151 posts categorized "Legal Project Management"

July 23, 2014

Business development best practices: Plan Advances

This is one of a series of occasional posts summarizing the most important best practices from my book the Legal Business Development Quick Reference Guide which is now also available in a Kindle edition.

The concept of a sales “advance” comes from Neil Rackham’s book SPIN® Selling, which is based on the most systematic research ever conducted on the sales process, and one of the most widely accepted approaches to sales in other professions. According to Rackham’s website, “More than half the Fortune 500 train their salespeople using sales models derived from his research.”

When Rackham analyzed 35,000 sales calls over 12 years, he found that “In major account sales, fewer than 10% of calls actually result in an Order or a No-sale.” The other 90% of sales calls should be classified as successful only if the salesperson gets an advance: “A specific action taken by either party that moves the sale forward,” such as scheduling another meeting, getting introduced to someone new, or providing a list of references.

When a client says we should talk again, but does not specify a date or time, that is not an advance, because there is no specific action. Rackham calls this a “continuation” and considers the meeting unsuccessful. It does not mean that the sale is dead, but it does mean that you are not making progress.

Great salespeople succeed because they plan every sales call, and strategize how to get the largest possible advance. Rackham’s book The SPIN® Selling Fieldbook: Practical Tools, Methods, Exercises, and Resources provides guidance on how to brainstorm possible advances before a meeting, and then select the one that is likely to lead to the greatest progress. This takes effort and practice. But the ability to consistently get advances is often the difference between success and failure. 

In Rainmaking Made Simple, Mark Maraia provided a slightly different definition of an advance, rewritten for lawyers: “An advance has three elements: (1) a commitment (2) to take action (3) in a definite time period.” For complex legal matters, the advance often involves getting a meeting with others who may be involved in making the decision.

Any lawyer who feels that she has enough meetings with potential clients, but that they are not getting far enough, would be well advised to read Maraia’s chapter on how to “Avoid Random Acts of Lunch.” It explains how to prepare for every business development meeting by writing down the needs of the person you will meet, a few questions to ask, and the advance you would like to achieve.

As Rackham summed it up (on p. 171 of the SPIN Selling Fieldbook):

If there was just one piece of advice we could give to people to improve their selling, it would be this: Plan your calls…Do you know exactly what outcome you hope to achieve? […] Plan what to ask, not what to tell.

 

 

July 16, 2014

Research update: What clients should do to increase value (Part 2 of 2)

This post previews results from my book Client Value and Law Firm Profitability, which will be published in October, and can be pre-ordered now for a 25% discount.

 

The second most important client issue raised by research participants was the need for more transparency and better communication. Lawyers are trained to hold their cards close to their vest, and there are many situations where that is exactly the right thing to do. But when clients are trying to establish a long-term partnership with a law firm, secretiveness does not help.  Here are quotes from five different firms highlighting the problem: 

The pricing and delivery process needs to be transparent. Clients and firms need to be forthright when they come to the table. The client needs to declare what they’re trying to achieve and how they want to achieve it and the law firm needs to be transparent about what they can do and how much they need to charge. It’s too often a negotiation when it should be a collaboration. You need to figure out if you can service the work in an economically meaningful way… so that we’re not trying to squeeze the last nickel out of each other.

The more information the law firm has, the better their budget, the better the flat fee. If we get really spotty information, then we’re grasping to come up with something. And sometimes you know clients have the information, they’re just not sharing it for whatever reason.

Clients have to communicate with us about what’s important to them, what they want us to do, what they don’t want us to do. Otherwise, alternative pricing becomes impossible.

I don’t hear a lot of partners or clients initiating honest and open conversations with each other. Most in-house counsel are former law firm counsel and they’re reluctant to have a candid conversation about the relationship. Not enough of them talk about their challenges and the pressures on their department, or explore openly with their law firm partners how they could work more effectively. It’s almost easier to avoid that conversation and instead get fed up and switch law firms.

