Bloomberg Law Reports recently published this article which I wrote with Jonathan Groner entitled “How legal project management is changing the way services are marketed.” To download a pdf of the complete article, click here.
These days, so many clients are demanding LPM that people sometimes lose sight of how new it is, and how much remains to be learned. Most law firms are better known for their love of familiar precedent than for their innovation. In April 2010, when Dechert announced that it had trained all of its partners in LPM, the first reaction of many firms was “We’d better consider LPM training.” Their second reaction was, “What is LPM anyway?”
Now, several years later, experts are still arguing over the best ways to implement LPM, and even its very definition. Some prefer a traditional narrow definition built around timelines and budgets, the type of planning that is familiar to anyone who has ever used Microsoft Project. Many in the narrow definition group want to draw lines in the sand to clearly distinguish LPM from related efforts such as knowledge management and process improvement.
We favor a broader definition that avoids hair splitting: LPM adapts proven management techniques to help lawyers achieve their goals, including increased value and profitability. It is an umbrella term that includes budgeting, communication, process improvement, knowledge management, time management, and much more.
At LegalBizDev, we recently began conducting confidential in-depth interviews with AmLaw 200 leaders for a study that will be published next year on “Client Value and Law Firm Profitability.” BigLaw is using LPM to balance unrelenting client demands for greater value against the need to remain profitable enough to sustain business over the long term.
We are still collecting this data, so we cannot yet report clear trends. However, we have already been struck by the number of law firm leaders who, under the cloak of anonymity, were willing to admit how difficult it is to change lawyers’ behavior. Several have even said that while their firms invested in substantial training programs and publicized this LPM “success” on their web pages, much of this education has had little impact on behavior. Most of their lawyers are still practicing the same inefficient way they did five years ago, as if the more hours they put in, the more money they will make.
One set of questions in our standard interview asks managing partners and senior executives to rate the relative importance of eight key issues in LPM: defining scope, scheduling activities, managing teams, planning budgets, avoiding risks, managing quality, managing communications, and negotiating changes of scope. While the rankings vary from firm to firm, most of the answers so far indicate that the most critical factors require fundamental changes in lawyers’ behavior rather than tasks that can be delegated to a professional project manager or automated with new technology.
Communication is the key. For example, one senior partner in our research noted that lawyers must say to their clients: “Here’s what this should cost. Here’s how you can help us keep it within this cost. Here are the things that could really knock it off the rails. Let’s be sure we are in accord on some of the assumptions that are built into this budget or fix the arrangement. And then we’re going to talk to you along the way and tell you if we’re getting off track.”
This emphasis on changing lawyers’ behavior is consistent with the results of a recent survey by American Lawyer Media Legal Intelligence, which found that the top three benefits reported by firms that had implemented LPM weremore productive client relationships, increased efficiency, and improved communication.
At Baker & McKenzie, a firm with over 4,100 lawyers in 46 countries, Stuart Dodds, director of global pricing and legal project management, described how client communication can be tied to the new budgeting and tracking tactics that are also part of LPM. “We are capable of going to the client with better, more granular reporting, so that there are no surprises,” Dodds says. “That gives the client a great deal of comfort. For example, we have one large UK-based client whom we were able to tell precisely what percentage of our recent matters came in within budget. To be able to say that is a very powerful marketing tool.”
Dodds says LPM is now “sewn into the fabric” of the firm. He believes that the legal market has reached the point where a firm’s LPM expertise is “no longer just a differentiator, but actually an essential” for clients and prospective clients to know about.
Many firms are debating whether LPM requires training and coaching lawyers or hiring outside professionals. Baker & McKenzie does both. For lawyers, they offer training and coaching at three different levels: some are taught just the basics of LPM, while others receive more advanced training. In addition, the firm has a dozen project managers on its staff, and is considering hiring more.
“Clients sometimes ask how many dedicated project managers we plan to commit to their work,” Dodds says. “There are many drivers for this new emphasis, including, quite notably, the fact that the clients are accustomed to doing project management themselves in their own businesses.”
For example, Baker & McKenzie recently worked with a client on a complex merger and acquisition matter, with filings necessary in nearly 50 jurisdictions around the world. Both the client and the law firm got project managers involved from the start.
“The very fact that we could go in with an equally qualified project manager was very important to the client,” Dodds says. “Both our project manager and their project manager were key members of the team. It was almost as if you took the matter out of the legal world and placed it in the consulting world.”
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