February 06, 2019

Tracking and Controlling Cost (Part 2 of 2)

By Steve Barrett, Jim Hassett, and Tim Batdorf

 

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, 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 may have 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 (Typically, one enters a task name in the pre-designated “Task” user-defined field 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, 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. In the last few years, legal project management software has also started to emerge as a new category. 

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.

Reproduced with permission from the Legal Project Management Quick Reference Guide, Fifth Edition (© LegalBizDev, 2019).

January 23, 2019

Tracking and Controlling Cost (Part 1 of 2)

By Steve Barrett, Jim Hassett, and Tim Batdorf

 

Tracking and controlling legal costs is one of those topics that would require an entire book of its own to do it justice. This short overview is designed to outline a framework for an effective system. The practical details of how budget tracking works in your firm will depend on the approach of your finance department and the tools they use.

In many firms, this is an area that is evolving rapidly as clients demand more timely and sophisticated information about spending. If you are not already familiar with the latest budget tracking procedures in your firm, our single most important piece of advice is to stop reading this article and start talking to your finance or practice development staff about the tools and techniques that are currently available and what is planned for the future.

This article provides a brief overview of three major steps for tracking and controlling costs.  Steps 1 and 2 of this process are discussed in this post.  Step 3 will be discussed in our next blog post on Wednesday, February 6, 2019.

Step 1: Define a baseline budget before the matter begins

A number of the tools and templates in our Legal Project Management Quick Reference Guide are  devoted to this first obvious point. You can’t control costs if you have no idea what the total cost should be at the end of a matter.

For important matters, you will ideally develop what we called a “high detail” budget, in which you have estimated the cost for each phase. For example, in litigation you could have separate budget estimates for case assessment, pre-trial pleadings, discovery, trial preparation and trial, and appeal. (High level phases generally work better than detailed tasks for this because it is so difficult to get lawyers to accurately code their time entries by tasks.) Many firms now require high detail budgets for all matters over a certain dollar threshold, even if clients do not request them. The threshold may be as low as $50,000 or even less, or as high as $250,000 or more, depending on the size of the firm and the amount of financial control that is desired and practical.

Step 2: Obtain accurate and timely information about spending as the matter proceeds

In order to evaluate the financial status of a matter, you need to know how much has been spent to date. In coaching lawyers in LPM over the last several years, we have probably seen the most change in the area of timekeeping practices. Years ago, the standard at most firms was for lawyers to submit timesheets at the end of the month, which occasionally became an exercise in creative writing. And if a partner submitted a time sheet a month or two late no one got too excited, until the day that time was submitted on a matter after the final bill went out and the firm had to write off the difference. There are still firms that live with this system, but the number goes down every year.

At the other extreme, there are now practice groups and entire firms that require lawyers to submit their time electronically at the end of every day. The next morning, the relationship partner can get a real-time view of exactly how much has been spent.

Most firms fall somewhere in the middle and many are still struggling with systems to encourage timesheets to be submitted promptly. We have seen many approaches used by firms to induce compliance with prompt time entry practices, both “carrots” and “sticks.” The “stick” ranges from continually nagging and cajoling, to systems of either financial penalties (e.g. $50 per end-of-week or end-of-month tardy time release) or evaluation penalties (e.g. reduction in the offender’s year-end evaluation for bonuses). The “carrot” systems offer evaluation or dollar awards for compliance.

One of the more creative systems we’ve come across was the CEO of an AmLaw 100 firm who suspended direct deposit on pay day for anyone whose timesheet was late. The individual had to then come to the CEO’s office to pick up a physical paycheck. Another was to create a contest among administrative assistants, with cash rewards for those whose groups, including lawyers, had the best record for meeting timesheet deadlines.

Regardless of the state of timesheet practices at your firm, if you are responsible for keeping a matter within budget, you will need to find a way to get complete and timely information on hours billed to your project. Without it, any subsequent analysis will simply be a matter of “garbage in, garbage out.”

January 09, 2019

LPM success at Baker McKenzie (Part 2 of 2)

By Tim Batdorf and Jim Hassett

Baker McKenzie is one of the largest law firms in the world, with 78 offices in 46 countries.  This interview with Kevin O’Sullivan, Baker McKenzie’s Head of Legal Project Management in London, was conducted by LegalBizDev CEO Tim Batdorf. 

