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5 posts from February 2016

February 24, 2016

The evolving role of directors of legal project management (Part 3 of 3)

By Jim Hassett and Jonathan Groner

In addition to pricing, several of those interviewed stressed process improvement, as in these examples:

I spend most of my time working with practice group leaders and individual partners to identify problems and opportunities for increased efficiency for the firm.

My major goal is to educate the lawyers on process improvement solutions, to make their jobs easier.

My chief goal is to help attorneys constantly plan their matters well and to think of new ways to do the firm’s work. This is particularly useful in IP, because patent and trademark prosecutions often involve the same steps repeated in the same way, so careful attention to each step can save time and effort.

Our major achievement has been to teach lawyers how to deliver legal work in the most efficient way through process maps which show the most efficient paths to achieve a variety of legal goals. For clients, the results are reduced costs, greater predictability and transparency, more efficiency, better use of technology, and better legal and business outcomes.

Several people we interviewed also mentioned their role in helping lawyers to think more clearly about profitability:

My group has helped introduce the concept of profitability of a particular engagement into the law firm’s thinking. Profitability is not the amount that is billed; it is, broadly speaking, what remains after paying associates and everyone else who is involved in the matter.

A few mentioned improving communication. One said that:

The major advantage of LPM is to improve communications between the firm and its clients so that the client can understand what is going on at all times. We also use end-of-case reviews to evaluate what we did right in a case and what could be improved.…Through the appropriate use of LPM, I believe our firm can improve its realization by two percent annually on a consistent basis.

Several talked about working directly with clients, as in these examples:

My work is heavily client-driven, since the firm’s clients are much farther along in their understanding of value and efficiency than some of the partners are. My role is to be a liaison between the firm’s clients and its partners…. The firm’s partners let me work directly with clients and understand what makes them tick. My job is to work with each client and to find out exactly what they’re looking for from us. Do we want to partner with our clients to utilize new technology and to take advantage of innovation? Do we want to propose arrangements based on reduced rates and still remain profitable?

For the next year, my priority is to increase my visibility in client meetings—attending them more often and serving as more of a support system for the partners.

Whether it’s the result of differences in firm culture or in the way that LPM director roles have been defined by management, there are differences in the degree of lawyer acceptance. On the positive side, one respondent reported:

While there are pockets of resistance, they are not vocal or persuasive.

More commonly, there was greater resistance to LPM:

In my director role, I need to have a thick skin vis-à-vis the attorneys. You are talking about people who have worked the same way for years. You can’t force people to change.

My most important challenge is building relationships with the partners and developing their trust.

The biggest barrier to success is the need to instill a sense of urgency among the attorneys. 

My major obstacle, in addition to technology, is dealing with a subset of partners who want to do things the way they have always done them.

I have a real question whether most lawyers have the resiliency to make changes in the way they practice law.

Another common theme was that the resources available for LPM are too limited. Indeed several directors described lack of time as their single biggest problem:

The biggest obstacle to achieving my objectives is the number of hours in a day.

Everyone is too busy. I just wish I had more time to show everyone the framework that’s in place. 

We know that our clients all over the world are interested in budgeting. We need to have the resources available in our department to answer all these client questions. 

The question is, how do we staff everything when we have so few people to achieve all our goals?

This high demand is a good thing in that it proves that LPM directors are making progress in showing attorneys the benefit of LPM. But it also implies that going forward the biggest questions for firm management will be how much to invest in LPM and which activities produce cost-effective changes most quickly.

Our 15 interviews revealed 15 approaches to these tactics, some of the differences subtle and others quite significant.

To those views we would add a 16th opinion about what works best, based on our experience working with a number of firms. Our general approach is summarized in our article “LPM: An evolving process” in the February issue of Managing Partner magazine. As we wrote there:

Too many firms act as if hiring an LPM director and/or a pricing director will solve all their problems. This is clearly part of the solution for many firms, but it only works if partners are committed to changing their approach.

LPM and pricing directors are hungry for information about what works and what doesn’t.  A number of thought leaders have banded together to form the True Value Partnering Institute , described on its web page as “an invitation-only virtual Think Tank… [which organizes] Cohorts which meet several times via one-hour conference calls and can also participate in specialty topic Sub-Groups to collectively explore topics of interest.”  For example, their “Legal Project Management Leaders” Cohort has a sub-group devoted to “Defining the Role and Measuring the Value of a Legal Project Management Director.”

As a result of our interviews, we recently expanded our LPM Acceleration Program to include a wider variety of services to support in-house LPM directors, as well as access to the proprietary scripts and guidelines we have developed over the last several years.

Whether a firm accepts our recommendations or those of others, the most important conclusion from this research is that firm management must play an active role in defining the best way to implement LPM. Fundamental questions regarding the firm’s business approach to profitability and client satisfaction are simply too important to be delegated.

