267 posts categorized "Legal Project Management"

October 19, 2016

Four ways to simplify legal process improvement (Part 1 of 3)

By Jim Hassett and Tom Kane, LegalBizDev

Traditionally, lawyers have been trained to place enormous emphasis on avoiding risk, and little or no emphasis on increasing efficiency. As Ron Friedman put it:

Clients often want to know if there are any major risks: “Let me know if there are any boulders in this playing field.” Lawyers often hear that and think they need to find not just the boulders, but also the pebbles. The fear of being wrong—and of malpractice—runs deep. “Perfection thinking” makes it hard to approximate, to apply the 80-20 rule, [or] to guide in the right direction but with some imprecision.

But as in-house departments are increasingly pressured to control costs, they in turn are pressuring outside law firms to find ways to increase efficiency. Business process improvement is one path to the lower costs that many clients are demanding.

While there is widespread agreement that clients also want legal project management (LPM) and that it pays off for firms, the field is so new that experts still disagree about exactly what should be included and excluded from its definition. These arguments have slowed LPM’s progress.  For example, consider these remarks from one AmLaw 200 firm leader we interviewed for the book Client Value and Law Firm Profitability (p. 89):

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.

We first became aware of the seriousness of this problem a few years ago when the director of professional development at an AmLaw 100 firm asked us to explain the differences between project management, process improvement, Six Sigma, and Lean. This was an extremely sophisticated client who had been researching this area for months, but she had heard so many different claims from competing consultants that she had trouble keeping them straight.

Process improvement, has gotten a lot of headlines in the legal world as a result of Seyfarth Shaw’s highly publicized success in using it to streamline work, along with Six Sigma and Lean. All three approaches originated in the world of manufacturing.

Six Sigma is built around techniques Motorola developed to eliminate the causes of manufacturing defects and errors. Lean was developed by Toyota to increase manufacturing efficiency by eliminating the “seven wastes” (excess inventory, excess processing, overproduction, transportation, motion, waiting, and defects).

Process improvement typically starts by defining the exact steps that are required to perform a legal process. This includes looking at every process from the client’s point of view, analyzing whether each step adds value for the client, and eliminating the steps that don’t.

Writing in Law Technology, Alan Cohen has noted that this traditional approach “can take weeks to create a map, but the result is a template that spells out the various phases of a matter—and an efficient way to do them.” If you consider the fact that Seyfarth has developed over 500 process maps, each of which took a team of lawyers and staff weeks to develop, you can see why Six Sigma for Dummies (p. 10) says the approach is “not for the faint of heart. It is intense and rigorous, and it entails a thorough inspection of the way everything is done.”

In my book, Legal Project Management, Pricing and Alternative Fee Arrangements, I described how Seyfarth has spent more than 10 years and millions of dollars refining its system. They have trademarked the term SeyfarthLean® and formed a separate company—SeyfarthLean® Consulting—as a wholly owned subsidiary which offers advice to law departments on how to work more efficiently.  However, the Seyfarth model has been so widely publicized that some law firms think that LPM equals process improvement.

We have frequently argued for a much broader definition of LPM, including any activity that increases client satisfaction and firm profitability by applying proven techniques to improve the management of legal matters. Thus, we see LPM as an umbrella term that embraces a very wide range of management techniques, including pricing, communication, process improvement, and much more.

Under this broad definition, process improvement, Six Sigma, and Lean are simply specialized approaches that fall under the more general umbrella term LPM. They are simply tools in the belt, to be used in some cases and ignored in others.

And when they are used, we recommend always looking for simpler and more efficient approaches, starting with the four approaches described in the next two parts of this series.

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


[1] http://www.prismlegal.com/wordpress/index.php?p=1026&c=1

[2] http://www.dailyreportonline.com/id=1202566995546/How-six-big-law-firms-get-serious-about-legal-project-management

[3] Link to the book on Amazon

October 18, 2016

My podcast on business development and LPM

If you’d like to listen to a 20 minute discussion about what lawyers should be doing to develop new business, try the recently released podcast of my interview by LeftFoot founder Nicole Giantonio.  The conversation is available for free in iTunes format on the LeftFoot website, and also on iTunes, Soundcloud, and Stitcher.