 

LegalBizDev:  Do your project managers get involved in coaching lawyers?

O’Sullivan:  Yes, very much so.  Our process includes both coaching and delivering on time-consuming tasks such as running the resourcing, the management reporting, and the team task management.

LegalBizDev:  How are your project managers organized?

O’Sullivan: They are actually assigned to three different types of roles:  practice-group-facing, client-facing, and technical support.  The technical support team is a new concept for us and a recognition that increasingly many of our interventions involve innovative use of technical solutions.  We have therefore created staff roles to focus on the deployment of technology.  This enables them to become experts in numerous emerging technologies and in designing good process solutions for given challenges.

The reason that some assignments are practice-group-facing is that within a law firm there are obviously different mandates with different requirements, such as trademarking vs large M&A transactions, or contentious filings.  There are different people working within those practice groups who we need to take on a change-management journey.  And therefore, by being present, by being an established member of that team, we’re able to get more hooks in and suggest ways to approach something.  This makes it easier to disrupt some of their current processes and drive a greater understanding of the way in which LPM can improve the efficiency of their approach.

Practice-group-facing project managers work in local offices with partners, senior associates, trainees, etc. – all the way through the team – to look at matters where there is significant complexity, such as multi-jurisdictional issues or complex interdependent processes.

These project managers nurture the team members.  The word I tend to use is they’re ‘harvesting’ work from those practice groups.  Project managers are embedding themselves to remind team members: ‘Don’t just plan to perform this matter in the same way you did on previous matters.  Let’s have a think about whether we can approach it in a different way.’  These project managers build up knowledge, both of our people internally and also, to some extent, of the clients with whom we regularly work.    

The motivations for having a project manager involved vary.  From the client’s perspective it might be that the client has stepped in and said, ‘We would really like to see the efficiency brought by the presence of a project manager on this matter.’  It may also come from the internal team saying, ‘This is a significant risk to us because we are investing heavily in this piece of work.  We’ve got a fixed-fee arrangement and we need to make sure that we’re controlling and managing the matter to give us the best chance of success.’

LegalBizDev:  What about client-facing project managers?

O’Sullivan:  The client-facing project managers are not wedded to a single practice group.  One day they could be drafted into the contentious area of the business, and when that piece of work comes to an end, they would move into a different area.

In cases where there is a large team, high client expectations, or just a complex new matter coming on board, we would often have project managers on the team that help deliver on that matter.  They embed themselves within a working team and lead on the process aspects of that matter.

Client-facing project managers are also brought in if we have developed processes which can increase efficiency in other matters.  Since there is already a proven way of working, we don’t really need to design it as dramatically as the first time we did that kind of work with that client. 

Another reason to add a project manager to a team is the resourcing consideration.  This situation arises if a team on the ground is managing a number of matters and a number of different people on a day-to-day basis.  This particularly applies if there is a very large piece of work, very complex, and perhaps globally reaching.  Then we can put in a member of the team who is able to be fully available to that project.

LegalBizDev:  The idea of having project managers working so directly with clients is an unusual one and quite interesting.  Could you sum up some of the benefits?

O’Sullivan:  The benefits fall into the areas of driving controls, visibility, and better communication.  On the client side, there’s also an element of transparency as well. 

If we look at the way many lawyers track financial information and communicate with clients traditionally, the approach has often been: ‘We have finished the work, here’s the invoice, and by the way, we are overrun.’  But communication needs to be much more alive than that.  Our LPM initiatives have brought regular reporting.  But we’re not just providing a report.  If the number has been driven up beyond where we expected, we’re deeply involved in looking in and analyzing why, and doing something about it.

LegalBizDev:  People often ask us how many project managers they should hire per 100 lawyers.  How many do you have?

O’Sullivan:  In the London office, our current ratio is about 3 project managers per 100 lawyers and equivalent professionals.  More specifically, we have 14 project managers serving 440 lawyers and equivalent professionals.  Remember that in many cases these are billable.  Our goal is always to assure that our total LPM team is not an overhead expense, but actually increases the bottom line.