Clients are as afraid as we are about bills. They have budgets and they’re worried we’re going to blow them. But they’re like us in thinking that if they don’t talk about it, maybe it will go away. When they’re willing to say up front, “Give me a scope on this. How much are you thinking?” they get better value.

A previous post about this research emphasized the importance of better project management by law firms. However, to maximize results you must increase efficiency on both sides of the table. Greater value demands that in-house departments, too, embrace legal project management.  Below are unusually frank comments from four firms that made this point (anonymously):  

When you’re working on a fixed fee or a sophisticated alternative fee, clients have to change how they deal with their outside counsel. If you’re going to do all their work for a million dollars and they keep you on the phone every day for hours with questions, they’re going to burn up all the value they could get and we’re going to be unhappy. So those kinds of things need to be real partnerships. Some clients get it and other clients don’t.

Clients, too, have to shed the restraints of thinking in billable hours. They want a deal, cost certainty, the best value. That doesn’t mean throwing everything you can think of into the shopping cart. If the client wants to micromanage and review drafts and revise drafts and do it again and get it to somebody else for revision, it makes the AFA much more challenging.

We get clients who don’t give the appropriate time for a matter, and there are a bunch of clients who are just managing the matter to reduce the fee, like insurance companies. They say they’re not going to pay for an internal meeting, which is pretty short-sighted. You need people to talk. I think some people are just trying to show their bosses they beat up their lawyer…. Clients have to work more as a team with their lawyers and not make it as adversarial as they sometimes do. It doesn’t engender loyalty either way.

Like firms, clients too can be inefficient. They can be bureaucratic and take a long time to make decisions. If it takes them 90 days to decide about a settlement, a lot of fees may have been incurred. You may have a trial date in six months, and you can’t say we’re going to take 90 days off while the client is deciding.

Similar issues came up several years ago, when I published the LegalBizDev Survey of Alternative Fees and the chair of one AmLaw 100 firm remarked:

It is very difficult for a law firm to tell a client that a matter is not going well because of what is going on in the legal department. I think we’ve all had experiences over the years with in-house counsel who are just not good managers. A lack of skills in project and relationship management on the part of either in-house counsel or the project leaders in a law firm can increase cost and reduce the quality of outcomes. I believe both sides could use more training in these areas.

After reviewing a draft of this report, Michael Roster, co-chair of the ACC Value Challenge Committee, had some related advice for clients:

The most important thing clients can often do to increase value is to get out of the way. Stop micro-managing. Stop insisting on memos that aren’t important to the ultimate client, that is, the relevant business unit. Harness firms more effectively for their legal expertise. One of my former partners confirms that client cost could easily be reduced at least a third if both sides simply focused on what matters.

Each of these issues – better definitions of scope, increased transparency, and improved in-house LPM – reflects the need for clients to consider ways to improve their role and their relationships. They may also represent an opportunity for law firms to start some of the difficult discussions mentioned above. Outside counsel should try to be a little more courageous and assertive in raising these issues tactfully and repeatedly, rather than rely 100% on in-house counsel to get it on their own.

July 09, 2014

Research update: What clients should do to increase value (Part 1 of 2)

This post previews results from my book Client Value and Law Firm Profitability, which will be published in October, and can be pre-ordered now for a 25% discount.

Over the past year, I have interviewed managing partners, chairs, senior partners and executives from AmLaw 200 firms about how to meet client demands for greater value while protecting profitability. 

The 50 firms who were interviewed are listed on our web page, but I agreed to keep the name of every individual I spoke to confidential, and gave them complete editorial control over what appears in print. (In fact, participants are currently reviewing a Preview Edition of our final report, to insure its accuracy.)  This approach enabled senior decision makers to speak frankly and openly about highly sensitive issues. The research provided a platform that made it easy for firm leaders to say what they really think, since they would not be quoted by name.

