296 posts categorized "Legal Business Trends"

August 09, 2017

How to increase new business through active listening (Part 1 of 2)

Over the years, I’ve written quite a few times in this blog about the importance of listening. But in my opinion, this topic cannot be emphasized enough, whether you are focused on legal project management, business development, or just relating to your own family.

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 explains that effective leaders must be good listeners so that they can sense how employees feel, and then channel that energy into the most productive directions.

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 hard for so many lawyers? Because you have to talk less. (One of the reasons I am a bit of a fanatic on this topic is that, like many lawyers, I would rather talk than listen.)

Many experts say that when you are building business relationships, you should spend 80% or more of your time listening. But when lawyers meet potential clients, many think that they should spend all of their time listing the wonderful things they 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 don’t argue. That’s another reason many lawyers find it difficult. To listen effectively, you must give up the need to be right.

Improved listening is not only helpful in finding new clients, it will also strengthen relationships with existing clients. From a project management perspective, this may include not just communicating about the details of a particular matter, but also asking general questions about a client’s perception of value.

This brief series lists over 60 questions that will be helpful in preparing for client discussions. Just pick a few key questions that fit your  situation, schedule a meeting, and let the client talk 80% of the time. Do not argue or object to criticism, just listen.

You could start with these very direct questions:

  • How could we increase the value of the services we provide?
  • How satisfied are you with our services, on a scale from 1 to 10?
  • What could we do to increase our rating?
  • What do other law firms do that you really like?

For many additional questions, you could review the online resources published by the Association of Corporate Counsel.  For example, see their one page introduction to getting started with the ACC Value Challenge entitled “Meet.  Talk.  Act.”   It recommends that law firms begin by arranging “a two-hour bag lunch” with top clients “with a single question for discussion:  Working together, how do we improve the value of legal services?”

They then list seven issues that may be particularly relevant in the discussion:

  • How can we reestablish trust and improve our relationship, on both sides?
  • How can we assure an adequate flow of work so that outside lawyers understand the client better and can be more efficient in what they do?
  • How can we get junior lawyers better trained, priced at more reasonable levels, practicing law more on the front line, and less likely to leave?
  • How can we better budget and manage costs and staffing?
  • How can we better institutionalize the relationship?
  • How can we evaluate progress and performance?
  • How can we create a culture of continuous improvement, on both sides?

Part 2 of this series will list over 50 additional questions lawyers could use to improve active listening.

This series was adapted from the fifth edition of the Legal Project Management Quick Reference Guide, a frequently updated online library of LPM tools and templates.

July 26, 2017

Seyfarth’s recent layoffs:  Much ado about nothing

Many people have been asking us lately whether Seyfarth’s layoffs of about 40 lawyers (out of over 900) a few months ago represent the beginning of the end for legal project management (LPM).  Our answer is very simple:  absolutely not. In fact, the entire LPM movement is still at the beginning of the beginning.

When the layoffs were announced, Law 360 published an article entitled:  “Seyfarth Shaw Layoffs Could Be New Normal For BigLaw.”  It quoted several leading experts about the challenges of a marketplace in which “demand for law firms remains sluggish.”  As Tom Clay, a principal at our strategic partner Altman Weil, put it: 

“This has nothing to do with Seyfarth and everything to do with what’s going on with the profession.  The reality is there isn’t enough work to keep everyone busy… Many law firms are going to have to … [resort to layoffs], and some have been quicker to act than others.”

Yet, given Seyfarth’s fame as the first large law firm to embrace LPM, the questions about implications have continued to linger.  The American Lawyer published a followup piece several months after the layoffs were announced, which asked again: “What [do the layoffs] say about Seyfarth’s lean strategy a dozen years in?  And what [do they] say about the broader LPM movement?”

Like the earlier analyses, this article argued that the layoffs resulted from changes in the profession rather than from LPM:

“Seyfarth’s financial results over the past five years have mostly outperformed the AmLaw 100’s…That occurred even as Seyfarth’s five year headcount outpaced the industry, 15.6 percent to 10.7 percent.  But that head count caught up to the firm last year.”  

In other words, Seyfarth has been doing quite well compared to other firms, but simply grew too fast.

The article also noted that: "Demand for the firm's SeyfarthLean Consulting arm, which helps clients make their legal departments more efficient, has never been stronger.”

Despite the fact that the experts agree LPM did not cause the layoffs, we predict that this is a situation where many lawyers will remain blissfully unaware of the facts, and will continue to use the layoffs as a reason to argue against LPM.   Many lawyers are unenthusiastic about the kind of attention to finance and management that LPM requires.  They would love to hear that they could forget about LPM, because it was just another fad that had run its course. 