I talked not just about the key concepts from my Legal Business Development Quick Reference Guide, but also about the importance of legal project management.  After all, according to Altman Weil’s survey of Chief Legal Officers, the top three things that clients want these days are greater cost reduction, improved budget forecasting, and more efficient project management.  All three are related to LPM, and business development begins and ends with giving clients what they want.

October 12, 2016

Accelerating legal progress with Scrum

By Paul Saunders

In addition to using Kanban to increase efficiency, reduce costs, and enhance responsiveness to clients’ needs, Stewart McKelvey is also experimenting with Agile management techniques known as Scrum.

Scrum provides a framework for team members to organize themselves and conduct team meetings in relation to any project. Scrum originated in the software development world and has been defined as “a simple framework for effective team collaboration on complex software projects” and as “a management and control process that cuts through complexity to focus on building software that meets business needs.”

Scrum can be easily adapted to legal projects, which often have many moving parts that need to be coordinated frequently.

In Scrum, teams engage in periodic meetings in which team members are asked to give short and focused status updates. The frequency of these meetings is based on what makes the most sense for a particular team. For example, when working on a complex and time-sensitive corporate transaction with a looming closing date, meetings may be scheduled every day or second day to keep everyone on track. For a portfolio of litigation matters with less time sensitivity, meetings may be scheduled once every week or two based upon the needs of the team.

Regardless of the frequency of the meetings, each team member takes a turn answering three questions in two minutes or less:

  1. What did I do since the last meeting?
  2. What will I do before the next meeting?
  3. What is blocking me and/or what do I need help with?

Meetings are often held with everyone standing up, to keep them short. A critical aspect of the meetings is to ensure that the updates remain relevant to all team members by focusing on these core questions.

One of the essential aspects of Scrum is that every team member, no matter how junior or senior, must report his accomplishments and what is blocking him from proceeding to the next step. This creates accountability. Everyone on the team knows that he will need to report progress, or lack thereof, on a specific topic at the next scheduled meeting.

If the senior partners are not getting what they need, this technique gives them an easy forum to say so. By the same token, if a junior team member finds that he is blocked by something that a senior partner did or did not do, this gives him the chance to make it clear. It enables juniors to manage upwards. This is very effective, because the person is saying that it’s not me or you, it’s the requirement of what comes next.

When Scrum is used in combination with Kanban, when people provide their updates, each team member moves any cards that have progressed on the Kanban board and updates their capacity flags to indicate what they’ll be working on before the next meeting. Meetings are expected to last no more than two minutes multiplied by the number of people attending.

Everyone has attended meetings where one or two attendees wasted meeting time by discussing issues with little or no relevance to the rest of the group. However, requiring team members to stick to the three questions can sometimes be challenging, particularly where more senior team members are accustomed to directing to the discussion.

To address this, Scrum calls for a Scrum Master role. This is often someone who is not expected to carry out work on the project but instead is responsible for managing the process and ensuring that team members are properly adhering to the protocols. This person must have the authority to ensure that all team members answer their three questions and ensure that no one person is monopolizing the floor.

In our law firm’s culture, mid-level personnel, including senior associates and junior partners who aren’t expected to complete substantive work on the matter, are ideal Scrum Masters. In certain cases, the lead lawyer on a matter or alternating individuals can also serve the role, provided that she is able to ensure the team sticks to the protocol and isn’t afraid to intervene if the rules aren’t being followed. In other law firms, different individuals might be more effective. The key is that the Scrum Master has some influence over partners. Since he isn’t accountable for project deliverables he can serve as a more independent enforcer of the rules to keep everyone on track.