Most of the book focuses on internal operations:  what has worked and what hasn’t in such areas as measuring and managing profitability, legal project management, software, new staff positions in pricing, contract attorneys and more.

But one chapter focuses on participants’ answers to this question:  “To maximize value in a sustainable way, do clients need to change the way they work with law firms?”  98% said yes they do. 

Today’s post describes the single most important thing clients should do to increase the value they receive:  Better define objectives and scope at the beginning of each matter.

However, before we begin, it is important to note that several participants noted an important caveat: the client is always right.  In fact, as one firm chair put it, these days,

Clients can do whatever the hell they want to.

A senior executive from another firm put it a bit more diplomatically:

If law firms are sitting back saying, “Well we’re in the right and we’re just going to wait it out, and clients need to be doing this or that,” I wouldn’t want to bet on that horse.

The underlying problem is that the legal profession is in the middle of a period of historic change, and both clients and law firms are still finding their way:

I think there have been some false starts in the in-house world, things that have been tried and have not really worked out.

The belief that clients have this figured out, and if these darned law firms would just get on board, everybody would be in a better spot, is, I think, a complete mischaracterization. Take a look at some of the RFPs. It’s just laughable, the questions that are being asked. We have to come together as an industry to do a better job of defining value and doing things that will help relationships on both sides.

In our view, this respondent really hit the nail on the head:

Clients only need to change if they perceive that a change is necessary for them to either reduce their cost or to improve their outcome.

That is the answer to the client-is-always-right quandary. Clients only need to change if firms can persuade them that it’s in their own interest. It puts the burden on firms to think through how to raise these issues diplomatically and persuasively enough so the client sees the benefit.

While no respondent claimed to have a roadmap for conducting these difficult discussions, the discussions below of problematic client attitudes, policies, and practices suggest that the best place to start is with this key issue: Define objectives and scope at the beginning of each matter.

In a previous post about this research, I quoted evidence that the most important thing law firms can do to increase efficiency is to start each engagement by getting a better sense of the client’s objectives and what is inside and outside the scope of a particular engagement.

The fault lies not just with law firms but also with clients who fail to spend enough time thinking through what they need vs. what they want, how much they are willing to pay for what they want, and communicating those decisions to their law firms.

As one chair put it:

If there was one single thing that clients could do to make it easier to assure their satisfaction, it would be to help me identify at the outset of the project what the client would consider to be success. What would make them smile? So many things evolve from that. How do I spend my time on that objective? How do we structure our fee arrangement so that we are providing value to the client? What sort of communication does the client want from me?

Many other respondents echoed this concern:

Often, what we’re hired to do is not clear, and so we have a lot of people sitting around, treating all of this as research of documents, and it turns out that’s not what the client really wanted. Then they change what they want.

We can certainly reduce the cost, but clients have to jointly work with us to figure out what it is they want us to do less of in order to meet their expense goals. You can’t do scorched-earth approaches to matters at reduced fees.

It’s important for clients to really understand upfront what they’re willing to spend and how far they’re willing to go. You can try to explain as things are going on, but if a client didn’t anticipate something would take so much time, it’s hard to explain it when you’re in the middle of the process.

Our biggest issues are in getting our partners and our clients to sit down to properly scope and budget prior to a project. Clients want lower cost, but they want to do it the way they’ve always done it. When you sit down and talk to a client about the practical nuts and bolts, things work out great. When our partners dismiss the conversation or the client doesn’t have time, that’s where we have some matter management issues.

Some clients understand that working with the lawyer in advance makes it easier to get what the client wants, at their price, time, and so on. Others are a harder sell. Some general counsel communicate better than others and know what outside counsel is saying. Others misunderstand, which can create inefficiency.

Next week, in Part 2, I will talk about two additional things clients should do: increase transparency about client needs, and improve in-house project management.

