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February 08, 2017

How to write a statement of work

By Mike Egnatchik and Jim Hassett, LegalBizDev

Legal cases and transactions can have unpredictable aspects, sometimes beyond the control of the best managers and planners. Therefore, flexibility is key. Legal project management is all about tradeoffs, and efficient project managers must be ready to adjust scope, time, and budget as the case or matter evolves. This factor underscores the importance of the primary task at the start of any project: setting your objectives and carefully defining the project scope with the client. Doing so will align mutual expectations and prepare the stage for developing an activity schedule and budget.

A statement of work must fix the boundaries of what is within the reasonably expected scope for the matter and what is not. This is particularly critical if the work is to be performed for a fixed price. The details of contents and format will vary depending on the circumstances, but could include:

  • The client’s objectives
  • Detailed deliverables such as the number of depositions
  • Deadlines or expected timelines
  • Teams and roles, if relevant
  • Assumptions and exclusions
  • Risks
  • Budget or fee as well as payment terms

The first draft of the SOW should be shared with both the client and the anticipated team members for their review and input. You need to understand the client’s goals and expectations and align them with the team’s approach, focusing on the business problem or dispute from which the matter arises and on acceptable outcomes and deadlines for the client.

As the team comes to an understanding of your client’s wants and needs, team members should keep in mind how much each want or need will cost, and whether there is any waste or excess in these expectations. These budgetary considerations may eventually affect the steps and actions taken to complete the matter. Of course the budget is extremely important, so you must be sure to carefully define in writing the anticipated assumptions of your budget and any “carve-outs,” that is, work that will not be included within the fixed price for the agreed scope. And, obviously, the SOW is simply a draft until the client approves it.

Some other helpful steps at this stage are common-sense items such as ensuring that every member of your team is familiar with the final project objective. It can be posted prominently on a bulletin board or online. Also, it does not hurt to remind team members of the client’s objective in regular memos and meetings.

The better your initial statement of work, the more likely you are to meet the client’s objectives. And if things change, the approved SOW will provide a solid basis for negotiating with key client decision-makers before performing work that may require additional funding.

However, remember that the SOW should be as short and simple as possible for managing the process. According to Michael Roster, steering committee co-chair of ACC’s Value Challenge, “When I was general counsel at Stanford, our multi-million dollar arrangements with law firms were covered by a two-page business letter combined with a one-page exhibit describing the carve-outs.”

The SOW is not a deposition or an adverse negotiation, so make sure you don’t over-lawyer it.

 

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

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