Firms are embracing LPM not because their partners want it, but because their clients want it.  In its most recent Chief Legal Officers Survey, Altman Weil asked clients “What would you most like to see from outside counsel?”  The top three answers were greater cost reduction (53%), improved budget forecasting (43%), and non-hourly based pricing structures (36%).  All three are related to LPM, so, as we’ve often repeated, you could say that the top three things legal clients want these days are LPM, LPM, and more LPM. 

To sum it up, the fact that Seyfarth laid off about 40 lawyers means only two things:  they grew too fast, and they were wise enough to correct the mistake. 

The LPM sky is not falling. In fact, we predict that a few years from now almost no one will remember the Seyfarth hiccup.  The firms that will be healthiest will be the ones that have given clients what they are asking for: LPM, LPM, and more LPM.

July 12, 2017

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

By Jim Hassett and Jonathan Groner

Stuart J.T. Dodds is director of global pricing and LPM at Baker McKenzie, one of the largest law firms in the world, with over 4,500 lawyers and 77 offices in 47 countries.  Dodds is widely recognized as a leader in linking LPM to business development, and he is the author of two related books published by the American Bar Association:  Smarter Pricing, Smarter Profit, and Pricing on the Front Line.

In a recent interview, Dodds noted that

In RFPs lately, we have seen very specific questions such as, ‘Do you have project managers who have certification? How and where have they supported client matters? Can you give us case studies for how you would deliver LPM concepts in a specific commercial situation?’ This gives the client a good basis to compare one firm with another. It’s more than the words on the page. It’s what the firm actually does. I think this is a very healthy development.

In fact, Dodds says, members of the senior project manager team that he heads (including over 40 project managers) typically become directly involved in the pitching process and interact with prospective clients as part of the business development team. 

This is how we tell the client that we will engage with them, if we are selected. We will take these nonlegal professionals into the client discussions in order to achieve the best result for the client.

When the firm begins work on a large client matter, a project manager is assigned to work alongside the attorneys. For smaller matters, the firm relies on a training program that it developed and executed in-house, in which all of its attorneys have been trained in project management to a high enough level that they can handle the basics of budgeting and planning, with occasional assistance from a project manager. As Dodds says, in those instances the use of LPM is “attorney-driven but expert-supported.”

Interestingly, as director of global pricing and LPM, Dodds reports to the firm’s Chief Marketing Officer. His 40 project managers are an integral part of the global firm’s nearly 400-person-strong marketing staff.

We see ourselves as part of the value proposition for our clients. We are not a cost to the firm. Rather, we contribute to the profitability of the firm.

This type of integration with the marketing department is currently unusual, but may reflect a growing trend.  In 2015, we published an article related to this topic in Bloomberg BNA’s Corporate Counsel Weekly™ entitled “Why Law Firms Must Change Their Marketing Priorities.”

The article started with an account of how Kramer Levin, a firm with over 350 lawyers in New York, Silicon Valley, and Paris, hired Jennifer Manton as its Chief Marketing Officer in 2014 in part because of her experience in using LPM to meet client demands for improved communication and efficiency.  One of the first things she did after starting at the firm was to arrange for seven lawyers to complete LegalBizDev’s one-to-one LPM coaching.  This pilot program led to increased confidence and ability to provide better price estimates, client communications and more.  Since then, Kramer Levin has gradually expanded this program with more coaching and other LPM initiatives.

However, our Bloomberg article also noted that

One of the many interesting things about this story is that Manton is a former president of the international Legal Marketing Association (LMA), which in the past reflected the nature of the profession by being associated with a more traditional approach to marketing. Marketing is often defined by the ‘Four Ps’: price, product, promotion, and place. Historically, law firm marketing departments have been involved almost exclusively in promotion. In today’s economic environment, that is a recipe for disaster.

It would be nice to report that since that article was published the approach of legal marketers has changed rapidly, but the phrase “rapid change” is rarely found in articles about law firms.

In fairness, LMA has recognized the importance of these issues by organizing an annual “P3 conference” (focusing on the “three Ps” of pricing, project management and process improvement, all of which are included in our definition of LPM).  However, to see how little integration has occurred to date between marketing and LPM, one need look no further than the titles of the speakers at this conference.  Of the 69 speakers at the most recent P3 conference, only 10% had titles that included words like marketing, business development or sales.

Nobody has ever said that implementing LPM will be fast or easy.  But the firms that are effective today in changing lawyers’ behavior, delivering more value, and meeting client needs will be tomorrow’s leaders in business development.

 

June 28, 2017

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

By Jim Hassett and Jonathan Groner

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

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

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

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

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

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

He went on to explain that:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 To be continued in Part 2....

