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3 posts from May 2017

May 31, 2017

The top five ways to increase LPM results (Part 2 of 2)

by Jim Hassett and Tim Batdorf

3.  Publicize successes within the firm

The lawyers who achieve quick wins often become internal champions who spread the word to their partners.  This is most effective when the firm establishes procedures to publicize successes internally.

For example, Bilzin Sumberg, a Miami-based firm with more than 100 lawyers, started with a panel discussion at a retreat in which three lawyers who had completed LPM coaching described their experience and results.  One of the three, Al Dotson, the firm’s Land Development & Government Relations Practice Group Leader, described how his LPM activities had led to new business in just a few months.  Dotson’s practice involves public-private partnerships in economic development in south Florida. It includes securing land use, zoning, and other key government approvals and permits for large real estate developments. His clients loved the LPM approach because they use project management to run their own construction businesses. Within a few weeks of starting the coaching, one of his clients was so impressed by a legal project plan Dotson had produced that he asked Bilzin to take on a significant amount of new work.

Based on the endorsement of internal champions, the majority of Bilzin Sumberg's partners volunteered for and completed LPM coaching.  They then proceeded to work LPM concepts into the very fabric of the way the firm operates, as described in a case study on our web page.

LPM successes can also be publicized in practice group meetings; through emails from firm leadership; at firm retreats, lunch and learns, panel discussions; and in many other ways.  

4.  Use just-in time training materials

In our three decades in the training and coaching business, the profession has changed radically.  When we started our company in 1985, most training was built around classes and workshops.  These days, it is far more common to use a just-in-time training approach which enables people to solve the problems they have, the moment they have them.

For example, if you need to use some unfamiliar features of Microsoft Word, it is very unlikely that you would consider taking a class. You will simply find the exact information you need in online help, precisely when you need it.

This approach has been applied in almost every field you can think of, including project manage­ment. When a research study of “The use of just-in-time training in a project environment was published in the International Journal of Project Management, the authors pointed out that “Around 40% of the knowledge acquired in training is lost after a break of one month, rising to 90% after six months.”  They then performed an experiment to show how the problem could be solved by providing access to tools that allow people to solve the problems they care about, just in time.

Full disclosure:  LegalBizDev has developed the most complete library of tools and templates to support just-in-time training for LPM.  This library has grown to over 400 pages in the fourth edition of our Legal Project Management Quick Reference Guide.  Lawyers in our coaching and training programs have used this book to quickly find the information they need when they need it.  Whether they want to define the scope for a new matter, plan a budget, increase delegation, improve client communication, or increase efficiency in other ways, the Legal Project Management Quick Reference Guide provides checklists and step-by-step advice to save lawyers time in finding the solution that best fits their client and their personality.

In 2017, LegalBizDev also began offering electronic versions of these tools and templates, which lawyers can access anytime, anywhere using their laptop, tablet, or phone.  These online templates are frequently updated to include new tools that we are constantly adding to the collection.

A number of firms have also begun to develop their own custom tools, from budgeting spreadsheets to checklists for planning an alternative fee arrangement. 

Firms that want to apply the just-in-time training approach to LPM must decide whether to “build or buy.”  They can create their own complete library of firm-specific LPM tools and templates, or start from the foundation we provide with over 150 customizable electronic LPM tools and templates that provide step-by-step advice to solve the most common problems.

5.  Assure continuous improvement by following up relentlessly

To retain current clients and find new ones, a law firm simply needs to be just a little better than its key competitors.  The good news is that until recently that was easy, because other lawyers were not focused on efficiency.  The bad news is that it is getting harder to beat competitors, as more of them focus on LPM.  The bar is going up, and what was good enough to win new business last year may not work this year.

For example, one of the most interesting developments in LPM is the application of “Agile” approaches. In the traditional approach to project management, you start by creating a plan, including deliverables, deadlines and budgets, and then work your way to the end, one sequential step at a time.  In contrast, Agile takes a more flexible approach to managing projects by constantly reviewing priorities and a team’s ability to respond to change rather than sticking to a rigid plan created before the work began.