 

July 02, 2014

Tip of the month: Set up a monthly meeting to discuss business development with a few colleagues

Plan to meet for breakfast or lunch the first Wednesday of every month, or at some other regularly scheduled time.  Invite four to six colleagues whom you enjoy working with.  Commit to specific marketing action items the first month, and every later month report to your colleagues what you did and did not accomplish, and your new plan.  Try to get someone from the firm’s marketing department to act as the meeting organizer who will send out regular reminders and summaries of accomplishments, and assure that meetings are held even when some people cannot make it. 

 

The first Wednesday of every month is devoted to a short and simple tip to help lawyers increase efficiency, provide greater value to their clients and/or develop new business. For more information on improving results, see page 54 of my Legal Business Development Quick Reference Guide, which is now available in both paperback and Kindle editions.

 

June 25, 2014

Business development best practices: Listen

This is one of a series of occasional posts summarizing the most important best practices from my book the Legal Business Development Quick Reference Guide which is now also available in a Kindle edition.

In The Seven Habits of Highly Effective People, Stephen Covey wrote, “If I were to summarize the single most important principle in the field of interpersonal relationships, listening is the key.”

In the book Primal Leadership, Daniel Goleman argues that listening skills are vital for leaders. An effective leader must be able to sense how employees feel, and then channel that energy into the most productive directions.

The skill of listening can even help people get a job. When business leaders were asked to rate the most important characteristics they look for in hiring people, 73% rated listening as an “extremely important” skill. But when the same group was asked how many high school graduates actually have good listening skills, the answer was 19%.

When Suzanne Lowe and Larry Bodine published a survey of 377 marketing professionals on Increasing Marketing Effectiveness at Professional Firms,” one of the best metrics for tracking success was whether rainmakers consistently listened to their clients.

In the book Advanced Selling Strategies, sales guru Brian Tracy explains four reasons why “Active sincere listening leads to easier sales:”

  1. Listening builds trust. In a survey of professional purchasers, the single biggest complaint was that salespeople talk too much. If you show that you are interested in understanding what people really need, they are more likely to believe that you will provide it.
  2. Listening lowers resistance. It helps to make customers feel relaxed and comfortable instead of tense and defensive.
  3. Listening builds self-esteem. Everyone wants his or her views to be heard. So when you listen to a client, it shows that you respect their opinions.
  4. Listening builds character and self-discipline. Hopefully, this fourth point won’t come up very often. But from time to time, you may sell to a client who is, shall we say, not overly dynamic. As they keep talking, it’s easy to start daydreaming about which type of salad you should order for lunch. But the more boring your client is, the more character you will build by listening. And the better you understand what the client wants, the more likely you are to get a new engagement.

Why is listening so hard for many lawyers? Well, first of all, you have to talk less.

Experts say that when you are building business relationships, you should spend 50% to 80% of your time listening. But when lawyers meet potential clients, many think that they need to talk quickly so they can list all the wonderful things their firm can do. This is a mistake.

The client is a lot more interested in her own problems than in your capabilities. If she did not think you were good, you wouldn’t be meeting. So you need to devote most of your time to focusing on what she wants, needs, and feels. As the old saying goes, that’s why you have two ears, and one mouth.

Great listeners also don’t argue. That’s another reason many lawyers find it difficult. To listen effectively, you must give up the need to be right.

If you want to become a better listener, there are dozens of books to read, and even a professional academic organization you can join (the International Listening Association, www.listen.org). Meanwhile, these five steps can get you started:

  1. Establish genuine interest by asking questions that you care about
  2. Take notes. Writing down what people say shows that what they say is important, and that you are paying attention. Just put the pen down if the talk turns confidential.
  3. Respond to the speaker’s nonverbal cues, and monitor your own, including eye contact, smiling, and frowning
  4. Keep people talking. Paraphrase, summarize, and restate what you hear. When you agree with people, they will think that you are smart. Especially if you don’t interrupt them or argue.
  5. Come prepared with good questions

Lawyers must start by “mastering the art of the easily answered question,” as explained in Kevin Daley’s Socratic Selling. The book describes several types of non-directive probes that will help a client think through a situation without trying to push her to a particular conclusion, and without distracting her.

