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January 24, 2018

The Top Three Facts Law Firm Leaders Need to Know About LPM

By Jim Hassett and Tim Batdorf

Law firm leaders who are interested in legal project management (LPM) should begin by focusing on these three central facts:

1. Clients want LPM

Any law firm that has responded to an RFP in the last few years knows that client requests for LPM are growing rapidly.

Survey after survey has shown that legal clients are seeking greater efficiency from firms.  For example, in its 2017 Chief Legal Officers (CLO) Survey (p. 37) , Altman Weil provided 280 CLOs with a list of ten possible service improvements, and asked “please select … [the improvements] that you would most like to see from your outside counsel.”  The top three things clients want were all closely related to LPM:

  1. Greater cost reduction (51%)
  2. Improved budget forecasting (46%)
  3. Non-hourly based pricing structures (39%)

Even when clients fail to ask for LPM by name, the results that clients are looking for definitely fall under the term, including minimizing surprises and improving communication.

If you believe that your clients are different and that they care only about legal quality and not about cost, consider yourself very lucky. But you’d better be right, because you may be at risk of losing these clients to competitors who focus on improving service with LPM.

2. Experts disagree about the best way to implement or even define LPM

There is widespread agreement that clients want LPM and that it can pay off for firms by protecting business and increasing realization and profitability. But the field is so new that experts still disagree about exactly how it should be defined. These arguments have slowed LPM’s progress, as seen in this quote from an AmLaw 200 firm leader from one recent survey:

We were just at a board meeting last week where we were talking about whether we should do formalized project management training. My answer to that is obviously yes, we absolutely should. But first we need to agree on what legal project management is. (p. 89)

Here is the definition we’ve used for years:  LPM increases client satisfaction and firm profitability by applying proven techniques to improve the management of legal matters.  Note that this is a broad definition that embraces a very wide range of management techniques, including pricing, communication, process improvement, and much more.  

By our definition, any lawyer who has ever planned a budget or managed a team has served as a legal project manager. But what was “good project management” for lawyers a few years ago is no longer good enough. Clients are now choosing law firms based on their ability to apply a more systematic and disciplined approach that delivers more value more quickly.

We argue that LPM revolves around improvements in eight key areas:

  1. Set objectives and define scope
  2. Identify and schedule activities
  3. Assign tasks and manage the team
  4. Plan and manage the budget
  5. Assess risks to the budget and schedule
  6. Manage quality
  7. Manage client communication and expectations
  8. Negotiate changes of scope

The key to success is to find the “low-hanging fruit”: The management tactics that are most likely to help each individual to increase value and/or profitability.

As Barbara Boake and Rick Kathuria summed it up in their book Project Management for Lawyers (p. 14): “project management is a tool box—choose only what you need to most effectively manage [each] project.”  

This pragmatic approach is closely related to the Agile approach to project management, an iterative process that focuses on key issues, one at a time, in their order of importance.In an article entitled “Agile: A Non-traditional Approach to Legal Project Management,” Kim Craig, then SeyfarthLean’s  global director of legal process improvement, and Jenny Lee, a senior project manager with Seyfarth, explained why Agile is particularly relevant to the legal profession

Traditional project management focuses on robust, comprehensive, mandatory project documentation with lengthy project charters, detailed project plans, complex status reports and rigorous, formal change control logs… [But] the world of legal service delivery is fast-paced and unpredictable. In legal matters, we cannot possibly know everything that will be involved with litigation at the outset. Developing an overall strategy is generally common practice, but detailed, cradle-to-grave planning is impossible.

Agile contrasts with the more traditional approach to project management which holds that every project should start with a well-defined plan.  Only after that is complete and approved do you begin working your way to the end, one sequential step at a time.

The traditional approach is also known as the “waterfall” approach because progress is seen as flowing steadily from the top to the bottom (as in a waterfall).  It typically sees projects in terms of five key phases or steps such as:

  • Analysis
  • Design
  • Implementation
  • Testing
  • Evaluation

In some cases, firms have hired LPM Directors based on their “waterfall” project management experience in construction, government contracting, and other areas where traditional techniques are used, and Agile techniques are not.  This has led to many stories of LPM Directors who could not or would not adapt to a legal environment, and who ended up working with the very small group of partners that were interested in project charters, Gantt charts, and tools like Microsoft Project software.

So, if anyone tells you that LPM is defined by five steps such as analysis, design, implementation, testing and evaluation, you should be aware that they are describing the traditional waterfall approach, not the Agile approach which we believe applies better to lawyers. As the old cliché says, you won’t get a second chance to make a first impression, and attempts to apply the traditional waterfall approach have set back the cause of LPM at many firms.

Another challenge in implementation caused by the controversy over definitions can be seen in the relative resources firms have devoted to two key questions addressed by LPM:

  1. Pricing: How do I bid high enough to make an acceptable profit, but low enough to get new work?
  2. Managing: After I set a price how do I manage the work to assure client satisfaction and a reasonable profit?

In a study based on interviews with 15 LPM directors we found that almost all of firms’ emphasis has been placed on the first question – pricing – rather than the second – management (p. 292).  We believe this is a mistake.  As we wrote in that study:

In this era of dog-eat-dog competition, firms sometimes have little control over pricing. But once the price is set they CAN control how the work is done. So why do so many firms concentrate on pricing before internal management… [Frankly], it’s a whole lot easier to get lawyers to agree to a budget than it is to get them to live within it… LPM directors need to help lawyers change their behavior, which is a [much more difficult] challenge. (p. 298)

Interestingly, since completing that study we have talked to clients who have performed their own internal proprietary “gap analyses” to determine how to improve LPM, and reached this same conclusion:  they need more emphasis on changing lawyers’ behavior.  Of course, the financial side of setting budgets is important. But if lawyers did a better job of living within those budgets, and communicating with clients, the impact on the bottom line would be faster and more significant.

3. LPM is hard. Success requires long-term management support

In our LPM work with hundreds of law firms, we’ve seen the importance of follow-up over and over again.  In every single case where we have seen a firm make significant LPM progress, it was led by influential partners or members of the executive committee who were strong believers.  In fact, in a few cases, we’ve seen LPM programs make an enormous amount of progress when they were led by a powerful internal champion, and then slow to a crawl when that decision-maker left the firm.

In our view, no law firm on the planet has achieved more LPM behavior change more quickly or more efficiently than Bilzin Sumberg, a Miami firm with about 100 lawyers.

Bilzin started several years ago with individual coaching for key partners aimed at creating quick wins.  Based on their success increasing client satisfaction and new business, these partners became LPM champions who spread best practices throughout the firm.  Practice group leaders are now required to report regularly to an LPM committee and to the managing partner about how they are applying LPM and what works best.

Many firms have individual lawyers or practice groups that are quite advanced in LPM, but in our opinion not a single law firm in the world can yet say that LPM has truly taken hold across the entire firm. LPM aims to change habits that have been reinforced over decades, and to help firms constantly adjust to evolving client demands.

As Bilzin Sumberg Executive Director Michelle Weber summed it up, “Applying LPM is a continual ongoing process.  It’s all about modifying behavior one small step at a time.”  

For a pdf of this post, plus additional related information, download our white paper The Keys to LPM success

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