June 14, 2017

New research on how to improve legal efficiency, and much more

According to Altman Weil’s recently released 2017 Law Firms in Transition (LFiT) survey the top two trends that are transforming the legal profession are “More price competition” (95% of the 386 managing partners and chairs who participated in the survey said this is a permanent change) and “Focus on improved efficiency” (94% said this is permanent).

So what are law firms doing about these fundamental changes in the marketplace?  Not nearly enough. 

When the LFiT survey asked “Has your firm significantly changed its strategic approach to the efficiency of legal service delivery?” only 49% said yes.  (20% said it was “under consideration,” and the remaining 31% replied with a flat no.)  These proportions have been surprisingly steady for the five years that Altman Weil has been asking this question.  It seems that about 20% of firms have been considering change since 2013, but they still haven’t done anything about it.  

Could the slow rate of change reflect the fact that clients don’t really care about efficiency?

No, that’s not it. In Altman Weil’s most recent Chief Legal Officer survey, the number one service innovation that clients wanted was “greater cost reduction.”  There are only two ways to meet this fundamental requirement:  become more efficient, or cut into your prices and profits with discounts.  (These days, most firms seem to be choosing deep discounts, sometimes to the point of what consultant Bruce MacEwen has called suicide pricing.”) 

Could the failure to act reflect a belief that the pace of change will slow down, or that it doesn’t matter? 

No, that’s not it either.  In fact, 72% of the LFiT respondents believe that the pace of change in the legal profession will increase (p. 2).  The fact that more than half of all law firm partners are “not sufficiently busy” (p. 36) also suggests that the forces of supply and demand will continue to put downward pressure on prices. And in our research for the book Client Value and Law Firm Profitability, 85% of AmLaw 200 leaders said that firms will have a competitive advantage if they change more quickly.

When LFiT respondents were asked “how serious are law firms about changing their legal service delivery model to provide greater value to clients?” the median rating was just 5 on a scale from 0 to 10 (p. 11).  If that’s not bad enough, clients think it’s even worse.  When clients were asked the same question in the Chief Legal Officers Survey, their median rating was a distressing 3 out of 10 (p. 23).

When directly asked “Why isn’t your firm doing more to change the way it delivers legal services?” the number one answer was “partners resist most change efforts” (65%, see p. 14).

Summing it up: Clients want lower prices; more than 9 out of 10 law firm leaders believe there is a need to become more efficient; but less than half of law firms are doing anything about it.  These results may be alarming, but for grizzled law firm veterans, they are not really surprising. 

As Eric Seeger and Tom Clay, the authors of the LFiT, noted on the first page of their report (p. i) “Law firms are slowly changing [but]… we see firms making only cursory investments where they should be aiming for broader, deeper transformation.  And still many partners resist change in all its forms.”

But wait, the slow pace of change is not the only problem.  It gets worse.  When law firms do try to change, they often employ the wrong tactics. 

This year, for the first time, Altman Weil listed eight of the most common tactics to increase efficiency, and they asked which ones each firm was pursuing. More importantly, they asked which tactics “have resulted in a significant improvement in firm performance?”  The graph below (adapted from p. 57) summarizes their findings:

LFiT_Graphic_DSJ2

Note that the two tactics that firms are using most often (knowledge management and using technology tools to replace human resources) are among the least likely to actually improve performance. And the two that have had the greatest impact (shifting work to contract lawyers and to paraprofessionals) are among those least used.  Clearly firms should reconsider their priorities.

If you study the graph above closely, you may also notice another fact that supports an argument we’ve been making for years:  project management training finished dead last in effectiveness.  In 2010, many firms first became aware of LPM when one AmLaw 100 firm got a lot of headlines by training every partner in their firm.  Lawyers love precedent, so that led to a fad of LPM training.  As explained in a post in this blog we here at LegalBizDev refused to participate in this fad, and declined to bid on RFPs that took this approach.  We knew from our two decades in the training business that it would simply not work.  As noted, in our recent posts on the “Top five ways to increase LPM results:   

It is not exactly news that education does not necessarily lead to behavior change. Taking a workshop about how to lead a healthier life by exercising regularly, losing weight, and eating more vegetables does not mean that you will actually do any of these things.

That’s why for years we have recommended that firms start with one-to-one coaching to solve problems that lawyers care about and to produce behavior change and quick wins.  These tactics have been proven to overcome the partner resistance which is slowing so many firms.

While this post focuses on efficiency data, that’s just the tip of the iceberg of the 124 page, free 2017 LFiT report.  The report provides a gold mine of additional data on the key topics that law firms need to focus on to prosper in the current climate, including profitability, staffing, and growth.

Many of these findings should affect your strategy.  To cite just one example, the tactic that law firms rely on most to improve pricing – developing data on the cost of services sold – is also the least likely to improve firm performance (p. 62).  The tactic that is most likely to improve performance is also the one used least often:  adding a pricing director or assigning pricing responsibilities to a current staff member.