Scrum works best when the team also periodically conducts a lessons learned or after action review, often called a retrospective. These typically occur at the conclusion of specific projects or at set intervals (perhaps once every month or two). These meetings could run longer than the daily stand-ups (approximately an hour), but still involve all team members speaking an equal amount of time. The discussion would focus on reaching team consensus around the following three questions:

  1. What is working well?
  2. What is not working well?
  3. What should be tried that is different?

Based on the outcome of those discussions, the team would agree to fine-tune their approach and incorporate lessons learned that could be applied to future work.

Scrum can be seen as a laboratory in which a law firm applies the scientific method. If a series of steps has not worked and you haven’t made progress, it will quickly reveal the lessons learned and let you modify your plan to find a new series of steps.

Stewart McKelvey has seen immediate and significant results in its pilot tests of Scrum. The pace at which matters progressed through the various stages and were closed was significantly improved. This was largely caused by the discipline and transparency that was brought to the process. Team members were committed to move matters along each week and were held accountable for results in the meetings. Many of the participants remarked that they had never seen so much progress on so many matters in such a short period of time.

In addition, the process made it easy to see that some time entries were being rejected by the client because they weren’t sufficiently detailed to meet requirements. As a result, the firm developed a standard set of time entries to conform to each of the stages identified on the Kanban board and created text expansion codes in its time entry system. Now all lawyers and staff are able to type in pre-determined codes, and pre-approved and detailed time entry narratives appear automatically.

Scrum, Kanban, and other Agile techniques are not magic cure-alls that fit every legal process, but they can make a significant difference when they are used properly in the right situations. In the next few years, we expect the use of Agile techniques to grow rapidly at our firm.

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


September 28, 2016

Fourth edition of our Legal Project Management Quick Reference Guide published today

Vincent Cino, the chairman of Jackson Lewis, calls the fourth edition of our LPM Quick Reference Guide, “A must read.” According to Toby Brown, the chief practice management officer at Perkins Coie, “Every partner should use this book.” And Melissa Prince, the director of pricing and LPM at Ballard Spahr, calls it her “LPM bible.” The book opens with extended comments from these three experts, and 19 others, who describe how this encyclopedia of tools and templates can help lawyers increase value, client satisfaction, and firm profitability for both hourly and alternative fee arrangements.

When the first edition of this Guide appeared in 2010, LPM was essentially a brand new field, and this was the only book that explained “how to do it.” Since then, LPM has grown rapidly and become a mainstay of law firm practice.  At 400 pages, the fourth edition is almost twice as long as the third edition was, reflecting recent advances in the field.  

The philosophy of this Quick Reference Guide is summarized in its first few pages:

Please do not read this book.

This Quick Reference Guide is an encyclopedia of techniques to help lawyers become more efficient. Very few lawyers have the time to read this encyclopedia cover to cover. And even for the ones who do, merely reading about LPM will not make anyone more efficient. This book is designed to help you quickly identify the tactics that will have the greatest impact on your practice and adapt them to meet your needs.

Legal project management increases client satisfaction and firm profitability by applying proven techniques to improve the management of legal matters. It is not a simple set of steps that lawyers should apply to every case or matter, but rather a toolbox which includes a broad array of procedures and templates. Each lawyer must find the tools and tactics that will have the greatest impact for them…

Our examples draw on a rich and deep body of knowledge that project managers have developed over the last several decades to help businesses run more efficiently. This book describes and adapts the tactics that lawyers find most useful and ignores the rest.

LegalBizDev principal Mike Egnatchik is my co-author for the fourth edition, and the book also includes sections written by 25 contributing authors, including such thought leaders as Stuart J T Dodds of Baker & McKenzie, Richard G. Rosenblatt of Morgan Lewis, Tom Clay of Altman Weil, and the Law Firm Value Committee of the Association of Corporate Counsel.

The 412-page, 8.5” x 11” paperback can be ordered for $99.95 by email (info@legalbizdev.com), fax (917-386-2733), phone (1-800-49-TRAIN), or mail (LegalBizDev, 225 Franklin Street, 26th Floor, Boston, MA 02110). More information appears on our web page, including an order form showing the volume discounts on orders of two or more copies.