We don't believe that we have yet achieved the critical mass within London.  Our focus is to ensure that we not only grow the team but also complement the managers with improved technology and supporting staff, including legal project coordinators.  We currently have 12 legal project coordinators in our local service center in Belfast, as well as other functional support teams in local offices and service centers.

LegalBizDev:  Given that Baker McKenzie has the resources of one of the largest law firms in the world, many people who are reading this may wonder what smaller firms should do.  Do you have any advice for them?

O’Sullivan:  My best advice for any size firm is don’t underestimate how much of a change program LPM requires.  This is a profession that has long operated in a certain way.  Lawyers continue to be trained to operate in this way, and therefore will naturally default to it until they’ve been shown the benefits of the LPM approach. Those seeking quick wins will likely find them in improving collaborative working, task delegation, visible matter reporting, and communication.

December 26, 2018

LPM success at Baker McKenzie (Part 1 of 2)

By Tim Batdorf and Jim Hassett

 

Baker McKenzie is one of the largest law firms in the world, with 78 offices in 46 countries.  This interview with Kevin O’Sullivan, Baker McKenzie’s Head of Legal Project Management in London, was conducted by LegalBizDev CEO Tim Batdorf. 

LegalBizDev:  Could you briefly summarize the approach Baker McKenzie has taken to legal project management (LPM)?

O’Sullivan:  Our approach is evolving all the time.  We have global coverage, with members of our LPM team who are able to cover all of our offices.  Much of our work has evolved from our experiences in the London office, where I work and where we have hired a team of project managers to work directly with our lawyers in client-facing roles. Our success has been underpinned by our ability to be flexible in our deployment.  Tasks range from process improvement, to coaching our legal colleagues, providing “light touch” support to matters to a fully integrated role leading the process within a core matter team.

LegalBizDev:  What results have you seen to date?

O’Sullivan:  We have been able to measure dramatic impacts of LPM on improving the client experience, on efficiency, and on profitability.  The precise figures are proprietary, but I can describe the process and results in a general way.

LegalBizDev:  Great.  Let’s start with an example.

O’Sullivan:   One example of LPM success that has now become almost business-as-usual has been that project managers are now involved from day one in many M&A transactions.  The project manager focuses first on the due diligence aspects of each matter, ensuring that firstly the data is being controlled, whether we’re on the buy or the sell side.  Then we track progress on the matter to help ensure that work is being delegated down to the right level.  The project manager also monitors issues raised in client reviews.  Increasingly, we share through collaborative working platforms the emerging risks and issues identified through the due diligence process. These are highlighted through dashboards giving the client visibility in real time rather than at the end of the due diligence when a lot more documents have been reviewed and a lot more money has been spent.

In essence, the project managers control the process to enable useful information flow through, not just for the internal team, but often for client teams. 

LegalBizDev:  Is LPM used in a variety of practice groups?

O’Sullivan:  Yes, it is.  For example, in litigation a project manager’s impact could be as dramatic as saying ‘OK, we’re going to do a large document review.  Let’s consider using an AI (artificial intelligence) tool to do the first pass on this.  Then let’s engage the team in looking at results of the first pass from the AI tool.’  We’ve used this sort of AI preview on some very large projects and that’s quite a significant disruption to what would be a typical process. 

Many of the changes introduced by project managers are less dramatic, such as when information is being gathered for weekly progress reports to a client.  Traditionally, the approach might be that the lead person has a quick meeting or a call with each knowledgeable person within the team covering different regions.  Then they would pull something together.  Without this proactive approach, this could turn into a significant time-consuming task to get to the point that they were able to report back to the client. 

If a project manager is involved, they may disrupt that process and provide an alternative way of working.  The project manager could work with the client to agree on a template for the information that needs to be reported regularly, then put a process in place to gather and report the key information in a client-facing report.  The project manager would do some of the chasing which is required to make sure that people are aware of deadlines.  The task of actually updating the information, to indicate where they are against their designated task, would fall to the legal teams including lawyers and/or paralegals. 

So, the project manager plays a key role in creating and managing a centralized list of tasks, progress achieved each week, and any issues that may need to be resolved.  At that point you’ve got seamless sharing of task lists, progress, and risks.