As Seeger and Clay summed it up (p. iv): 

Firms that pursue thoughtful efficiency initiatives and stick with them will improve internal performance and add value for clients.  Firms that do not will experience competitive disadvantage over time.  It can cost very little to test-run pilot programs in these areas, and we believe it is an investment worth making.

 

A free copy of the 2017 LFiT can be downloaded from the Altman Weil website

Full disclosure:  LegalBizDev is a strategic partner of Altman Weil, and we specialize in the very types of pilot programs they recommend.

 

May 31, 2017

The top five ways to increase LPM results (Part 2 of 2)

by Jim Hassett and Tim Batdorf

3.  Publicize successes within the firm

The lawyers who achieve quick wins often become internal champions who spread the word to their partners.  This is most effective when the firm establishes procedures to publicize successes internally.

For example, Bilzin Sumberg, a Miami-based firm with more than 100 lawyers, started with a panel discussion at a retreat in which three lawyers who had completed LPM coaching described their experience and results.  One of the three, Al Dotson, the firm’s Land Development & Government Relations Practice Group Leader, described how his LPM activities had led to new business in just a few months.  Dotson’s practice involves public-private partnerships in economic development in south Florida. It includes securing land use, zoning, and other key government approvals and permits for large real estate developments. His clients loved the LPM approach because they use project management to run their own construction businesses. Within a few weeks of starting the coaching, one of his clients was so impressed by a legal project plan Dotson had produced that he asked Bilzin to take on a significant amount of new work.

Based on the endorsement of internal champions, the majority of Bilzin Sumberg's partners volunteered for and completed LPM coaching.  They then proceeded to work LPM concepts into the very fabric of the way the firm operates, as described in a case study on our web page.

LPM successes can also be publicized in practice group meetings; through emails from firm leadership; at firm retreats, lunch and learns, panel discussions; and in many other ways.  

4.  Use just-in time training materials

In our three decades in the training and coaching business, the profession has changed radically.  When we started our company in 1985, most training was built around classes and workshops.  These days, it is far more common to use a just-in-time training approach which enables people to solve the problems they have, the moment they have them.

For example, if you need to use some unfamiliar features of Microsoft Word, it is very unlikely that you would consider taking a class. You will simply find the exact information you need in online help, precisely when you need it.

This approach has been applied in almost every field you can think of, including project manage­ment. When a research study of “The use of just-in-time training in a project environment was published in the International Journal of Project Management, the authors pointed out that “Around 40% of the knowledge acquired in training is lost after a break of one month, rising to 90% after six months.”  They then performed an experiment to show how the problem could be solved by providing access to tools that allow people to solve the problems they care about, just in time.

Full disclosure:  LegalBizDev has developed the most complete library of tools and templates to support just-in-time training for LPM.  This library has grown to over 400 pages in the fourth edition of our Legal Project Management Quick Reference Guide.  Lawyers in our coaching and training programs have used this book to quickly find the information they need when they need it.  Whether they want to define the scope for a new matter, plan a budget, increase delegation, improve client communication, or increase efficiency in other ways, the Legal Project Management Quick Reference Guide provides checklists and step-by-step advice to save lawyers time in finding the solution that best fits their client and their personality.

In 2017, LegalBizDev also began offering electronic versions of these tools and templates, which lawyers can access anytime, anywhere using their laptop, tablet, or phone.  These online templates are frequently updated to include new tools that we are constantly adding to the collection.

A number of firms have also begun to develop their own custom tools, from budgeting spreadsheets to checklists for planning an alternative fee arrangement. 

Firms that want to apply the just-in-time training approach to LPM must decide whether to “build or buy.”  They can create their own complete library of firm-specific LPM tools and templates, or start from the foundation we provide with over 150 customizable electronic LPM tools and templates that provide step-by-step advice to solve the most common problems.

5.  Assure continuous improvement by following up relentlessly

To retain current clients and find new ones, a law firm simply needs to be just a little better than its key competitors.  The good news is that until recently that was easy, because other lawyers were not focused on efficiency.  The bad news is that it is getting harder to beat competitors, as more of them focus on LPM.  The bar is going up, and what was good enough to win new business last year may not work this year.

For example, one of the most interesting developments in LPM is the application of “Agile” approaches. In the traditional approach to project management, you start by creating a plan, including deliverables, deadlines and budgets, and then work your way to the end, one sequential step at a time.  In contrast, Agile takes a more flexible approach to managing projects by constantly reviewing priorities and a team’s ability to respond to change rather than sticking to a rigid plan created before the work began.