In association with the publication of this book, LegalBizDev is also introducing several new LPM products and services which use these tools and templates in:

  • Just-in-time training
  • Just-in-time support
  • Traditional training
  • Certification

For more details, contact us today (info@legalbizdev.com, 800-49-TRAIN).

September 21, 2016

Tracking legal progress with Kanban

By Paul Saunders

In 2015, after working as a corporate lawyer for seven years at Stewart McKelvey in Halifax, Nova Scotia, I agreed to devote 100% of my time to the newly created position of Practice Innovation Partner. My role is to develop and implement innovative technologies and systems for the firm and its clients, to increase efficiency, profitability, and client value. One of the first things I did in this new role was to pilot-test several classic Agile techniques at our firm, starting with Kanban.

Kanban is a management tool that originated in Lean manufacturing. The term loosely translates to “signboard” or “billboard” in Japanese. As law firms focus on increasing efficiency, reducing their costs, and becoming more responsive to clients, it seems logical to adapt this technique to work closely with clients in charting the stages of each case or transaction and to track progress.

Kanban is a highly flexible tool for planning and scheduling tasks that creates a visual representation of project teamwork to facilitate transparency, accountability, and collaboration. Knowledge work, such as software development and law practice, isn’t inherently visual. Progress often becomes buried in countless emails, status reports, and complex tracking spreadsheets. It is difficult to identify opportunities for improvement and to gauge progress when there is no single place where progress is tracked. Kanban makes this non-visual work visual.

In its simplest form, Kanban relies on a physical or virtual whiteboard with three columns: to do, doing, and done. All tasks that make up the project are represented by cards or post-it notes on a board. The title of each task, when it’s due, who is responsible, and any other pertinent details are written on each card. Cards advance from left to right on the board to track progress and coordinate work.

The beauty of the approach is its flexibility. Rather than having to periodically overhaul detailed project plans and realign tasks when change inevitably occurs, team members can simply re-organize the cards on the board. The approach also better ensures clarity in who is working on what when and creates accountability for results since members are expected to regularly report back on progress on the tasks they are assigned. It also shines a significant light on bottlenecks and can thus motivate teams to remove barriers that impede progress. The board can be organized by a junior partner or an associate, which produces the added benefit of avoiding some of the awkwardness of “managing your manager” by increasing collaboration and transparency.

Another critical aspect of Kanban is its ability to limit the amount of inventory or work in progress. Capacity restrictions are sometimes placed on team members so that they can only be assigned a limited number of tasks or volumes of work in order to permit them to focus on completing tasks rather than being overburdened through multi-tasking.

Kanban boards can also be highly customized by expanding the various columns for different purposes in a specific context. For example, to coordinate a portfolio of related projects or matters, a law firm practice group may want to expand the “doing” column to include different phases of work. In litigation these columns could include: matter intake, pleadings, production and disclosure, discovery, pretrial, trial, appeal, billing, and matter closing. In a corporate transaction, the phases could be: letter of intent, principal agreement and schedules, conditions, pre-closing, closing, reporting, undertakings, billing, and matter closure.

One of our first pilot tests of Kanban was managed by Patti Mitchell, a litigation partner practicing in insurance defense at our office in Halifax and the lead lawyer for a major insurance client there. She worked closely with the law firm’s client service team to use Kanban techniques to organize and streamline assignments in a multitude of cases and to move the matters through the standard phases of insurance litigation more quickly. The firm used Kanban techniques in conjunction with Agile Scrum concepts, in which issues are quickly identified at brief and regular stand-up meetings among all staff.  (These will be described in a followup post in this blog next month.)

“The insurance defense practice,” Mitchell explained, “was identified as an area of practice that would benefit from Kanban because it tends to be work with consistent volume and repetitive processes, but the matters were not moving as quickly as they could and we wanted to improve that aspect of service delivery for our clients.”