Agile first emerged in software development, but it can be extremely useful in managing legal matters where deadlines, tasks, and even goals change frequently.  Planning at the outset of every engagement remains important, but the ability to reprioritize tasks as further information becomes available is often critical to the success of legal matters.  If you don’t know whether a case will be in court for years or settle tomorrow, a static plan simply will not work.  Agile speeds up the change process with an iterative approach that seeks client feedback more quickly and uses it to maximize client value.

According to Jeff Sutherland, one of the founders of the movement: 

[Agile is] based on a simple idea: whenever you start a project, see if what you’re doing is heading in the right direction, and if it’s actually what people want. And question whether there are any ways… of doing it better and faster.  (p. 9)

Some of the tips Sutherland offers in his book Scrum: The Art of Doing Twice the Work in Half the Time run counter to the way lawyers have been trained to proceed.  However, these tips can save an enormous amount of time in rapidly changing legal matters.  To give you a sense of how Agile works, here are a few suggestions quoted from Sutherland’s book:

  • Fail fast so you can fix early. Working… in short cycles allows early user feedback and you can immediately eliminate what is obviously wasteful effort.
  • Planning is useful. Blindly following plans is stupid. It’s just so tempting to draw up endless charts… but when detailed plans meet reality, they fall apart. Build into your working method the assumption of change, discovery, and new ideas.
  • Don’t guess… Plan what you’re going to do. Do it. Check whether it did what you wanted. Act on that and change how you’re doing things. Repeat in regular cycles and… achieve continuous improvement.
  • Small teams get work done faster than big teams. Data shows that if you have more than nine people on a team, their velocity slows down… More resources make the team go slower.
  • All the work being done… has to be transparent to everyone. If the team gets too big, the ability of everyone to communicate with everyone else, all the time, gets muddled… Meetings that took minutes now take hours.
  • Give teams the freedom to make decisions on how to take action… The ability to improvise will make all the difference.

We predict that Agile will transform LPM over the next few years.  Whether our prediction is correct or not, there is no doubt that LPM will require continuous improvement as the legal marketplace evolves.

To this day, some law firms are trying to identify a complete LPM solution before they take the first step. A committee is formed, monthly meetings are held and delayed, and months or years are devoted to analysis and debate before anyone actually does anything.

But the simple fact is that no one can possibly know what LPM will look like in ten years, or even in two years, because the legal profession is changing so rapidly.

Keeping up with these changes will require constant attention and management support.  As a senior executive from one AmLaw 200 firm summed it up in our book Client Value and Law Firm Profitability:

I think that [LPM] will require a lot of work, and daily support from the top, not just lip service from the partner team twice a year. (p. 192)

May 17, 2017

The top five ways to increase LPM results (Part 1 of 2)

by Jim Hassett and Tim Batdorf

In the last few years, many legal clients have been demanding greater efficiency and more predictable budgets. Law firms have responded by investing in legal project management (LPM) to increase client satisfaction and profitability.  They have tried a variety of approaches to this evolving specialty, including LPM coaching, training, hiring LPM staff, and purchasing new software.  Some of these initiatives have been quite effective in changing lawyers’ behavior, and some have not.

This two part series provides a high level summary of the five most effective ways to increase LPM results:

1.  Focus on changing behavior and solving problems

In 2011, when the LPM movement was just getting started, the Association of Corporate Counsel and the American Bar Association published an account of a meeting “at which leaders of corporate and law firm litigation departments rolled up their sleeves and tackled the complex issues surrounding present day concepts of value in litigation.” After the meeting, the authors of a follow-up report emphasized that future progress will not be based on improved understanding or increased knowledge. Instead, “The challenge is change/behavior management.” It’s not a question of knowing what to do; it’s a question of actually doing it.

At about the same time, many firms started implementing LPM by launching large-scale education programs. Lawyers love precedent, so when one AmLaw 100 firm announced that it had trained all of its partners in LPM, a number of others jumped in to do the same thing.  These training programs enabled firms to “check the LPM box,” write RFP responses praising their own LPM efforts, and put out press releases. What they did not accomplish, however, was to get many lawyers to change the way they practice law.