Agile first emerged in software development, but it can be extremely useful in managing legal matters where deadlines, tasks, and even goals change frequently.  Planning at the outset of every engagement remains important, but the ability to reprioritize tasks as further information becomes available is often critical to the success of legal matters.  If you don’t know whether a case will be in court for years or settle tomorrow, a static plan simply will not work.  Agile speeds up the change process with an iterative approach that seeks client feedback more quickly and uses it to maximize client value.

According to Jeff Sutherland, one of the founders of the movement: 

[Agile is] based on a simple idea: whenever you start a project, see if what you’re doing is heading in the right direction, and if it’s actually what people want. And question whether there are any ways… of doing it better and faster.  (p. 9)

Some of the tips Sutherland offers in his book Scrum: The Art of Doing Twice the Work in Half the Time run counter to the way lawyers have been trained to proceed.  However, these tips can save an enormous amount of time in rapidly changing legal matters.  To give you a sense of how Agile works, here are a few suggestions quoted from Sutherland’s book:

  • Fail fast so you can fix early. Working… in short cycles allows early user feedback and you can immediately eliminate what is obviously wasteful effort.
  • Planning is useful. Blindly following plans is stupid. It’s just so tempting to draw up endless charts… but when detailed plans meet reality, they fall apart. Build into your working method the assumption of change, discovery, and new ideas.
  • Don’t guess… Plan what you’re going to do. Do it. Check whether it did what you wanted. Act on that and change how you’re doing things. Repeat in regular cycles and… achieve continuous improvement.
  • Small teams get work done faster than big teams. Data shows that if you have more than nine people on a team, their velocity slows down… More resources make the team go slower.
  • All the work being done… has to be transparent to everyone. If the team gets too big, the ability of everyone to communicate with everyone else, all the time, gets muddled… Meetings that took minutes now take hours.
  • Give teams the freedom to make decisions on how to take action… The ability to improvise will make all the difference.

We predict that Agile will transform LPM over the next few years.  Whether our prediction is correct or not, there is no doubt that LPM will require continuous improvement as the legal marketplace evolves.

To this day, some law firms are trying to identify a complete LPM solution before they take the first step. A committee is formed, monthly meetings are held and delayed, and months or years are devoted to analysis and debate before anyone actually does anything.

But the simple fact is that no one can possibly know what LPM will look like in ten years, or even in two years, because the legal profession is changing so rapidly.

Keeping up with these changes will require constant attention and management support.  As a senior executive from one AmLaw 200 firm summed it up in our book Client Value and Law Firm Profitability:

I think that [LPM] will require a lot of work, and daily support from the top, not just lip service from the partner team twice a year. (p. 192)

May 17, 2017

The top five ways to increase LPM results (Part 1 of 2)

by Jim Hassett and Tim Batdorf

In the last few years, many legal clients have been demanding greater efficiency and more predictable budgets. Law firms have responded by investing in legal project management (LPM) to increase client satisfaction and profitability.  They have tried a variety of approaches to this evolving specialty, including LPM coaching, training, hiring LPM staff, and purchasing new software.  Some of these initiatives have been quite effective in changing lawyers’ behavior, and some have not.

This two part series provides a high level summary of the five most effective ways to increase LPM results:

1.  Focus on changing behavior and solving problems

In 2011, when the LPM movement was just getting started, the Association of Corporate Counsel and the American Bar Association published an account of a meeting “at which leaders of corporate and law firm litigation departments rolled up their sleeves and tackled the complex issues surrounding present day concepts of value in litigation.” After the meeting, the authors of a follow-up report emphasized that future progress will not be based on improved understanding or increased knowledge. Instead, “The challenge is change/behavior management.” It’s not a question of knowing what to do; it’s a question of actually doing it.

At about the same time, many firms started implementing LPM by launching large-scale education programs. Lawyers love precedent, so when one AmLaw 100 firm announced that it had trained all of its partners in LPM, a number of others jumped in to do the same thing.  These training programs enabled firms to “check the LPM box,” write RFP responses praising their own LPM efforts, and put out press releases. What they did not accomplish, however, was to get many lawyers to change the way they practice law.

As the chair of one AmLaw 200 firm that invested heavily in LPM training put it in our survey Client Value and Law Firm Profitability

Every shareholder and top level associate [in our firm] has had a full day of project management training. I’d like to tell you that they use it, but they don’t.(p. 193)

LPM requires partners to change the very way they practice law.  And as the managing partner of another AmLaw 200 firm in our survey put it:

Project management is not natural to lawyers. We’ve always been trained to get the case done well to win, but now we also have to get the case done efficiently, and that is not part of the natural toolkit for most people. (p. 191)

It is not exactly news that education does not necessarily lead to behavior change. Taking a workshop about how to lead a healthier life by exercising regularly, losing weight, and eating more vegetables does not mean that you will actually do any of these things.