In addition, Mitchell noted, the firm chose to use Kanban with this client as a pilot project because its contractual requirements for service delivery were quite strict and the firm wanted to “see if we could improve upon deliverables.” The results were exactly what they had hoped for:

With Kanban, visual representation of the matters and stages of litigation allows us to see the volume of work and where processes are getting held up. It allows us to modify traditional processes that bog us down and remove barriers to meeting timelines. For example, we were able to develop a system of more quickly producing pleadings and delivery of documents for the client.

More substantively, we are now able to ensure that all matters are properly staffed and to assign additional resources more quickly when issues are identified in the weekly stand-up meetings. The process fosters a sense of teamwork and personal responsibility that results in improved service for the clients. Spin-off benefits also include the development of new and more consistent precedents and task coding for billing purposes. That makes preparation for discovery and billings more efficient.

Like the underlying work itself, the tools used to manage that work must also be flexible. Since Kanban boards are so versatile, a team should start with an approach that makes sense at the outset. The goal should then be to learn from the experience, see what works and what doesn’t work with the tool, and incrementally evolve the approach over time based on feedback from the team.

In addition to using Kanban in its classic sense with physical whiteboards and post-it notes, we are also currently experimenting with “virtual Kanban.” The firm has a cloud-based system to track assignments, which a number of lawyers have on their phone as an app. The next step is to expand the use of digital or virtual Kanban so that clients can use it as well to track the progress of a matter. That will require a security audit before the firm can put it in place, and the firm plans to start small. Whether the virtual approach works well or not, we expect that our use of Kanban will grow substantially over the next few years.

This post was adapted from the fourth edition of the Legal Project Management Quick Reference Guide which will be published next week.


September 14, 2016

Case Study:  LPM Certification at Tucker Ellis

By Tim Batdorf, Jim Hassett, and Jonathan Groner

In the November 2010 press release that announced the start of our Certified Legal Project Manager™ program, we called it “the first to award certification in this new discipline.”  Many other LPM certifications have been introduced since, but most offer simply a “certificate of attendance” a piece of paper you get for going to a workshop. In contrast, ours remains the most demanding program.  It is still the only LPM certification program designed for the small and select group of lawyers and staff who want to take a leadership role on these important issues, help change policy inside their firms, define new processes, and train others. 

To become a Certified Legal Project Manager™, participants must study over 300 pages of assigned readings, answer 18 essay questions about how these concepts apply to their situation, demonstrate their skills and knowledge with real-world applications in their practice, and pass a written essay test.  To determine its long-term impact, we recently went back and interviewed several participants who were certified years ago.  This is the first of several case studies that will appear in this blog addressing the progress they made during the program, and after it was complete.

Jonathan Cooper, a partner and trial attorney at Tucker Ellis in Cleveland Ohio, was awarded his certification in January 2012.  In his written project, he completed a “Mass Tort Litigation Checklist” which he has updated several times since.  The latest version is reproduced in the recently published fourth edition of our Legal Project Management Quick Reference Guide. 

In the years since he completed certification, Jonathan has gone on to apply many other project management tactics to change the way he practices law.   For example, he continued to refine his checklist of all the steps necessary to defend against an asbestos claim.  The checklist is now in the form of a flow chart which shows what to do in a variety of scenarios to make sure that no key steps are missed.  The firm now uses this checklist/flowchart for all asbestos matters, and, according to Jonathan “This one simple step greatly improved our practice.”

Tucker Ellis is a relatively young law firm, founded in 2003.  It differentiates itself by creating a unique type of client experience – one that focuses on the client’s ideas of success.  Jonathan says, “After all, if you can define the benchmarks of success in advance with the client, you can be appropriately rewarded for achieving them.”

Tucker Ellis handles hundreds or even thousands of similar cases for its clients.  This requires a high level of sophistication in the way in which the firm processes cases and high efficiency from its lawyers if the firm hopes to successfully meet its clients’ objectives profitably.  

Tucker Ellis also offers a significant number of fixed fee arrangements.  With fixed fees, Jonathan says, “The only way to make any money is to reduce the number of timekeepers who touch the matter. That’s why our firm has become an expert at doing things efficiently, with fewer people getting involved in each matter.”

