in today's economic environment.  Panelists will make the case that law firm marketing departments should increase their emphasis on improving the legal product through project management and pricing, and discuss how to balance that need against the resources required for traditional promotional activities such as events, advertising, websites, and brochures.

For more details, or to register for the workshop, contact Ark's Peter Franken at pfranken@ark-group.com or (312) 212-1301 or visit Ark’s web page.

September 09, 2015

Legal project management software (Part 1 of 2)

By Jim Hassett, Steve Barrett, and Jonathan Groner


In our experience, when lawyers get serious about legal project management (LPM), the first question many ask is, what software should I use?

For most lawyers, that is the wrong question. You should start by looking for low-hanging fruit, and instead ask, “What can I do today to provide clients with greater value and to protect profitability?” You can’t know what software would help until you first figure out exactly what you need to do.

In our recent survey of AmLaw 200 managing partners and other leaders, we asked “which of these LPM issues do you consider most critical for client value and/or profitability in the short term?”:

  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
  6. Manage quality
  7. Manage client communication
  8. Negotiate changes of scope

As one managing partner summed it up:

There are two that I would rank the most critical: the setting of objectives and scope, and managing client communication and expectations. Those, to me, are linked at the hip. You really have to understand what the client’s expectation is, and you also have to have a good relationship to be able to tell them whether or not their expectation is real and achievable. A lot of things can happen in litigation that can change the scope of an engagement. You can run into difficult parties and unforeseen problems, and that’s where an understanding between you and the client has to be solid enough that you can have those kinds of conversations and work your way through it.

Most respondents agreed with him.  50% said defining scope was most critical and 38% named communication, making these the top two issues named in our survey.  Note that these two critical issues involve changing lawyers’ behavior, and buying new software will not help.

Scott Rosenberg is Corporate Counsel and Solution Group Leader at Project Leadership Associates (PLA), the largest US business and technology consulting provider focused on the legal market.  (Full disclosure:  PLA and LegalBizDev are strategic partners.)  One service they provide is helping law firms select and install software, but Scott does not recommend starting there with LPM:

The legal industry is undergoing change, and clients want law firms to have more formalized processes such as LPM. But law firms are just groups of individuals, and it’s much more important to start by changing individual behavior. That has proved very hard to do if the firm jumps right into new technology. You definitely need to learn to walk before you can run.

For any management problem, the solution will involve people, process and technology.  For LPM, process is the most critical element, not technology. Our approach is to view software as merely a tool to support best practices and behavioral changes by attorneys.

Indeed, focusing on software too soon can be a distraction.  Any law firm COO or head of IT will tell you that busy partners have a very limited bandwidth for learning new software or technology, as seen in past conversions of accounting systems, WordPerfect to Microsoft Word, GroupWise to Outlook, new voicemail systems, CRM, knowledge management, and other roll-outs. Most senior law firm administrators will also agree that partner appetites for the training and behavioral changes necessary with new technology fall somewhere between limited and non-existent.

The good news is that if you work at a large firm, you probably already have accounting software such as Elite, Aderant (formerly CMSOpen), or another system that has under-utilized capabilities to provide cost estimating aids, load matter budgets, task assignments and responsible parties, and provide periodic or ad hoc reporting on time/dollars worked/ billed/remaining/collected.  It may also have the ability to calendar and track matter sub-tasks and to generate budgetary or deadline alerts.

And let’s not forget the powerful calendaring, meeting scheduling, and individual or shared task and “To Do” tracking capabilities available even in the oldest versions of Outlook.

Once you master all the existing features, if your software is an older version, the firm may ultimately be required to upgrade or update the software at an additional cost or purchase add-ons to provide the scoping, budgeting, calendaring, tracking, and reporting you’ll need. But at least you won’t have to double-clutch when you want to integrate your project management approach with the firm’s existing accounting time and billing data.

These programs may not have the sophisticated critical path and dependency analysis capabilities that come with powerful project management packages, but they can output data and reports in formats usable in Excel or PowerPoint. In most cases, once the overall scope, detailed tasks, timeline, and responsibilities are delineated for a new matter, an experienced partner can quite easily see which tasks depend upon the completion of prior tasks and which do not.

Paula Uscian, director of quality assurance at PLA, offered this example:

One important step in LPM is simply to develop a checklist for all associates to do discovery in the same way, a way that ensures predictable results and saves considerable time, effort and money. But you can create this checklist in a Word document.  Similarly, Excel can do budgets and spreadsheets, and law firms already have those programs. In fact, some lawyers are becoming more aware of these capabilities, and using  Excel’s presentation and workflow tools.

When law firms were adopting knowledge management systems, we told them that the solution was not the technology. The technology was only a tool.  Precisely the same thing is true with LPM. There are very useful software programs available, but we advise clients to first look at the tools that they already have and to leverage the investments that they have already made in software, without buying anything new.

This series will be adapted for the fourth edition of the Legal Project Management Quick Reference Guide, which will be published next year.


September 02, 2015

Tip of the month: Develop a formal communications plan

To improve the flow of communications within your legal team, develop a simple chart showing who should talk to whom, about what, and when.  For example, the firm’s responsible partner could provide a weekly status email to the client’s lead lawyer on each important matter, and associates could have a daily five minute meeting or call with the lawyer supervising their work. 


The first Wednesday of every month is devoted to a short and simple tip to help lawyers increase efficiency, provide greater value to their clients and/or develop new business. Several sample communication plans appear in the third edition of my Legal Project Management Quick Reference Guide.