As the chair of one AmLaw 200 firm that invested heavily in LPM training put it in our survey Client Value and Law Firm Profitability

Every shareholder and top level associate [in our firm] has had a full day of project management training. I’d like to tell you that they use it, but they don’t.(p. 193)

LPM requires partners to change the very way they practice law.  And as the managing partner of another AmLaw 200 firm in our survey put it:

Project management is not natural to lawyers. We’ve always been trained to get the case done well to win, but now we also have to get the case done efficiently, and that is not part of the natural toolkit for most people. (p. 191)

It is not exactly news that education does not necessarily lead to behavior change. Taking a workshop about how to lead a healthier life by exercising regularly, losing weight, and eating more vegetables does not mean that you will actually do any of these things.

The key to getting started in changing behavior throughout an organization is to help lawyers solve the problems they face, such as living within a fixed fee budget or increasing realization.  And the best way to do that is to first identify lawyers who are motivated to change, and then to coach them one-on-one to create quick wins.

2.  Aim for quick wins to create internal champions

Lawyers are most likely to change their behavior if they are provided with convincing evidence that it is in their own self-interest. If respected colleagues say that LPM helped to make a fixed fee deal more profitable, or to avoid a write-down with a difficult client, they will listen.

As ALM Legal Intelligence noted in a survey entitled Legal Project Management: Much Promise, Many Hurdles (ALM Legal Intelligence, 2012, p. 17), “The quicker there are demonstrable positive benefits, the faster other partners will take notice.” (p. 17)

The value of quick wins in changing behavior has also been shown in many other professions.

A few years ago, John Kotter published a Harvard Business School Review article entitled “Leading Change:  Why Transformation Efforts Fail,” summarizing a ten-year study of more than 100 companies.  Most of their change efforts had failed, and Kotter outlined eight phases that were necessary for success:  generating a sense of urgency; establishing a powerful guiding coalition; developing a vision; communicating the vision clearly and often; removing obstacles; planning for and creating short-term wins; avoiding premature declarations of victory; and embedding changes in the corporate culture.

Kotter, who is now a Professor Emeritus at Harvard Business School, went on to refine these ideas in a number of publications, including the book Leading Change, which TIME magazine listed as one of the "Top 25 Most Influential Business Management Books" of all time.  According to Kotter (p. 123), short-term wins:   

  • “Provide evidence that sacrifices are worth it
  • Reward change agents with a pat on the back
  • Help fine-tune vision and strategies
  • Undermine cynics and self-serving resisters
  • Build momentum”

When LegalBizDev coaches lawyers in LPM, we look for the low hanging fruit that makes it easiest to generate short-term wins such as better budget control, improved client communication, or negotiating changes of scope.

In more than three decades in the training business, LegalBizDev has found that the single most important factor in success is selecting the right people to be trained. This is particularly critical in an area like LPM, where there is resistance and skepticism about changing behavior.

We recommend starting with lawyers who are open to new ideas and who have the most to gain. That could be the key partners who are responsible for new alternative fee arrangements. It could be relationship partners who are worried about protecting business with key clients that are looking for greater efficiency and increased value from their outside counsel. It could be an entire practice group that is considering new checklists, templates, and processes to improve its competitive position. 

Experience has shown that our training pays for itself several times over by enhancing client relationships and profitability. That success creates a new group of champions within the firm who will spread the word that legal project management can help serve clients better.

The exact individuals and groups will vary from firm to firm. But in every case, the best lawyers to begin focusing on LPM are those who are (i) open-minded about change and efficiency, (ii) in a position to benefit when LPM makes a difference, and (iii) influential enough to credibly spread the word of their success.

To be continued in Part 2.....

 

May 03, 2017

What lawyers could learn from other professions about change

Over the last few decades, many lawyers have gotten comfortable with their own success. But, as Microsoft founder Bill Gates has noted, “Success is a lousy teacher. It seduces smart people into thinking they can’t lose.”

As the law firm marketplace has become more challenging, a number of law firms have already lost. Just ask the lawyers and staff who used to work at Bingham McCutcheon, Dewey & LeBoeuf, Heenan Blaikie, Howrey, Heller Ehrman, Thelen Reid & Priest, or Thacher Profitt & Wood. Each of these firms had hundreds of lawyers at one time, but now the firms are gone.