For example, “draw probes” keep drawing out information until the client and the lawyer are satisfied that all the important points have been covered, such as:

  • Tell me more about ____
  • Give me an example of ____
  • What else should I know about ____?

“Access” probes allow you to obtain access to other topics without forcefully changing the subject. These non-threatening questions introduce a new topic, but still leave the client free to take the conversation wherever she wants. For example:

  • How does ____ fit the picture?
  • Talk to me about your experience with _____
  • How do you handle _____?

It sounds simple, but asking this type of question does not come naturally to me, nor to many lawyers I know, because we like to be in control. Well, clients do too. Professional salespeople have an old saying that “Whoever talks the most, will enjoy the meeting the most.” If you want to build a relationship, you want the client to be the one who enjoys the meeting.

June 11, 2014

Book Review: Smarter Pricing, Smarter Profit

Six months ago, if you had asked me what book to read for a complete analysis of legal pricing, I would have said “Nobody has written that book yet.”  (At that time, my book Legal Project Management, Pricing and Alternative Fee Arrangements was the only one that even provided a 20,000 foot overview.)

But now there are two.  Jonathan Groner and I reviewed the first, by Toby Brown and Vince Cordo, last February.  Today’s review focuses on a brand new book by Stuart J.T. Dodds, director of global pricing and legal project management at Baker & McKenzie,one of the largest law firms in the world. 

Smarter Pricing, Smarter Profit is the only book on the market that goes step by step through everything lawyers need to know to survive and prosper in today’s rapidly changing marketplace.  It is divided into four main sections:  set the price, get the price, manage to the price, and review the price.  Until a few years ago, lawyers could make a great deal of money with only a basic understanding of these stages, so that’s what most did.  Since the dawn of the new normal of a few years ago, competition has gotten much tougher, and lawyers have learned that they must improve their business practices to remain profitable.  Several books have appeared that provide useful advice on the third stage of legal project management (LPM).  But Stuart’s book is the first to review all the practical steps a lawyer should take from the first moment she becomes aware of a new opportunity, through negotiating a deal and managing the work to the final post-matter review.   

I was particularly interested in the chapters on LPM, especially the ten steps which Stuart recommends at the start of every matter:

  1. Confirm what the client wants and expects
  2. Group the work into the main areas
  3. Agree how to address changes of scope upfront
  4. Develop and agree on the matter plan
  5. Agree on the fee and fee approach
  6. Agree on the engagement letter and share with the team
  7. Agree on the reporting format and schedule
  8. Establish your matter phases and tasks
  9. Approve new timekeepers
  10. Staff the core team and agree on client responsibilities

All this before you begin working on a matter!  While it is true that in some legal situations there is simply not enough time to accomplish all ten steps upfront, it is also true that in many matters there IS time, and a little initial planning can save a lot of  long-term expense.  At this moment in history, any lawyer that follows even a few of Stuart’s steps will be ahead of most competitors.  But as one managing partner said in my soon to be published research on Client Value and Law Firm Profitability:

Project management will probably have the biggest long-term positive impact [of all the things that are changing in law firms], but it’s been the biggest challenge because it’s something that hasn’t been easily absorbed by a lot of the lawyers.  When busy lawyers start scrambling around, the inefficiency creeps right up.

That’s why the key to success is changing behavior.  Stuart has been a panelist on several of my Ark workshops on “LPM:  Changing Behavior within the Firm”, and underlines a key lesson we’ve seen one law firm after another learn the hard way when he writes “Educating is easy (relatively), but changing behavior is much harder, and the change is especially difficult for lawyers.”  (p. 213)

In addition to all its business insights, there are also many small things to like about this book.  Stuart is based in Chicago but spent most of his career in London, including 14 years as a management consultant at Accenture.  (He often reminds people that he is actually from Scotland.)  Anglophiles will especially appreciate the references to UK research which has not been widely cited in the US, and the occasional British colloquialism.  For one example, read the story of a lawyer who put a procurement officer “on his back foot” (p 148) by threatening to walk out of a meeting about discounts, when the meeting should have focused on “protecting your company from losing a potential multi-million dollar claim.”