The key to getting started in changing behavior throughout an organization is to help lawyers solve the problems they face, such as living within a fixed fee budget or increasing realization.  And the best way to do that is to first identify lawyers who are motivated to change, and then to coach them one-on-one to create quick wins.

2.  Aim for quick wins to create internal champions

Lawyers are most likely to change their behavior if they are provided with convincing evidence that it is in their own self-interest. If respected colleagues say that LPM helped to make a fixed fee deal more profitable, or to avoid a write-down with a difficult client, they will listen.

As ALM Legal Intelligence noted in a survey entitled Legal Project Management: Much Promise, Many Hurdles (ALM Legal Intelligence, 2012, p. 17), “The quicker there are demonstrable positive benefits, the faster other partners will take notice.” (p. 17)

The value of quick wins in changing behavior has also been shown in many other professions.

A few years ago, John Kotter published a Harvard Business School Review article entitled “Leading Change:  Why Transformation Efforts Fail,” summarizing a ten-year study of more than 100 companies.  Most of their change efforts had failed, and Kotter outlined eight phases that were necessary for success:  generating a sense of urgency; establishing a powerful guiding coalition; developing a vision; communicating the vision clearly and often; removing obstacles; planning for and creating short-term wins; avoiding premature declarations of victory; and embedding changes in the corporate culture.

Kotter, who is now a Professor Emeritus at Harvard Business School, went on to refine these ideas in a number of publications, including the book Leading Change, which TIME magazine listed as one of the "Top 25 Most Influential Business Management Books" of all time.  According to Kotter (p. 123), short-term wins:   

  • “Provide evidence that sacrifices are worth it
  • Reward change agents with a pat on the back
  • Help fine-tune vision and strategies
  • Undermine cynics and self-serving resisters
  • Build momentum”

When LegalBizDev coaches lawyers in LPM, we look for the low hanging fruit that makes it easiest to generate short-term wins such as better budget control, improved client communication, or negotiating changes of scope.

In more than three decades in the training business, LegalBizDev has found that the single most important factor in success is selecting the right people to be trained. This is particularly critical in an area like LPM, where there is resistance and skepticism about changing behavior.

We recommend starting with lawyers who are open to new ideas and who have the most to gain. That could be the key partners who are responsible for new alternative fee arrangements. It could be relationship partners who are worried about protecting business with key clients that are looking for greater efficiency and increased value from their outside counsel. It could be an entire practice group that is considering new checklists, templates, and processes to improve its competitive position. 

Experience has shown that our training pays for itself several times over by enhancing client relationships and profitability. That success creates a new group of champions within the firm who will spread the word that legal project management can help serve clients better.

The exact individuals and groups will vary from firm to firm. But in every case, the best lawyers to begin focusing on LPM are those who are (i) open-minded about change and efficiency, (ii) in a position to benefit when LPM makes a difference, and (iii) influential enough to credibly spread the word of their success.

To be continued in Part 2.....

 

March 29, 2017

Six law firms take legal project management just-in-time training to the next level

Six leading law firms have recently started to take their legal project management (LPM) programs to the next level by purchasing licenses to LegalBizDev’s new library of online LPM tools and templates which lawyers can access on their laptop, tablet, or phone. The six firms are:

  • Winston & Strawn – an international law firm with more than 875 attorneys in 17 offices in key financial centers around the world. Its largest office is in Chicago.
  • Steptoe – an international firm with more than 500 lawyers and other professionals in offices in Beijing, Brussels, Chicago, London, Los Angeles, New York, Palo Alto, Phoenix, and its main office in Washington, DC.
  • Lathrop & Gage – a US firm with over 300 lawyers in 11 offices from Boston to Los Angeles, with its main office in Kansas City, Missouri.
  • Stewart McKelvey – a Canadian law firm with more than 200 lawyers in six offices throughout the Atlantic region of Canada. Its largest office is in Halifax, Nova Scotia.
  • Schwabe, Williamson & Wyatt – a firm with over 150 lawyers in seven cities in the Pacific Northwest. Its main office is in Portland, Oregon.
  • Bilzin Sumberg – a Miami-based firm with more than 100 lawyers, serving clients throughout the United States and around the world.

Based on our experiences using these templates with over 100 law firms, LegalBizDev consultants are working with each license holder to create a strategic plan that fits each firm’s unique culture and resources, including tasks, objectives, and timelines to assure that lawyers use these tools. The results they achieve will be described in this blog in coming months.

The concept of just-in-time training is old news in most professions. For example, when people need to use an unfamiliar feature of Microsoft Word, very few would consider taking a class or looking it up in a book. They simply find the exact information they need in online help, precisely when they need it.