As we reviewed all of our findings, the good news was that these 15 firms and many others are devoting significant resources to meeting client demands for greater efficiency, and that all of them are making progress.

But there is still a great deal of work to be done and LPM directors currently disagree about the best approach to using limited resources. The challenge is to find the tactics that will produce the greatest benefits for each firm, in the most cost effective way possible.

All this at a time when the pace of change needs to increase. In our survey of Client Value and Law Firm Profitability, when we asked AmLaw 200 leaders, “Will firms have a competitive advantage if they change more quickly?” 85% said yes, they would.

At the end of the day, the burden is on the partners who own each firm and on the firm’s management committee to review all the conflicting opinions about LPM tactics and make the best decisions they can in an uncertain environment.

The stakes are high. As one senior executive in our AmLaw 200 survey (p. 11) put it:

I think the market’s going to shake itself out. [And] I think [firms] that can’t do this will fail.

 

A white paper which summarizes this entire series, and describes our LPM Acceleration Program can be downloaded from our web page.

February 17, 2016

The evolving role of directors of legal project management (Part 2 of 3)

By Jim Hassett and Jonathan Groner

On the most fundamental level, the 15 people we interviewed had different definitions of what an LPM director is responsible for. This is not surprising given widespread disagreements about the very definition of LPM.

This lack of consensus can be seen in the name of the most influential professional conference in this area, the Legal Marketing Association’s (LMA) P3 conference. When the first P3 conference was held in October 2013, the LMA website listed the 3 Ps as pricing, practice innovation, and project management. The second P was later changed from practice innovation to process improvement.

No one has asked us our opinion about the name of the conference, but if they did we’d say that the best title would be the simpler term “legal project management,” since both pricing and process improvement should be considered subtopics under LPM. (For more on our view of LPM’s broad definition, see Chapters 2 and 3 in my book LPM, Pricing, and AFAs.)

This disagreement can also be seen in the titles of the people we interviewed—eleven included the word pricing and two included the phrase process improvement. This difference is more than just semantics. It reflects the fact that law firm management has hired people with different goals in mind, and as a result their efforts have focused on different tactics.

When we asked people to define their job, here are some of the answers we got:

My role has evolved from training, in which I worked to acclimate lawyers to the idea of LPM, to an operational role putting LPM into practice.

In my earlier days here, my time was focused on building an awareness of project management at the firm through education and training. Now we are moving to become a group that acts as an internal consultant to the attorneys.

My first assignment was to diagnose and evaluate what the firm was doing well and not so well in LPM. Now my two main roles are counseling partners on budget and management for prospective and ongoing matters, and looking at process improvement.

My role is 50/50 pricing and LPM, and I supervise people in both areas.

Fifty percent of my job is creating fee estimates for each project based on a questionnaire that I give to all people who are billing on the matter. The other 50 percent is more like “billing hygiene,” in which I make sure that the firm’s billing protocols are being followed and that bills are being sent on time and in the right format.

I have three roles: helping lawyers create budgets and partnering with them on pitches; managing existing matters as part of a client team in an ongoing case; and developing firmwide awareness of the firm’s LPM program.

The theme most often reflected in both job titles and job descriptions was pricing.

In 2012, we wrote an article for Bloomberg Law Reports entitled “The Rise of the Pricing Director.”  At that time, despite extensive networking, we were able to find only a handful of people who held the title of pricing director in a law firm or performed that function. Law firms generally move a little slower than glaciers, but the growth in pricing directors has been meteoric. According to a 2014 survey by ALM Legal Intelligence, just two years after our article, “Seventy-six percent of big firms now employ some sort of pricing officer. And these positions are in the midst of a remarkable growth spurt.”

With 20/20 hindsight, it is easy to see the reason for the rapid growth of the pricing director title and function. The well-documented changes in the legal profession over the last few years have placed intense pressure on profits. It is therefore not surprising that a new group of high-level executives has emerged to help law firms set their prices in a way that will help them to maintain profitability.

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?

In our interviews with 15 LPM directors, we found far more attention devoted to pricing before the fact than to managing after the fact. For example, one respondent described the main LPM responsibility as:

Working directly with attorneys on pricing proposals. When I started, many partners were skeptical about LPM and alternative pricing strategies, but now I get half a dozen phone calls a week from attorneys who want my help. Some are from the attorneys whom you’d least expect to be interested.

Said others:

I spend a good deal of my time advising lawyers about fee arrangements and about what to do in response to client requests. We work closely with the marketing department, especially when it comes to RFP responses.

One of our major initiatives is to incorporate budgeting into the RFP stage of every matter so that the budget can be incorporated into the proposed pricing. This would make RFP responses better and more efficient and would lead to an immediate return on investment.

