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4 posts from January 2017

January 25, 2017

Engagement letters and statements of work

At the beginning of a new matter, lawyers often specify its scope and fees in an engagement letter. The engagement letter is designed to clarify exactly what work and services are included, and excluded, from a particular matter.

Some states have specific requirements for what must be included in an engagement letter, and many firms have their own requirements as well. For example, in New York State, Part 1215 of the Joint Rules of the Appellate Division requires a letter of engagement in most matters, except for certain exceptions listed in the rule (i.e., an engagement letter is not required if the fee is expected to be $3,000 or less).

From a project management point of view, there is considerable room for improvement in many engagement letters. Consider, for example, this language from the sample letter of engagement published by New York State:

Scope of representation

A claim, dispute or dealings with relating to ______________.

All of our services in this matter will end, unless otherwise agreed upon in a writing signed by us, when there is a final agreement, settlement, decision or judgment by the court. Not included within the scope of our representation are appeals from any judgments or orders of the court. Appeals are subject to separate discussion and negotiation between our firm and you. Also not included in the scope of this agreement are services you may request of us in connection with any other matter, action, or proceeding.

The rest of New York’s two-page sample focuses on fees and client rights. Fee options for the sample include a flat fee, a contingency, or hourly rates.

If a law firm copied the New York State sample exactly and negotiated a fixed fee, they might end up being very sorry when the matter spiraled out of control. They would be better protected if the engagement letter specified timelines and deliverables, such as the maximum number of interviews, pleadings, interrogatories, opinions, and reports, the anticipated scope of travel and research, the use of outside consultants, and so on.

Could a lawyer possibly know in advance how many depositions would be required to settle or plead a particular case? Of course not. But he or she could specify the maximum number of depositions they expected and exactly what would be included within the fixed price.

This failure to provide sufficient detail is quite common. As the executive director of one AmLaw firm recently put it, “The scope of work often contained in our engagement letters is generally no more than one or two lines. Lawyers are missing an opportunity to clearly specify the scope of what is included in each matter and what is not.”

From the client perspective, better specifying the work up front could lead to more predictable costs and a more sophisticated understanding of what they are paying for. From the law firm’s point of view, it could reduce fee disputes, write-downs, and write-offs.

Entire textbooks have been written on how to develop what project managers call a statement of work (SOW), which specifies what a particular project includes and excludes. Lawyers may wish to adapt some of these ideas and write an SOW which could either be included in the engagement letter or be a separate document, depending on the nature of the matter, the lawyer-client relationship, and joint expectations.

 

This post was adapted from the recently published fourth edition of The Legal Project Management Quick Reference Guide.

January 18, 2017

How Agile is being used to increase legal marketing innovation at Fasken Martineau

Agile is a highly flexible approach to project management which law firms are just starting to use. I’ve written several posts in this blog about how Agile works and how some lawyers are applying it to improve legal efficiency by focusing on two key questions:

  • How can we deliver value more quickly to our clients?
  • How should we measure our progress?

So when I heard recently that one of our clients was using Agile techniques to increase innovation in their marketing and business development department, I immediately scheduled an interview with Brenda Plowman, the Chief Marketing Officer (CMO) at Fasken Martineau, an international business law and litigation firm with more than 700 lawyers.

The Fasken Martineau marketing and business development department includes people operating from eight offices, six in Canada, one in the UK, and one in South Africa. Plowman has worked in the department for more than 10 years. When she was promoted to the CMO position in July 2015, she noted that:

Over my history here I’d seen many underutilized talents with the potential to help us transform and offer better services to our lawyers. I wanted to reinvent our group. But how could I get people to change when I was coming to work at the same place and with the same people I’ve known for a long time?

We did a survey of the marketing and business development team because we wanted to see what they were thinking. One of the responses was, "The firm doesn’t ask us to innovate enough. It doesn’t expect us to be creative." People didn’t feel that they could bring their ideas forward and they felt that, frankly, they weren’t expected to bring their best game.

Plowman decided to start by adapting two Agile-related concepts: hackathons to creatively generate ideas for improvement and scrum to deliver them and “make sure we were actually accomplishing what we had set out to do.”

Hackathons originated in the software development world and consist of intense meetings in which groups of programmers and others collaborate intensively to solve a particular problem. With the help of a consultant, Plowman adapted the hackathon concept to legal marketing, and in June of 2016 they held their first three-hour hackathon with the team (two sessions with multiple locations involved in each) aimed at coming up with creative ideas to improve marketing efficiency and results on a specific topic. Candidly she admitted that:

At first people were saying, "I don’t know why I’m here." But when a second session was held in October, there was much more engagement and people began to focus on, "How can we go faster and get more done in the limited time we have?”

They created a list of key areas “in which we wanted to improve what we had been providing previously and increase the value we were delivering to lawyers.”

One of the unique aspects of these hackathons is that they were led by the Manager group. Historically, real opportunities for leadership and development were only handled by the Senior Marketing Team (the Director level). That team was committed to developing their Managers and creating opportunity for their growth and development. The Managers were empowered and did a great job working with the teams and bringing the recommendations forward to the Senior Marketing Team (SMT). This aspect is key in Plowman’s vision to leverage the talent on her team.

In addition, the marketing and business development team has started a significant transformation with many changes in place. The Directors have taken on pieces of this transformation and are leading this change with Plowman. There are a lot of moving parts and demands on the team. This led Plowman to adapt another Agile software development technique: scrum. Initially she provided the Directors (the SMT) a copy of the book Scrum: The Art of Doing Twice the Work in Half the Time as part of the “book club” for this group. After the SMT read it and met on it during an in-person meeting, they then expanded to the Managers as a part of their development and a way to encourage them to innovate and drive their project forward. (This book is an excellent resource for law firms and I will write a separate blog soon describing its key concepts.)