But the adoption of just-in-time training techniques has been slower in the conservative legal profession. Law firms love precedents, and many did not begin to think seriously about legal project management (LPM) until 2010 when Dechert, a firm with over 800 lawyers, announced that they had held traditional training classes with all their partners in this emerging field. This led to a wave of imitation, with numerous firms conducting training classes, then publishing press releases announcing their success.

There was just one problem with all of these traditional classes: few lawyers actually changed their behavior and applied the principles they learned in class. As the chair of one AmLaw 200 firm told me in an interview for my book Client Value and Law Firm Profitability, “Every shareholder and top level associate [at our firm] has had a full day of project management training. I’d like to tell you they use it, but they don’t (p. 180).”

Long-term readers of this blog know that LegalBizDev has, from the very start of the LPM movement, maintained that the best way to change behavior is for motivated attorneys to directly experience immediate LPM benefits and then become internal champions who spread the word. The most efficient way for lawyers to experience those benefits is to work one-on-one with a personal coach. This is one type of just-in-time training, since it uses the tools and templates in our Legal Project Management Quick Reference Guide to focus on each lawyer’s immediate needs. Our web page includes several case studies showing exactly how this approach has worked.

But until recently, the piece of the puzzle that’s been missing has been an extensive library of online LPM tools which lawyers can access anytime, anywhere. It is time consuming and costly to develop and test LPM tools and templates, so to date the only available online tools have been limited to a few templates created by individual firms.

LegalBizDev has now taken the next step in the just-in-time training approach by offering licenses to use electronic versions not just of the tools and templates published in the fourth edition of the Legal Project Management Quick Reference Guide, but also of additional new tools and templates that we will continue to develop and release every three months. These tools and templates make it possible for lawyers to better plan budgets, define scope for new matters, improve client communications, and improve efficiency in other areas by simply looking up what they need when they need it. Our goal is to create the single definitive online resource for the latest information on LPM and to keep adding to it as the field grows.

Instead of paying to reinvent the wheel, these six law firms and others that license these materials in the future will start from a proven foundation of what’s worked at other firms, and what hasn’t, based on six years of development, research, and testing with over 100 law firms.

As soon as just one lawyer who is responsible for a large engagement accesses the right information at the right moment, the return on investment will quickly exceed cost by:

  • Increasing the accuracy of an initial fee estimate and the likelihood of payment in full by using the template “15 questions to ask clients to help define scope”
  • Renegotiating a fixed fee by using the template “Prepare and negotiate for approval of a scope change”
  • Using any of the more than 150 tools and templates in this electronic library to increase client satisfaction and/or firm profitability

For more information on licensing these materials for your firm, contact us (info@legalbizdev.com, 617-217-2578) for details, including the introductory discounts we are offering through June 30, 2017.

January 25, 2017

Engagement letters and statements of work

At the beginning of a new matter, lawyers often specify its scope and fees in an engagement letter. The engagement letter is designed to clarify exactly what work and services are included, and excluded, from a particular matter.

Some states have specific requirements for what must be included in an engagement letter, and many firms have their own requirements as well. For example, in New York State, Part 1215 of the Joint Rules of the Appellate Division requires a letter of engagement in most matters, except for certain exceptions listed in the rule (i.e., an engagement letter is not required if the fee is expected to be $3,000 or less).

From a project management point of view, there is considerable room for improvement in many engagement letters. Consider, for example, this language from the sample letter of engagement published by New York State:

Scope of representation

A claim, dispute or dealings with relating to ______________.

All of our services in this matter will end, unless otherwise agreed upon in a writing signed by us, when there is a final agreement, settlement, decision or judgment by the court. Not included within the scope of our representation are appeals from any judgments or orders of the court. Appeals are subject to separate discussion and negotiation between our firm and you. Also not included in the scope of this agreement are services you may request of us in connection with any other matter, action, or proceeding.

The rest of New York’s two-page sample focuses on fees and client rights. Fee options for the sample include a flat fee, a contingency, or hourly rates.

If a law firm copied the New York State sample exactly and negotiated a fixed fee, they might end up being very sorry when the matter spiraled out of control. They would be better protected if the engagement letter specified timelines and deliverables, such as the maximum number of interviews, pleadings, interrogatories, opinions, and reports, the anticipated scope of travel and research, the use of outside consultants, and so on.

Could a lawyer possibly know in advance how many depositions would be required to settle or plead a particular case? Of course not. But he or she could specify the maximum number of depositions they expected and exactly what would be included within the fixed price.

This failure to provide sufficient detail is quite common. As the executive director of one AmLaw firm recently put it, “The scope of work often contained in our engagement letters is generally no more than one or two lines. Lawyers are missing an opportunity to clearly specify the scope of what is included in each matter and what is not.”

From the client perspective, better specifying the work up front could lead to more predictable costs and a more sophisticated understanding of what they are paying for. From the law firm’s point of view, it could reduce fee disputes, write-downs, and write-offs.