That is not to say that LPM, or Jonathan’s certification, provided a magic bullet that immediately addressed all of the firm’s challenges.  “The most challenging part,” Jonathan says, “was attempting to ‘preach the gospel’ of project management to other practice groups within the firm. It was not immediately obvious that project management would succeed because it’s not easy to get the typical lawyer to change the way in which he or she does things… It remains very hard for some lawyers to give up on the idea that every case is unique and that every rock needs to be turned over in a particular case, even though we’ve already repeatedly turned over that rock in other cases.”

The process of changing lawyers’ behavior is never as quick as LPM proponents would like, but at Tucker Ellis LPM has clearly paid off.  For example, after overcoming initial skepticism, the firms’ ERISA lawyers discovered that they could find commonalities in their employee benefit plans which allowed the practice group to regularize its processes and become more efficient and profitable.  Although it took a while, Jonathan says, “Adopting LPM has started a sea of change at the firm.”   

Tucker Ellis lawyers now realize that much of what they do can be boiled down into common elements that can be repeated.  As Jonathan summed it up: “The key to success in many areas, including our asbestos and medical products cases, is efficiency.  The firm has developed repeatable processes that give clients very high odds of success.” 

September 07, 2016

Tip of the month:  Make sure you clearly understand client needs at the beginning of each matter

What would the client consider to be a successful outcome?  What are their overall business priorities, and how does this matter fit in?  For a list of “15 questions to ask clients to help define scope,” see the Fourth Edition of our Legal Project Management Quick Reference Guide.


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

August 31, 2016

How pricing can affect legal practice

Guest post by Carl Herstein, Chief Value Partner, Honigman

Changes in pricing lead to changes in the way law is practiced. 

For example, the way contingency fee lawyers practice is different from the way most commercial full service business firms practice. At Honigman, we have a very big contingency fee segment of our practice in the real estate tax appeals area. So I’ve gotten to see how contingency practices work. They are enormously efficient. As a general rule, lawyers don’t do things until the last minute. That might be thought of as a vice, but call it “just-in-time management” and suddenly it becomes a virtue! 

Now, traditional commercial clients like to talk a lot about their cases, especially if they have in-house counsel. It’s their life, after all, and they are accountable for what happens in these cases. As a result, they often want frequent updates and strategy discussions. The biggest complaint one hears about contingency fee lawyers is “They don’t want to talk to me.”

That’s because for a lawyer on contingency, after communicating what is absolutely necessary, talking is a waste of time and therefore money. It’s a very different model: “We’ll tell you when we think you need to know something.” Now, I’m not suggesting that if you are on a contingency you shouldn’t talk to your clients, and I am exaggerating a bit for effect. But the point is that the billing arrangement changes the perception of the value of the interaction. If somebody wants to call you on the telephone and is willing to pay you $450 to $1,300 per hour to listen to them talk, you are happy to listen.  But, if it doesn’t make any difference to the fee you’re going to collect – or actually reduces it – maybe you will want to move that call along a little faster! 

Similarly, if you’ve got the billion-dollar case, it doesn’t matter how many interesting legal issues there are to chase down or how uncertain the law is. You’ll do the legwork, and the client will want you to. Otherwise, lawyers need to make judgments about what their clients can afford.

Clients will tell you, “Don’t bankrupt me by doing a perfect job,” which is really hard for the current generation of lawyers to deal with. Sometimes a client can talk to a lawyer and say, “We are going to have a problem with this case because fees are already $600,000, the most we can collect is a $1.8 million, and we haven’t even gotten to trial yet.”

And they’ll answer, “You’re not asking me to commit malpractice, are you?”

No one wants anyone to commit malpractice, but you have to make judgments. You can’t bankrupt your client while you worry about perfection. Younger lawyers are usually better able to grasp these dynamics. They are flexible and adaptable; they see the way the world is changing. People my age, my partners and many other lawyers whose world is different than it was when they were growing up – we’re the ones who have the hardest time with it.