I’d love to keep writing about this book, but the best advice I can offer is that you stop reading this review and order a copy.  Read the book and act on it before your competitors do, and you will earn back the $169 price many times over.

Full disclosure:  I have worked closely with Stuart over the last several years, since he manages our LPM coaching program for Baker & McKenzie.  Whenever Stuart quoted me in this book, I smiled a little.  But to be honest, I also got a little jealous when I saw how well he presented some of the key concepts.  When I saw the title of Chapter 14, for example -- Thinking Big, Starting Small – I thought:  Why didn’t I think of that catchphrase?

 

June 04, 2014

Tip of the month: Keep a prioritized list of business development action items

Every business development plan should include lists of action items that are SMART:  Specific, Measurable, Achievable, Relevant and Timed.  Given their very limited marketing time, lawyers must focus first on the items that are most likely to pay off, and limit themselves to those that can realistically be achieved in the time they have for marketing.

 

The first Wednesday of every month is devoted to a short and simple tip to help lawyers increase efficiency, provide greater value to their clients and/or develop new business. For more information on improving results, see page 54 of my Legal Business Development Quick Reference Guide, which is now available in both paperback and Kindle editions.

 

May 21, 2014

The most important findings from Altman Weil’s new survey

What’s wrong with this picture? 

In the 2014 Law Firms in Transition Survey which Altman Weil released a few days ago, 304 managing partners and chairs of US firms with more than 50 lawyers were given a list of legal market trends and asked “Which do you think are temporary and which will be permanent?” 94% rated “focus on improved practice efficiency” as permanent, in a tie for the number one permanent change with “more commoditized legal work.”

But when the same survey asked “Has your firm significantly changed its strategic approach to the efficiency of legal delivery?” 35% said no and 26% said it was “under consideration” (code words for we have a committee that could decide any year now).  In other words, only 39% of US firms have started to take action to deal with the most important change in their profession.

If you read the entire 131 page report (which can be downloaded for free), the good news is that there are many signs that law firm leaders increasingly understand that the world has changed and they must adapt.  The bad news is that so few have started doing anything.

If you are a regular reader of this blog you will not be surprised to learn that the first section I turned to was on legal project management.  I LOVED Altman Weil’s conclusion (p. viii) so much that I will quote the whole thing:

Invest in Legal Project Management

Perhaps no other long-term initiative will do more to support staffing innovation, pricing innovation, efficient delivery of services, improvements in margin and reductions in overhead than true project management training. It’s important to distinguish between a one or two day seminar which will not produce much long term value, and a systematic, hands-on approach that instills fundamental operational change. Firms that give their people the right kind of tools and training in this area will create new efficiencies for clients, improve profitability of matters, and create significant competitive advantage.

This underlines a point we have been writing about for years: traditional training to educate lawyers to understand LPM will not change behavior, any more than understanding how to run a marathon will enable you to complete one.  Behavior change requires practice, whether it’s through the kinds of coaching programs we offer, or other real-life hands-on approaches.  The point is, you need to do it, not talk about it.

This conclusion has also been supported by our research on Client Value and Law Firm Profitability, which will be published in a few months.  When I interviewed managing partners, chairs, and senior partners and managers from 50 AmLaw 200 firms, here’s what the managing partner of one firm that invested heavily in LPM education had to say:

I think project management probably will have the longest-term positive impact, but it’s been the biggest challenge, because it’s something that hasn’t been easily absorbed by a lot of the lawyers. When busy lawyers start scrambling around, the inefficiency creeps right up.