LegalBizDev:  It sounds like one key LPM benefit is increased transparency.

O’Sullivan:  Exactly. The result is that at different stages of the matter, clients don’t have the feeling that lawyers are working on something and that they won’t know much until they’re finished.  There’s much more of a collaborative sense, that we’re one team, working on behalf of one another.

LegalBizDev:  How much influence do project managers have over budgets and costs?

O’Sullivan:  Of course, budgeting is key.  Typically, the project manager is involved from the start in creating a budget so there’s a mutual understanding of how much the matter is expected to cost, along with a resourcing plan to meet that budget.  So, once you’ve created that type of plan, you got something to track against.  You’ve got an aspirational plan and you’ve got the actual experience.  If you run one up against the other, you can see where they’re not aligned.  If you do that on a regular basis, rather than on a reactive basis, then you start to see trends.  At times, you might say, ‘OK, we need to address this in a different way.’  That may mean a conversation with the client to discuss the methodology or on issues with different pieces of work.  This may lead to some decisions to go to a different approach and avoid any surprises to the client.

LegalBizDev:  One obvious concern some firms have about hiring project managers is the potential expense.  Are these individuals billable or are they an overhead cost? 

O’Sullivan:  It depends.  Given that our legal project managers are performing key client-facing roles and providing added value to our clients, they are often fee earners whose time is charged to clients, although at a lower hourly rate than lawyers. We are positioning them to be the leaders on processes, controls, and communication, and many clients are willing to pay because they recognize them as crucial participants who can control the total cost of the matter.

That said, of course our teams are sensitive to client concerns about cost.  In cases where clients object, or we determine that management tasks do not have visible value to our clients (for example in standard financial reporting) time is recorded as non-billable, though the benefit to the matter is usually still significant.

LegalBizDev:  Do project managers talk directly to the client?

O’Sullivan:  Yes, we increasingly see clients who want a direct communication link so there can be instant communication on the financials or any process risks.  And the reason that works is because often on the client side there’s also a project manager so there’s a natural peer-to-peer conversation. In other cases, that isn’t the best arrangement for the client.  Then the project managers would provide the information to the partner or senior associate who leads the team. 

December 12, 2018

LPM success at Lathrop Gage (Part 2 of 2)

By Tim Batdorf and Jim Hassett

In November 2017, we published a case study entitled “LPM Initiatives at Lathrop Gage” describing the steps this 260 lawyer firm had taken to maximize LPM’s impact, and the results they’d achieved through our Master Certified LPM Coach™ program, and the use of LegalBizDev’s proprietary tools and templates.  This post provides an update, based on an interview LegalBizDev CEO Tim Batdorf recently conducted with David Clark, Lathrop Gage’s LPM partner. 

LegalBizDev:  Several of the examples discussed earlier sounded like areas where our tools and templates on developing checklists would be especially helpful.

Clark:  They were.  Having a comprehensive checklist makes the process more efficient.   A checklist ensures that all steps are being taken, and that the appropriate people are doing the appropriate tasks.  A checklist also improves the process because as you think through the steps, you must determine who should take each step, what documents are associated with each step, and who needs to do it.  Without the systematic approach of LPM, many checklists are developed “catch-as-catch-can.”  One result of not having a checklist (or having a poor one) is inconsistency in who performs certain tasks.  Attorneys perform tasks at times, while paralegals do the same tasks at other times.  In addition, the person performing the task would have to try to find forms.  The net result often was a wasteful and inefficient effort.

In fact, developing more effective checklists was the key focus of my LPM coaching for a number of lawyers.

A good example is the LPM coaching experience of Courtney Conrad, the head of our Wealth Strategies group.  In our coaching program, Courtney developed a “checklist on steroids” to be used in both basic estate planning and more complex situations.  Then she made that checklist accessible to the rest of the Wealth Strategies group.  It has made a number of lawyers in her group more efficient – since they don’t have to reinvent the wheel – and also assures that all the things that need to be done in a particular situation actually get done.

LegalBizDev:  Do you think that in some cases lawyers would have created checklists and other systems like this even if they had not gone through the LPM coaching process?