This has now evolved into a 30-minute weekly telecon held every Monday by this group to discuss four substantial projects and several other key initiatives that the team is working on (including digital transformation and social media), in which Fasken’s marketing and business development department is concentrating its efforts to become best-in-class:

The group is using some of the techniques from the scrum book to establish and measure specific goals for the next 30, 60, and 90 days. The Monday meetings are organized around three key questions familiar to anyone who has ever been involved with scrum:

  1. What did we accomplish last week?
  2. What is planned for this week?
  3. Are there any obstacles to progress?

One result of the Monday meetings is that, “People collaborate to identify obstacles. It’s also been really helpful for me as the leader of the group because I learn how I can expedite what needs to get done this week.”

This initiative is very much a work-in-progress, but participants in the weekly meetings have already produced results. “Scrum has helped us to go faster, do more, and get obstacles out of our way. It’s increased transparency, which drives efficiency and effectiveness. And it’s created cultural change within our team. The learning is coming faster and faster.”

Plowman and her team would like to expand the program in the coming year to include lawyers. She predicts that the next steps will be even more exciting “when we get to working with our lawyers and going through the process together with them.”

January 11, 2017

Case Study: LPM Certification at Davis Wright Tremaine

By Jim Hassett and Jonathan Groner

Since our Certified Legal Project Manager® program began in 2010, we have written several case studies describing participant results, most recently a few months ago.

This post summarizes the long-term experience of Judith Droz Keyes, a partner at Davis Wright Tremaine in San Francisco who completed the program in 2014. Judith specializes in labor and employment law. Her practice includes extensive counseling as well as experience in the courtroom and before mediators.

Judith first signed up for the program when a number of clients asked her about LPM, especially in connection with RFPs. At the time, she frankly wasn’t sure exactly how LPM worked, so she asked her practice group leader whether it made sense for her to get certified. The program was approved and the firm paid for it.

This program is offered via distance learning, conducted by phone and email, and organized into two modules. In Module One, participants review over 300 pages of readings from 10 project management textbooks and answer 18 essay questions about how these concepts apply to their practice. One of Judith’s Module One answers was so interesting that we ended up including it in the recently published fourth edition of our Legal Project Management Quick Reference Guide. (See page 90 for the section entitled “Process improvement to improve associate and paralegal time entries.”)

In Module 2, participants apply the concepts in their practice. Judith developed an “Employment law task list for a pre-complaint demand” (which is also reproduced in the Legal Project Management Quick Reference Guide on page 63). Her short-term goal – to take a more systematic approach to a case she was working on – was met. Her long-term goal – to simplify these task codes and get them adopted firmwide to improve client satisfaction, budget predictions, and profitability – has proven to be more elusive than she originally hoped.

One of the challenges Judith faced in getting other lawyers to accept her approach was the elephant in the room for all attempts to increase efficiency: compensation. As long as lawyers are paid more for billing more hours, efficiency is a two-edged sword. While reducing hours is often essential to make work profitable for the firm, it is almost impossible to motivate lawyers to spend fewer hours if they will be paid less as a result.

A few years ago, Jackson Lewis made headlines by announcing that associate pay would be tied to measures of client satisfaction and efficiency rather than the number of hours billed. In our view, this is the wave of the future for successful firms. But until firms make this transition, some aspects of the quest for efficiency will face resistance.

Another barrier to widespread adoption is that many lawyers believe that they are already LPM experts. After all, they’ve been planning budgets, scheduling tasks, managing teams, and communicating with clients for their entire careers. While it is certainly true that they have been doing these things well enough to succeed in the past, it does not mean that the same techniques will lead to success in the future.

Almost everyone agrees that the legal profession is changing. Clients are becoming more demanding, and competitors are improving LPM to meet client needs. These days, to retain current clients and win new ones, law firms must apply a new and more systematic approach to LPM. Those who fail to do so will be left behind.

Judith says that in the two years since her program concluded, she has continued to apply many of the lessons she learned in both in her litigation and non-litigation matters. For example, she now develops comprehensive project plans in advance of starting work on any major matter. This change has helped increase client satisfaction and profitability, especially on her fixed fee matters. She’s also learned not to worry about all the possible ups and downs and the unexpected events that can happen during a matter, such as colleagues taking leave or new people joining the firm.

These days, Judith also devotes more energy to communication issues: “Who needs to communicate what to whom and when?” When something as drastic as a final deadline for a court filing changed in the past, there was not always consistent communication about that deadline and how to work toward it. One thing she has done as a result of her LPM training is to plan ahead more consistently regarding all deadlines, communicating very clearly about who is responsible for the completion of each task, whether it’s a partner, associate, paralegal, or in-house lawyer for the client.

Nobody ever said LPM would be easy, and it would be a gross exaggeration to say that certifying a single lawyer will ever change the culture of an entire firm. But it has made a significant difference in the way Judith and some of her colleagues practice law at Davis Wright Tremaine.

January 04, 2017

Tip of the month: Develop a defensive marketing plan for 2017

I’ve said it before and I’ll say it again: As legal competition continues to get tougher, it’s more important than ever to focus on protecting relationships with the clients you already have. What will you do in 2017 to protect your top client relationships? In the current competitive environment, no client can be taken for granted, no matter how long you have worked for them. If they are already happy with your service, what could you do to make them even happier? If you’re not sure, ask them. And then do it.

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