A few years ago, traditional training in LPM became the rage in a number of firms.  Several got to put out some great press releases describing themselves as leaders of the new LPM movement. But from everything we have heard, this education had little impact on the way anybody practiced law.  What has worked is one-to-one coaching, as described in my book Legal Project Management, Pricing and Alternative Fee Arrangements.  (A free copy of the chapter on LPM case studies can be downloaded from our web page.)

Does it matter how quickly firms move to increase efficiency and provide greater value?  In our study 85% said that firms that move more quickly in providing value will gain a competitive advantage.  Some respondents thought this was a life and death matter.  As one managing partner said:

I think the firms that are most effective are going to do well, and I don’t think everybody will survive. In the last several years, there have been several firms that went away. And I believe that’s going to continue.

A senior partner at another firm put it this way:

I think the market’s going to shake itself out. I think firms that can’t deliver more value will fail.

If that’s not scary enough, there’s more.  I have saved the most frightening news for last. 

In my opinion, the most revealing question in Altman Weil’s entire research was one that was just added to the survey this year for the first time: “Which of the following is a greater driver of decision-making in your law firm in 2014: Long-term investment in new pricing and service delivery strategies to lock in your most valuable clients or short-term profitability to lock in your most valuable partners?” An astonishing 44% are looking inward at their own partners rather than outward at their clients.

As Tom Clay, the primary author of the Altman Weil survey, noted in our research report:  “If a law firm cannot attract and retain good clients, nothing else matters.” At a moment in history when so many clients are demanding more value, it can be business suicide to focus on partners before clients.

The obvious explanation is that with all the lateral movement between firms, management is afraid that if they don’t focus on partners first, big rainmakers will jump ship and take their books of business with them.

But forward-looking firms are taking a longer view.  In our study, one chair noted that in his AmLaw 100 firm some rainmakers were the very people who were slowing down progress.  As he put it:   

To be perfectly honest, some of the partners in our firm who don’t get it, don’t want to get it. They’ve got a big book of business, and they would prefer us to just leave them alone. Law firms get very nervous about this, because they worry that these big, bad actors are going to take their big, bad book of business and go elsewhere. I say “Don’t let the door hit you on the butt on the way out,” because that’s not the culture that we’re trying to build. As long as we continue to reward bad behavior, we’re going to continue to get bad behavior.

Full disclosure: LegalBizDev is a strategic alliance partner of Altman Weil.  More disclosure: I began praising their annual surveys several years before we formed that relationship.

May 14, 2014

The most critical issues in legal project management (Part 3 of 3)

Assign tasks and manage the team

Like communication, management is not a strong point for many lawyers:

We did an internal survey where we asked, “How do you communicate caps and fixed fees to your team of associates?” Some said by email. I think only about 10% of them said that they actually talk to the group, get them together on a call, and explain the project. It doesn’t really happen. And when you don’t manage things well, it affects more than just the profitability. It affects the associate’s confidence in working with you in the future, because they get their time written off since they weren’t told the parameters.

Negotiate changes of scope 

In light of the problems with communication and management, it is not surprising that when the moment comes to negotiate a change of scope, many lawyers have problems:

We have people who recognize that the scope of a project has changed, but you would think they were 15 years old again and asking a girl to a dance. They never get around to making the phone call.

As far as negotiating changes of scope, there is enormous room for improvement. When something has gone bad, there is tremendous reluctance to have that discussion with the client.

When scope changes, the first thing you’ve got to think about is talking to the client and making sure that you’re on the same page as to what’s changed. That’s an area we still struggle with.

This widespread problem goes directly to the bottom line, as seen in these comments, the first from a managing partner, and the second from a CFO:

In the real world, almost no project is defined in advance so clearly that there is no need for changes. And it is in that need where the law firm’s expectations about profitability and return get thrown out the window. So if you’re not really careful on a management level about how the assignment changes, you very quickly go from, “Yup, we’re going to make money on this engagement” to “How much am I writing off again?” It is that time of year when I get the memos from people that say “Time for the write-offs.” And it’s astonishing to me, first of all, how many there are. And when you ask people why it happened, invariably, the answer is, “Well, we started out doing X, but really, it turned out the client wanted Y.” And unless you deal with the client up front about how those changes are going to be negotiated, you have that kind of mission creep all the time, and it’s costly.

