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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.

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