This guest post is an excerpt from Carl Herstein’s thought provoking article “The Changing Legal Market: Some Thoughts for Law Students,” originally published in Of Counsel, Wolters Kluwer, August 2016.

August 24, 2016

Three causes of high legal fees:  Perfectionism isn’t the only challenge

Guest post by Carl Herstein, Chief Value Partner, Honigman

The AmLaw 200 and many smaller firms are in the early stages of trying to improve efficiency and provide higher quality at lower costs.  There are three major trends that have led to the ever-increasing costs of legal services and to the segmentation of the legal market:

1) Lawyers have to deal with the rapidly expanding size, scope, and complexity of American and international law. 

2) The impact of technology on the law.

3) The nature of the American legal system, with its emphasis on perfect procedure and perfect outcomes, is a decisive element. 

Those trends, in turn, have inspired a focus on improving the process of providing legal services, reducing costs, and improving quality.  The third point – perfectionism - is talked about a lot, but the first two have inspired far less discussion.

Why do I talk about the size, scope, and complexity of the law? Forty years ago, when I graduated from law school, at least it was a manageable proposition to try to do legal research. Nowadays, with the incredible number of cases, sources, and materials out there, it’s almost impossible in certain respects. Similarly, while there were statutes and regulations at the federal, state, local, and international levels, it was complicated but not overwhelming. In my judgment, it is now overwhelming. 

In 1976, when I left law school, there really was no environmental law. There was no healthcare law, no ERISA, and no significant practice in various other areas.  Now there are departments in each of the major law firms to deal with these things.  Law is more and more complex, so there’s more and more work for lawyers and law firms to handle. 

And of course we have a love-hate relationship with technology. Technology allows us to access all of these hundreds of thousands of cases. But the more you have, the more you have to encompass. Technology allows clients to preserve all sorts of data in the form of emails, voicemails, documents, notes, etc. Guess what: discovery in litigation matters is a herculean task. Again, new technology is helping us sort these things out, but every time it helps us solve a problem, it makes other problems more complex. 

When I started out, the typical commercial mortgage document was five to fifteen pages in part because it actually had to be typed. Now, it’s not surprising to get a 125- or 150-page commercial mortgage document. One of the resulting problems is that very few buyers can afford to have a lawyer read the whole thing. It takes five or six hours to read one of these documents and actually figure out whether it all makes sense. 

If you do read one of them, often you find that some of the provisions don’t jive; that, in attempting to address every potential problem in detail, people have just made terrible problems for themselves. So just a bit of gratuitous practical advice here: if you are writing documents, shorter and simpler is often better. 

We have a quest for perfection in America. This virtue is also a vice. We have wonderful procedural protections. We have tremendous appellate rights. If you have a claim, in many respects you have all the time in the world to prosecute it to a conclusion. Unfortunately, it makes the cost of dealing with a legal matter almost incalculable in many situations.

As a result of these factors driving ever-higher legal costs, the marketplace has segmented. Let’s say that you work in a 100-plus person law firm. A relatively modest commercial case comes in the door with a mere $1 million at stake. Since yours is not a mega-firm, but just a good regional firm like some here in Detroit, your clients are only going to be paying a mere $400 or $500 per hour for an experienced partner’s services. They are going to get billed $300 per hour for the second lawyer; perhaps $175 per hour for a legal assistant. You’ll have to hire an expert with similar costs, perhaps several. You’ll need a firm to help you with the electronic discovery simply because we have a few hundred thousand documents to review. 

Figure a seven-10 day trial could cost you a mere $150,000. It then probably costs $200,000 to get up to the trial with a complaint, motion practice, and discovery.  Now you’ve got a $350,000 budget for your million dollar case. No wonder clients think costs are out of control! 

Imagine you’re the defendant in that case. You think you have been wronged, not the other way around, yet the plaintiff is demanding $1 million from you. Your lawyers tell you they are going to charge $350,000 to vindicate you in a situation where you think your liability is zero.


This guest post is an excerpt from Carl Herstein’s thought provoking article “The Changing Legal Market: Some Thoughts for Law Students,” originally published in Of Counsel, Wolters Kluwer, August 2016.

