Legal Business Development and Project Management

LPM Case Study: Hanson Bridgett (Part 1 of 3)

By Jim Hassett and Jonathan Groner

 

“The law firm of the future will require many new skills that were never taught in law school,” according to Andrew Giacomini, the managing partner of Hanson Bridgett, a northern California law firm with more than 150 attorneys in four offices. “That’s why we have decided to make a significant investment in training our lawyers in legal project management (LPM), value pricing, and leadership training, to enable them to be more successful.”

This series of posts discusses the process and results of the LPM portion of Hanson Bridgett’s training, which began in July 2013 when partner Garner Weng and Chief Information Officer Chris Fryer organized a group of 11 attorneys to compare several variations of our LPM coaching program.

Most of the firms we work with these days concentrate on two months of one-to-one LPM coaching, which looks for “low hanging fruit” and applies LPM to ongoing real-world engagements as explained in several previous case studies in this blog and on our web page. The one-to-one approach allows any number of lawyers to begin whenever it is most convenient. However, the best approach for any given firm depends on its culture and its needs, and based on the results with their first group, Hanson Bridgett decided to organize the coaching into groups, beginning each with a just-in-time training workshop on LPM. At the end of the two months, each lawyer also had the option of completing a third month. (Only a few have exercised that option, but everyone seems to appreciate having it available.)

Based on the success of the 11 in the pilot test, they offered this LPM program to 13 more lawyers beginning in April 2014 and then another 14 starting last March, for a total of 38 to date. Fryer expects to keep offering this program until he has offered it to all the lawyers who could benefit, with “sessions for 10-14 lawyers about once a year in the future.” The program has been helpful to a wide range of lawyers, including some of the most senior partners in the firm.

Larry Cirelli is a senior trial lawyer and business litigator. In addition to his business litigation practice, he is frequently asked to step in and assist when the firm goes to trial in almost any type of matter.

“I have always applied certain principles that I would call LPM,” says Cirelli. “For example, I always ask the client at the start of a matter, ‘What are your goals? What is your ideal resolution of the matter?’ Then I create a plan to attempt to achieve those goals. I use an Outlook task list in part to do so. Outlook allows you to set deadlines and relate each item on the list to the overall strategy of the case. But just because I’ve been doing this all along doesn’t mean I can’t improve. There are always better ways to do things.”

Cirelli says that as a result of his LPM coaching with Mike Egnatchik, he streamlined his task list, added subfolders to break down tasks more precisely, and added management objectives such as ticklers to stay in touch with clients on a regular basis.

Also in the coaching, Cirelli discussed the way he handles certain cases all over the United States for a major client – cases that tend to follow a pattern. He then worked with John Murphy, Hanson Bridgett’s senior value pricing specialist, to set up budgets for these types of matters. As Fryer explained, the pricing position was created in December 2014 to “improve budgets for AFAs and hourly matters in order to make our budgeting approach more professional and ultimately more profitable.”

According to Cirelli: “Working with John, we set up budgets for these cases using the information we had gleaned from completed cases to guide us with regard to the time needed for each specific task. So we were able to say for each case, ‘Did we/could we go over budget? If so, why? Did we underestimate anything? Can we provide service to the client in a more efficient manner?’” Using these budget templates, he was able to reassess and rebudget some of the eight ongoing cases. “In each case we sent these budgets to the client and the client was very pleased with this approach.”

“The whole training process has made us more efficient in handling all these cases and it has made me more productive,” Cirelli concludes. “You can never stop learning and improving. And although I already had my system of project management, now that we have the technology to use LPM, it helped me make my system more efficient.”

 

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

 

The urgency of change

The topic of the most cost-effective way to implement LPM remains controversial. We recommend beginning with a pilot test to change the behavior of a few influential partners, so they can become internal champions for more substantial changes. It would take a much longer article to completely explain our approach and how it compares to others.

But there can be no doubt that clients are demanding change. In my Client Value and Law Firm Profitability survey, when I asked “Will firms have a competitive advantage if they change more quickly?” 85% said yes. (10% said they didn’t know and only 5% said no.)

In business, success starts with meeting client needs. And, as the managing partner of one firm in my research put it:

The vast majority of lawyers in the big law firm environment have to be focused on LPM, otherwise they’re just not going to be successful in bringing in the work. I don’t care how much of a quality practitioner you are; there are very few practice areas that are so insulated that general counsel are not evaluating every firm they’ve worked with for 30 years to say that maybe it’s time to make a switch.

LPM will be beneficial in both hourly and non-hourly work, but law firms see the need for LPM most clearly in alternative fee work where a budget overrun comes directly out of the firm’s bottom line. The same managing partner went on to say that:

You can’t do the alternative fees unless you really understand what your client’s objectives are. You really have to have a game plan for how you’re going to accomplish them, and you have to have management in place to ensure that you’re consistent with the plan. So whether you call it project management or something else, you need to be constantly focused on what kind of fee arrangement you have in place and how you’re going to ensure that it meets the client needs as well as the law firm needs. You can’t agree to these alternative arrangements and continue to do business as usual. It doesn’t work.