Entire textbooks have been written on how to develop what project managers call a statement of work (SOW), which specifies what a particular project includes and excludes. Lawyers may wish to adapt some of these ideas and write an SOW which could either be included in the engagement letter or be a separate document, depending on the nature of the matter, the lawyer-client relationship, and joint expectations.

 

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

January 18, 2017

How Agile is being used to increase legal marketing innovation at Fasken Martineau

Agile is a highly flexible approach to project management which law firms are just starting to use. I’ve written several posts in this blog about how Agile works and how some lawyers are applying it to improve legal efficiency by focusing on two key questions:

  • How can we deliver value more quickly to our clients?
  • How should we measure our progress?

So when I heard recently that one of our clients was using Agile techniques to increase innovation in their marketing and business development department, I immediately scheduled an interview with Brenda Plowman, the Chief Marketing Officer (CMO) at Fasken Martineau, an international business law and litigation firm with more than 700 lawyers.

The Fasken Martineau marketing and business development department includes people operating from eight offices, six in Canada, one in the UK, and one in South Africa. Plowman has worked in the department for more than 10 years. When she was promoted to the CMO position in July 2015, she noted that:

Over my history here I’d seen many underutilized talents with the potential to help us transform and offer better services to our lawyers. I wanted to reinvent our group. But how could I get people to change when I was coming to work at the same place and with the same people I’ve known for a long time?

We did a survey of the marketing and business development team because we wanted to see what they were thinking. One of the responses was, "The firm doesn’t ask us to innovate enough. It doesn’t expect us to be creative." People didn’t feel that they could bring their ideas forward and they felt that, frankly, they weren’t expected to bring their best game.

Plowman decided to start by adapting two Agile-related concepts: hackathons to creatively generate ideas for improvement and scrum to deliver them and “make sure we were actually accomplishing what we had set out to do.”

Hackathons originated in the software development world and consist of intense meetings in which groups of programmers and others collaborate intensively to solve a particular problem. With the help of a consultant, Plowman adapted the hackathon concept to legal marketing, and in June of 2016 they held their first three-hour hackathon with the team (two sessions with multiple locations involved in each) aimed at coming up with creative ideas to improve marketing efficiency and results on a specific topic. Candidly she admitted that:

At first people were saying, "I don’t know why I’m here." But when a second session was held in October, there was much more engagement and people began to focus on, "How can we go faster and get more done in the limited time we have?”

They created a list of key areas “in which we wanted to improve what we had been providing previously and increase the value we were delivering to lawyers.”

One of the unique aspects of these hackathons is that they were led by the Manager group. Historically, real opportunities for leadership and development were only handled by the Senior Marketing Team (the Director level). That team was committed to developing their Managers and creating opportunity for their growth and development. The Managers were empowered and did a great job working with the teams and bringing the recommendations forward to the Senior Marketing Team (SMT). This aspect is key in Plowman’s vision to leverage the talent on her team.

In addition, the marketing and business development team has started a significant transformation with many changes in place. The Directors have taken on pieces of this transformation and are leading this change with Plowman. There are a lot of moving parts and demands on the team. This led Plowman to adapt another Agile software development technique: scrum. Initially she provided the Directors (the SMT) a copy of the book Scrum: The Art of Doing Twice the Work in Half the Time as part of the “book club” for this group. After the SMT read it and met on it during an in-person meeting, they then expanded to the Managers as a part of their development and a way to encourage them to innovate and drive their project forward. (This book is an excellent resource for law firms and I will write a separate blog soon describing its key concepts.)

This has now evolved into a 30-minute weekly telecon held every Monday by this group to discuss four substantial projects and several other key initiatives that the team is working on (including digital transformation and social media), in which Fasken’s marketing and business development department is concentrating its efforts to become best-in-class:

The group is using some of the techniques from the scrum book to establish and measure specific goals for the next 30, 60, and 90 days. The Monday meetings are organized around three key questions familiar to anyone who has ever been involved with scrum:

  1. What did we accomplish last week?
  2. What is planned for this week?
  3. Are there any obstacles to progress?

One result of the Monday meetings is that, “People collaborate to identify obstacles. It’s also been really helpful for me as the leader of the group because I learn how I can expedite what needs to get done this week.”

This initiative is very much a work-in-progress, but participants in the weekly meetings have already produced results. “Scrum has helped us to go faster, do more, and get obstacles out of our way. It’s increased transparency, which drives efficiency and effectiveness. And it’s created cultural change within our team. The learning is coming faster and faster.”

Plowman and her team would like to expand the program in the coming year to include lawyers. She predicts that the next steps will be even more exciting “when we get to working with our lawyers and going through the process together with them.”