Partners are under constant pressure from their clients to do more detailed budgeting and more creative pricing to meet client needs. We need to keep up the level of creativity and sophistication in our pricing.

A much smaller number of the people we interviewed mentioned internal management, as in these examples:

Our focus to date has been on pricing and AFAs, but I expect to focus on other aspects of LPM very soon.

My goals for the next year are to improve monitoring of ongoing matters, to ensure that every aspect of a case can be tracked efficiently, and to ensure that the partners have the tools and capabilities to have conversations with their clients about management and risk trade-offs in their cases.

While both better pricing and internal management will improve financial results, in our opinion more emphasis on improving the management of existing matters would lead to a faster financial return.

In an influential book entitled “Growth is Dead,” Bruce MacEwen has written about:

“Suicide pricing” in response to RFPs. These are bids—from name-brand firms, mind you—that are so breathtakingly low one wonders how they could possibly make any money. The short answer is they can’t.

Why do firms bid so low? Because they have too many lawyers and not enough work.

In the most recent Law Firms in Transition Survey, Altman Weil asked, “Are each of the following lawyer classes in your firm sufficiently busy?” The answer was no for a majority of partners (53% of equity partners and 59% of non-equity partners).

The result is lower prices. As one AmLaw 200 managing partner put it in our research on Client Value and Law Firm Profitability:

Sometimes we know a matter is not going to be profitable, but we take it anyway because we’ve got overcapacity that we’re not going to be able to get rid of quickly. It’s not profitable, but it’s more profitable than zero.

In this era of dog-eat-dog competition, firms sometimes have little control over pricing. But once the price is set they CAN control how the work is done. So why do so many firms concentrate on pricing before internal management? Starting with pricing is a practical way to get attorneys to begin to utilize and appreciate LPM.  Accurate pricing starts with better communication in both directions:  law firms must better understand client goals and client must better understand the cost of developing and implementing various legal strategies.  Risk assessment, efficient use of internal and external resources and much more are all part of the process.

But it’s a whole lot easier to get lawyers to agree to a budget than it is to get them to live within it, so LPM directors also need to help lawyers change their behavior, which is a major challenge.

Next week, in the third and final part of this series, we will discuss other tasks performed by LPM directors and the implications for firm management.

 

February 15, 2016

A preview of the fourth edition of our Legal Project Management Quick Reference Guide

When the third edition of our widely used collection of LPM tools and templates was published a few years ago, here’s what some of the best known experts in the field had to say:

“Every partner should read this book.” – Toby Brown, Chief Practice Officer, Akin Gump

“Not only will every lawyer benefit from this book, but so will those who provide support to practitioners.”  – Kim Craig, Global Director of Legal Process Improvement, Seyfarth Shaw LLP

“This book demystifies LPM, providing tools that lawyers can actually use.” – Stuart Dodds, Director, Global Pricing and Legal Project Management, Baker & McKenzie

As the field has grown since then, we have continued to develop new tactics and job aids to help lawyers increase efficiency and client satisfaction.  Last week, we released a preview of the fourth edition that includes over 100 pages of new tools and templates.  This special preview is now being used by our coaching and training clients, while we solicit advice for improvements from a distinguished board of advisors from over 40 firms, and finish researching and writing a few more templates on some of the hottest topics in LPM including pricing, task codes and Agile.

After we add the finishing touches, the fourth edition will go on sale in October 2016.  If you’re not in one of our coaching or training programs and don’t want to wait until October to get started, we are selling a limited number of copies of the third edition for $99 (a 75% discount from the original list price of $395 per copy), plus shipping and handling.  As in the past, this book will be sold only to law firms and to select in-house counsel and only through this web page.

 

February 10, 2016

The evolving role of directors of legal project management (Part 1 of 3)

By Jim Hassett and Jonathan Groner

As recently as five or six years ago, it was easy to calculate the number of law firms that had hired directors of legal project management (LPM): zero. As the field has grown in the last few years, it has gotten much harder to get a precise count. But there is no doubt that the number is growing.

As Hildebrandt Consulting and CitiPrivate Bank reported a few weeks ago in their 2016 Client Advisory:

An increasing number of law firms are making greater use of project managers, who are tasked with helping partners determine necessary resources, stay on budget and avoid scope creep. We expect to see greater use of project managers, as well as pricing specialists, to help partners understand the true cost of running a matter (p.10).

