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June 28, 2017

Legal project management and business development (Part 1 of 2)

By Jim Hassett and Jonathan Groner

The best way to develop new business is to give clients what they want.  And the data on what legal clients want is crystal clear.  In its most recent Chief Legal Officers Survey, Altman Weil asked the question “What would you most like to see from outside counsel?”  The top three answers were greater cost reduction (53%), improved budget forecasting (43%), and non-hourly based pricing structures (36%). 

All three are related to legal project management, so you could say that the top three things legal clients want these days are LPM, LPM, and more LPM.  The answers to this question in the Chief Legal Officers Survey have been supporting this same conclusion for years.

To put it another way, current clients and new ones are choosing law firms at least in part because of the firms’ ability to deliver value to them by increasing efficiency.   LPM professionals are extremely aware of these client needs and have become increasingly involved in marketing and business development.

For example, at Lathrop Gage, a firm with 300 lawyers in ten offices from Los Angeles to Boston, Dave Clark was recently named the firm’s full time LPM Partner.  Before taking on this role, Dave was a practicing IP litigator for over 30 years. He has completed LegalBizDev’s Certified Legal Project Manager® program, and he is now collaborating with a team of analysts and managers to help the firm’s attorneys increase client satisfaction while maintaining profitability.

In terms of the implications for business development, Clark notes that:

Three to five years ago, you hardly ever heard clients referring to LPM. Now, it’s the rule rather than the exception for most clients of any size. Most of the RFPs that we respond to these days have questions about LPM including budgeting, forecasting, or efficiency.  Clients want to know that the firm will work efficiently and bring better cost predictability to bear.

He went on to explain that:

LPM is becoming a marketing differentiator for our firm. It’s not a fad, it’s here to stay, and LPM is definitely needed for business development. Without it, a firm won’t have much of a chance getting or keeping significant work for clients.

Clark’s conclusions are quite consistent with those of the majority of AmLaw200 managing partners, chairs, and others we interviewed for the book Client Value and Law Firm Profitability.  Here are typical comments from three of the firm leaders in our survey: 

The way law firms deliver legal services to clients is undergoing a huge revolution. It’s going to change before our eyes in the course of a very short period of time. And it’s all being driven by clients who want to get value for their money.

I don’t know of any client that has not asked us to deliver more value, or… signaled to us pretty clearly what they’re expecting. Even as they are required in their markets to deliver more with less, the message is that… lawyers must do the same.

The competition to retain great clients and to get new great clients… has increased nine-fold. It goes back to the basic economics of supply and demand. There are more very, very good law firms chasing the best legal work. And if you have a legal budget of X millions, you have your pick of who to use.

At Ballard Spahr, a national firm with over 500 lawyers, Melissa Prince is the Director of Pricing and LPM, and another alumna of our Certified Legal Project Manager® program.  Whenever an RFP comes in to Ballard Spahr, Melissa or a project manager in her department participate in the initial phone call that is run by the business development manager who is coordinating the RFP response.

“They look to us for input from a pricing, legal project management, technology and client value perspective. We work well with Business Development and Marketing, and our Chief Marketing Officer is one of our biggest advocates and supporters.  She understands that what our team is doing in many cases sets us apart from our competitors. She advocates to our partners that have a seat at the table when we are selected for the final rounds of RFP meetings, and we have received very favorable responses from our clients,” says Prince.

Like Clark, Prince was formerly a practicing lawyer.  She oversees a pricing and legal project management team that focuses on a variety of aspects of LPM within Ballard Spahr, including pricing, process improvement and practice innovation to help lawyers come up with more efficient ways of practicing law. She reports to the firm’s managing partner of finance and operations and to the firm’s executive director.

“Our partners have been amazingly responsive to our team, which has been in large part driven by the support that the firm's senior management, departmental leadership and Board has given us,” says Prince. “They understand that the legal marketplace is changing and the firm needs to be willing to change with it.  It's really exciting to see, and there is a strong feeling at the firm that we are in this together for the benefit of our clients.”

As issues of project management and efficiency have come to the fore in major corporations, a new type of corporate position, that of Director of Legal Operations, has emerged – and that too has had an impact on the way in which clients select their attorneys.

Writing in 2015 in Bloomberg Law’s Big Law Business, reporter Susan Hansen noted that the position of Director of Legal Operations, which often focuses on process improvement and efficiency in getting legal work done for a company, started in Silicon Valley and has spread quickly in corporate America.  

Now, not only are an increasing number of corporate law departments hiring operations pros, but the role they play -- in managing outside vendors and contracts, and in implementing new technology and otherwise driving efficiencies and containing costs -- has continued to expand . . .  And legal industry insiders predict that the demand for savvy operations specialists will only grow.

Ballard Spahr’s Prince is well aware of this trend, in which professionals in corporate legal departments have a great deal to say about efficiency and about the selection of outside counsel on that basis:

I have seen growing demand for efficiency from the client side, primarily from these directors of legal operations.  This year, I attended the CLOC (Corporate Legal Operations Consortium) conference, because this is where my contemporaries in the corporate world were.   We were recently selected as one of only three firms in a large company’s preferred legal network, and the director of legal operations played a huge role in the RFP and outside counsel selection process.  She understood that selecting firms that were committed to non-hourly fee arrangements and disciplined project management and process improvement was just as important as the quality of the legal work involved.

 To be continued in Part 2....

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