We had a small criminal engagement on a fixed fee, and we went over it. I saw it and didn’t deal with it in a timely fashion, and we ended up with a lot of extra time. The original fixed fee was based on some local lawyer doing a lot of the leg work, which he didn’t do. We stepped in and did it instead. We won. But we never communicated that the other guy didn’t do his job and that we did the work, so we ate the money.

Identify and schedule activities

You can’t plan a project until you know exactly what needs to be done. One C-level executive highlighted the problem:

Identifying and scheduling activities: that’s where I feel like we immediately fall off a cliff. Even if we do the budget down to the level of timekeeper and task code, I know very few people who out of the gate start managing the case that way. Instead, people say, “I’ll monitor how we do against the overall budget, and if I start to see that we’re eating up too much of the budget too quickly, I’ll stop, and maybe I’ll go back and dig into this stuff.” A lot of it is backwards looking, where once they’re off track people ask what happened. And then we dig into the task codes and find a motion that they budgeted X hours for. We say, “Look at all the hours.” Then they realize the problem, but it’s too late because they’re not doing it in real time.

Assess risks to the budget and schedule

Lawyers specialize in assessing and managing legal risks, but when it comes to risks that affect time and money they are not nearly as effective. One senior partner used a football analogy to stress the importance of this type of planning:

Years ago, when Bill Walsh was still the coach of the San Francisco 49ers, he had his thing where he scripted out the first 25 plays of every game, which he stuck to no matter what. If they were down 21 to nothing, he still stuck with the script until he got through the first 25 plays, because he found that then people panicked less. Those were the Super Bowl years. I just think that in litigation sometimes we are much too reactive. A project manager would help us be much more proactive. They would allow us to resist the temptation to say, “Gee, we’re really busy on this case right now. Let’s just bring in another timekeeper to bill 40 hours,” and then that timekeeper falls off, all of which has inefficiencies.

Manage quality

If a client sees that the drive for efficiency leads to an unacceptable drop-off in quality, he will find a new firm. In the words of two managing partners:

Making sure we keep the client happy on quality is still, in the end, the highest requirement.

If you can’t manage quality, nothing else matters. But, it’s not sufficient. That’s the new paradigm that lawyers need to get through their heads. Quality is not enough, and it’s not a tool for getting better client value.

Meanwhile, many lawyers are still married to the perfectionism they learned in law school:

We’re focused on delivering the highest quality, and we are turning over every stone. I think it should be about delivering just enough quality. We’re not there at all, because we’re just trying to deliver the highest quality, at some level, without caring about the cost. We haven’t gotten to the part where we don’t turn over every stone.

It is going to take time for some lawyers to get the message:

I can’t believe I’m going to say this, but if anything we need to get better at focusing on what we need to do to meet the clients’ business objectives, not what we need to do to make ourselves feel good that we’ve just produced the greatest brief in the history of the law. And that is a monster hurdle to get over with successful lawyers at a top firm. Isn’t it amazing that you could produce a world class brief, and if it’s due at midnight tonight, you’ll work right up till 11:55, and you will be ready to file it and everybody will be high-fiving. But if at the last second, somehow there’s an extension for two days, you will work the next two days to try and make what was perfectly good, if not great, even better. That is what many lawyers do. It sometimes has absolutely no value to the client, but that’s what they’ll do.

May 07, 2014

Tip of the month: Commit to a definite number of marketing hours every week

The best business development plan in the world will lead to nothing unless you put in the time to follow up, week after week after week.  We recommend an absolute minimum of one hour per week to increase the satisfaction of current clients, plus another two to five hours if you are looking for new clients.

 

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