August 17, 2016

Tracking and controlling costs (Part 2 of 2)

By Steve Barrett and Jim Hassett


Step 3:  Compare planned spending against actual spending at regular intervals

If the firm does have timely information going into the system, the next step is to get it out.

Whatever accounting package your firm uses -- whether it is Elite, Aderant, Juris, Rippe Kingston, or another -- it already has a number of built in features to assist budget tracking.  The exact details vary not just from one program to another, but also depend on the version your firm is running, and any add-ons they purchased.  Since features are also constantly being updated and enhanced by software vendors, the best way to find out exactly what your firm’s software can do is to talk to your finance staff.

There is no one best solution for tracking.  The best answer for you will depend on client needs, the way you like to work, the features of the software your firm already owns, and how much time is required and available for assistance from finance personnel.  (Depending on your software, your finance department may simply not have enough staff available to implement a solution which is technically possible but time consuming to set up or administer.)

The need to talk to appropriate personnel is especially strong if you work at one of the many firms that has developed, or is in the process of developing, its own individual custom applications to track and report spending.

During your discussion, you may want to talk about how practical it is to set up features in advance such as: 

  • Initial budgets for a matter, phases, tasks within phases and/or work in progress (WIP) on individual tasks by each timekeeper.
  • A set of specific tasks and phases (whether the standard UTBMS set or a custom developed set).
  • A standard set of prose descriptions to identify tasks, with uniform nomenclature. (In many packages, you can enter a task name in the pre-designated user-defined task field, typically with a 60- or 80-character field text limit.)
  • The ability to limit which timekeepers are allowed, or not allowed, to bill time to a particular matter.

Then you should discuss the most practical way for you to review the data, such as:

  • Summary reports by matter – The finance department may be able to set up a simple report that can automatically be generated every week, every month, or at whatever reporting interval you specify.
  • Summary reports by client – It may be practical to track and report on overall client charges (by percent, absolute amount, retainer or credit limits), as well as the phase, task or individual timekeeper reports.
  • Excel spreadsheets – If you like to work in Excel, reports can often be delivered in this format at your request (e.g. simply showing three columns: the initial budget, actual spending to date, and remaining budget).
  • Alarms or flags can be set to warn you – via computer-generated automatic e-mails – if a matter is running beyond its budget for a period, or any time a certain number of dollars have been spent, or whenever a matter has spent any pre-defined percentage of its budget. For example, you could request that emails be sent to you automatically when you reach 25%, 50%, 75%, 90%, and 100% of spending).

In addition to the features in standard accounting packages, and the custom programs some firms have developed, there are a number of related software tools that firms use to track and analyze financial metrics, such as Redwood Analytics and DataFusion’s Intelliquest family of analytic tools.  In the last few years, legal project management software has also started to emerge as a new category, including Prosperoware’s Umbria, the Cael™ app suite from Elevate, and Randy Steere’s Budget Manager.  A few years ago, Engage was the leading software in this space, but late in 2014 Thomson Reuters announced that they would stop supporting the product in 2017.

In summary, there are so many options and variations in this area, and they are changing so rapidly, that if you want to know the most practical way to track budgets in your firm, you will need to talk to the appropriate staff.

Step 4:  Define a plan in advance to address critical gaps between planned spending and actual costs

We’ve discussed this critical step before in several blog posts.  For example, see the guest post by Stacy Ballin, a partner and General Counsel at Squire Patton Boggs, entitled “Scope changes in litigation.”  Another related post in this blog is entitled “How to track legal work that is out of scope” and describes how some firms are using special task codes for out of scope work to make lawyers more aware of the issue.  The fourth edition of our Legal Project Management Quick Reference Guide, which will come out in October, includes some new resources on this topic, notably an article by JT Stuart Dodds, the Director, Global Pricing and Legal Project Management at Baker & McKenzie, entitled “Establishing a change control process.”

At the end of the day, the details of the system you use to address gaps is less important than the simple fact that you have set some rules in advance.