However, there is a great deal of uncertainty about the job description for these new positions and about how well different tactics are working. To gain insight into these critical issues, we recently interviewed 15 people who currently perform the role of LPM director:

  • Kim Craig, Global Director, Legal Process Improvement, SeyfarthLean Consulting
  • Stuart Dodds, Director of Global Pricing and LPM, Baker & McKenzie
  • Pete Elliott, Director of Legal Project Management, Benesch Friedlander
  • Chris Ende, Managing Director for Pricing and Project Management, Goodwin Procter
  • Alex Erines, Pricing and Project Manager, Crowell & Moring
  • Bart Gabler, Director of Pricing and LPM, K&L Gates
  • Keri Gavin, Director of Pricing and Project Management, Winston & Strawn
  • Bree Johnson, Director of Value Pricing and LPM, Stinson Leonard Street
  • Rick Kathuria, National Director of Project Management and Legal Logistics, Gowlings
  • Jennifer Mapp, Director of Pricing and Project Management, Dechert
  • Linda Novosel, Chief Pricing and LPM Officer, Steptoe & Johnson
  • Melissa Prince, Director of Pricing and Legal Project Management, Ballard Spahr
  • Peter Secor, Director of Strategic Pricing and Project Management, Pepper Hamilton
  • Tom Snavely, Manager of Legal Process Improvement and Project Management, Faegre Baker Daniels
  • Kathleen Thompson, Strategic Pricing Analyst and Legal Project Manager, BakerHostetler

To maximize the frankness of their responses, we promised that while their names would be listed in the article, every quote we used could be reviewed by them in advance and none would be attributed to a particular person or firm.

We were quite surprised by the wide range and the variability of the responses.  After reading and re-reading the interview summaries several times, our main conclusion was that there is a striking lack of consensus both on what the LPM director role should be and on what works best.

If we had interviewed 15 law firm executive directors or CFOs about their jobs, we would have expected to find some variations among firms but an underlying foundation of consistency on the central role. We did not find that kind of consistency here.

If, based on these interviews, we summed up the state of the art of law firm LPM directors’ role in a single word, the word would be “pioneer.” Like the pioneers in the American west, some are likely to end up with greater success than others. Which tactics work best? There is no shortage of consultants who will provide advice on this important question (including LegalBizDev; we are guilty as charged). But in this time of great change in the legal profession, a consensus has not yet emerged.

The people we interviewed did strongly agree on the benefits of LPM. As two interviewees put it:

Clients are more interested than ever before in requesting data from lawyers and in talking about costs and budgets and the value that they receive from the lawyers’ work.

LPM improves the client experience by driving efficiency and value.

Indeed, LPM helps not just with clients but with the way lawyers perceive their work:

The client feels it is getting good value and the lawyers feel that they are improving the way in which they work.

But there is much less agreement about how to get from here to there. For example, consider the role of LPM directors in selecting and supporting new software. One described the main goal for 2016 as:

Expanding our software program and showing firm management some quantifiable results from its use.

Several others also felt this was the most important aspect of their job:

Our main achievement to date has been to build an in-house software tool based on Excel that the lawyers can use for project management.

One of the first things I did after accepting this position was to look for software that would help the firm’s lawyers answer LPM questions. But we haven’t yet found software that satisfies our needs.

Our biggest challenge centers on the lack of technology in the market. There are a great many software packages on managing to budget but very few or none that put together all the pieces of LPM, including staffing and document management as well as budgeting. So our firm built a budgeting and tracking system internally from scratch…. This took a full year. We are very pleased with the results. Not all the partners are using it, but a fair number of partners are on board and at least use some pieces of this tool.

In reviewing these comments and other off-the-record conversations, we were reminded of the split of opinion regarding software that we reported in the book Client Value and Law Firm Profitability, based on interviews with AmLaw 200 leaders, including this negative example:

We spent an incredible amount of time and resources coming up with a very sophisticated reporting system that would allow people, with a couple of clicks through our intranet, to go into any particular matter that had a budget, and see down to the timekeeper and task level, exactly how they were doing. Nobody uses them, as far as we can tell—literally, nobody. All they care about is the high level. Lawyers want an email once a week saying, where am I with my budget? They don’t care about the more detailed information (p. 118).

Perhaps that is why one LPM director described an important part of the job as:

Handling the firm’s roll-out of LPM technology effectively, since lawyers resist using technology unless it works well the first time.

And while some we interviewed emphasized their role with software, others did not mention it at all.

In parts 2 and 3 of this series, we’ll discuss other tasks performed by LPM directors and staff.

February 03, 2016

Tip of the month:  Focus on improving personal time management

If you are one the lucky people who is already good at managing your time, stop reading this post.  For everyone else, there is no better way to increase efficiency than to improve your personal time management.  So type “time management” into Google and start looking for tips that fit your needs, or buy the Time Management Handbook for Lawyers: How-to Tactics That Really Work by LegalBizDev’s Gary Richards.

The first Wednesday of every month is devoted to a short and simple tip like this to help lawyers increase efficiency, provide greater value to their clients and/or develop new business.