As the number of firms experimenting with LPM rises, the competitive bar will continue to go up.

When I published an article for Bloomberg Law on LPM and marketing two years ago, Wendy Tucker, director of marketing and business development at Seyfarth Shaw, said she had seen “a dramatic change, and a very recent change, in the questions that we are asked by clients.” In the past, “in the RFPs that we received, we rarely saw any questions about project management. Then, the question was whether we had project managers at all. Now the question is ‘How will you apply LPM in practice to our work?’”

Most of the law firm leaders I interviewed for my survey believe that the world has permanently changed, like the managing partner who said:

The way law firms deliver legal services to clients is undergoing a huge revolution. It’s going to change before our eyes in the course of a very short period of time. And it’s all being driven by clients who want to get value for their money.

As the chair of another firm summed it up:

I believe that we’re still in the beginning of the process. There are a number of famous economists who have talked about disruptive technologies and disruptive business processes. I think there’s a lot of evidence out there that this profession is being subjected to those pressures. Five years from now, if I turn out to be wrong, that will be great. But if I’m right, then I have to believe that those firms that adapt more quickly will have a competitive advantage, because the firms that don’t adapt quickly enough will be out of business.

Legal project management: An opportunity for firms to gain a competitive advantage (Part 3 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.

Definitions

While there is widespread agreement that clients want LPM and that it can pay off for firms, the field is so new that experts still disagree about exactly what should be included and excluded from its definition.

In one sense, any lawyer who has ever planned a budget or managed a team has served as a legal project manager. But clients are now choosing law firms based on their ability to apply a more systematic and disciplined approach to management that delivers more value, more quickly. The devil is in the details of exactly how to do that.

This has slowed LPM’s progress, as seen in the remarks of this law firm leader from my survey on Client Value and Law Firm Profitability:

We were just at a board meeting last week where we were talking about whether we should do formalized project management training. My answer to that is obviously yes, we absolutely should. But first we need to agree on what legal project management is.

Some experts prefer a narrow definition built around timelines and budgets, the type of planning that is familiar to anyone who has ever used Microsoft Project. People in this narrow definition group want to draw lines in the sand to clearly distinguish LPM from related areas such as pricing, knowledge management, and process improvement.

In my book Legal Project Management, Pricing and Alternative Fee Arrangements, I reviewed the short history of this controversy and argued for a much broader definition:

Legal project management adapts proven management techniques to the legal profession to help lawyers achieve their business goals, including increasing client value and protecting profitability.

It is an umbrella term that includes budgeting, communication, process improvement, knowledge management, time management, and much more. We also divide LPM into eight key issues as shown below:

Eight Key Issues in Legal Project Management Set objectives and define scope—You must know exactly what is included in the assignment, and what is not. Identify and schedule activities—After scope is clearly defined, the next step is to break down a complex matter into smaller tasks and to schedule them. Assign tasks and manage the team—To maximize efficiency, the right people must be assigned to the right tasks, and performance must be monitored. Plan and manage the budget—Estimating and controlling costs are a challenge in every profession, and this is the most critical area for many lawyers. Assess risks to the budget and schedule—What can you do at the beginning of a matter to mitigate risks and increase the chances that work will be completed on time, within budget? Manage quality—Most lawyers are very good at delivering high quality legal work. However, this becomes more challenging when schedules change and budgets get reduced. Manage client communication and expectations—This is extremely important to clients, and it is an area where many lawyers have room to improve. Negotiate change orders—No matter how well lawyers manage legal matters, sometimes things change. The issue here is deciding when and how to negotiate these changes with clients. © Copyright 2009, LegalBizDev

In contrast, some legal project managers organize their efforts around the five processes identified in the Project Management Institute’s handbook, A Guide to the Project Management Body of Knowledge:

• Initiating
• Planning
• Executing
• Monitoring and Controlling
• Closing

These cover the same concepts our eight issues do, but in our experience, lawyers grasp LPM’s relevance more quickly when it is framed in terms of the eight issues listed above.

In the end, however, any definition of LPM is better than trying to ignore the challenge. Hair splitting over what is and is not LPM can become just another excuse to avoid action. Law firms need to move as quickly as possible to the real problem: What must we do today to meet client needs while remaining profitable?

 

Tip of the month: Track hours for work that is out of scope

At the beginning of each matter, everyone on the team should be given a clear explanation of what type of work is included in the engagement, and what is beyond scope.  To meet client needs, it may be necessary to perform some work that is beyond the scope of the agreement without getting client permission first.  But when this occurs, the lawyer who performs the work should track those hours separately (whether with a formal task code or some informal system) so that the responsible attorney can tell the client exactly what was done, why, and how much it cost. 

 

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. For background on this tip, see my post “How to track legal work that is out of scope.”