These failures have often occurred with little warning to the rank and file. In a study of 37 large law firm collapses since 1988, John Morley of Yale Law School concluded that “law firms often go from apparent health to liquidation in a matter of months or even days and they never manage to reorganize their debts in bankruptcy and survive.”

Every law firm that has gone out of business had its own unique problems. But lawyers often use this as an excuse to think: It couldn’t happen here. Actually, it could. As Richard Susskind summed it up, “The legal market is in an unprecedented state of flux. Over the next two decades, the way in which lawyers work will change radically… Unless they adapt, many traditional legal businesses will fail.”

This type of rapid change has been seen in many other industries. In 2014, a medallion to operate a taxi in New York City cost about $1 million. According to a recent Bloomberg report: “Owning one used to be akin to owning a gas-guzzling, money-printing machine.”

However, thanks to the success of Uber, Lyft and ride sharing services, by 2017 a medallions’ value had been cut in half, and it is still declining.

There are many other examples of people who experienced great success and thought they couldn’t lose. Here are some of the companies they used to work for: TWA, Pan Am, Eastern Airlines, MCI WorldCom, American Motors, Montgomery Ward, Woolworth’s, RCA, Compaq, Digital Equipment Corporation, Wang, Drexel Burnham, E.F. Hutton, PaineWebber, and Lehman Brothers.

But the world changed and they didn’t; and now all those companies are gone, along with many others.

In the last few decades, the forces of global economic change and technology have radically transformed such industries as telecommunications, airlines, retail, mass media, and medicine.

Similar forces have now begun to transform the business of law. One of the most interesting analyses of lessons from other professions was offered by Clayton Christensen, author of the Innovator’s Dilemma and a professor at Harvard Business School, in a keynote presentation at a Harvard Law School conference on “Disruptive Innovation on the Market for Legal Services.”

Here's one example Christensen presents:  A few decades ago, steel was made in massive integrated steel mills, which were quite expensive to build and to operate. The products they produced ranged from low-quality rebar to the high-quality sheet steel used to make cars. Then, in the late 1960s, new technology enabled mini-mills to produce steel much more cheaply by melting scrap in electric furnaces.

At first, the steel produced by mini-mills was low quality and only satisfied the rebar market. Integrated mills were happy to let the rebar business go away because its gross margins were about 7%, and they could make 12% with higher quality steel.

For a while, everybody was happy. Mini-mills had a 20% gross margin and made a ton of money taking over the low-tier business. And the average gross margin profits of integrated mills went up when they stopped making rebar, because they had eliminated their low-margin work.

But by 1979, mini-mills had driven the last high-cost integrated mill out of the rebar market. When the mini-mills had only each other to compete with, the price of rebar collapsed by 20%, and none could make money. Naturally, the mini-mills concluded that if they could make better steel, they could go after a whole new market. So they attacked the next tier, angle iron with 12% profits.

Again, the integrated steel mills seemed happy to let them have it because they were making 18% on sheet and structural steel, and again their average profits went up. And the same thing happened again. Everyone’s profitability improved in the short term, until the last high-cost integrated mill was driven out of the middle-tier business in 1984 and prices again collapsed by 20%.

Mini-mills then found a way to make high-quality steel, and they now account for 85% of North America’s steel production. All but one of the integrated mills has gone bankrupt.

Could something similar happen in the legal profession, with lower-cost competitors first taking away the simplest work (say e-discovery and contract lawyers) and then gradually moving to more complex matters?

It is always dangerous to generalize across industries, but if you’d like to consider whether law firms are immune to massive change, you might want to study the history of other industries that thought they were immune, including:

  • Travel agencies
  • Bookstores
  • Newspapers
  • Airlines
  • Video rental stores
  • Mini-computer companies
  • Railroads
  • Canal operators
  • Buggy whip manufacturers

As jazz great Miles Davis wrote in his autobiography, “The world has always been about change.”

Now it’s lawyers’ turn to change.

This post was adapted from LegalBizDev’s new LPM Tools and Templates.