Clark:  Yes, in some cases.  In estate planning, checklists are pretty standard.  And when lawyers plan fixed price retainers, of course they look at some past bills and talk to people on their team.  The difference with LPM coaching is that lawyers attack the problem more systematically and more effectively, thus  increasing their impact.

LegalBizDev:  How often do you use the LPM tools and templates Lathrop purchased when they designed this program? 

Clark:  All the time.  It’s been very useful to have the latest tools in a form that allows me to send each lawyer exactly the information they need, just when they need it, whether it’s a list of 15 questions to help lawyers define scope, a checklist for personal time management, or advice about how to deal with difficult clients and situations.  Having the details available in a short written form saves significant time for me, and makes it easy for lawyers to refer back to the details when they need them.

A lot of lawyers just get stuck because they don't know what to do or what the next step is.  The online library supports the coaching in that it gives some concrete examples of how some of these principles and techniques and tools are being used by lawyers at other firms.  The result is not necessarily “I’m going to do it exactly like that.”  Instead, they say: “OK, I see how they set this up.  I could do something similar with the checklist that I have in mind.”  The tools give them ideas and samples that they can work off.

These online tools also help push them to develop a spreadsheet or a checklist that they've been thinking about – but never got around to completing – and to develop a better version more quickly than what they could have done without examples.

LegalBizDev:  You said the online tools “help push” the lawyers.  Does coaching also provide a push?

Clark:  Absolutely. I often hear that “I've always wanted to do this, but coaching gave me the push to actually do it.”  For many lawyers, LPM is just “white noise” until they engage in LPM coaching and experience its benefits firsthand.  After LPM coaching, lawyers begin to put all the dots together.

LegalBizDev:  When we wrote the original case study last year, this type of one to one coaching was one of the most important elements of your firm’s LPM initiative.  Is that still the case?

Clark:  Yes, more than ever.  In my role as LPM Partner, I spend much of my time applying the techniques I learned when I became a Master Certified LPM Coach™.  The certification program highlighted for me what some of the more important principles in each of the eight key issues of LPM are.

More importantly, the program recognizes that lawyers are busy, so you need to tailor coaching to each lawyer, and focus on what their specific issues and challenges are. With the next step then being to direct them to the online library of tools that best address the issues each lawyer cares about.

It’s one thing to understand LPM at a theoretical level, and another to know how to apply it or coach it as a practical matter.  The coaching certification program made me much more cognizant of what actually works than I would have been if you had just handed me the book and said: “Knock yourself out.”

LegalBizDev: How many lawyers have you coached since you were certified as an LPM coach?

Clark:  In the past year, I have completed one to one LPM coaching with 17 lawyers, and am now coaching 11 more, for a total of 28 lawyers so far.   The feedback has been extremely positive.  More and more of our lawyers are volunteering and seeking me out for coaching.  For example, when numbers come out, lawyers now approach me and ask for my help in reducing write-offs.

LegalBizDev: When you include the lawyers that we previously coached, approximately 60 of your lawyers have completed in-depth, one to one LPM coaching.  How has LPM coaching changed your firm’s culture?

Clark:  Many of the lawyers who have been coached have become internal champions of LPM.   They have informed other lawyers about certain tools and templates and have also encouraged them to participate in the coaching program.  Those lawyers who have completed the coaching program are also more likely to consider whether there might be an LPM solution to a problem or challenge they are facing.

LegalBizDev:  Can you sum up the benefits the firm has experienced so far?

Clark: Very simply, LPM is enabling us to increase client satisfaction.  We are communicating more effectively with clients, and providing more cost-effective service.  It is also increasing the firm’s profitability by ensuring that lawyers better plan and budget work, especially in cases where there are fixed fee arrangements or hourly arrangements with a firm cap.

LegalBizDev: Is the firm committed to continuing to focus on LPM?

Clark:  Yes, now more than ever.  I am currently working with a group of lawyers and other firm personnel who are focusing on a number of initiatives to improve service and value to clients through innovative approaches.  One key reason that LPM coaching has worked is that it has been consistently supported by the firm’s management.  And I expect this support will continue to increase.  When Cameron Garrison took over as managing partner this year, the American Lawyer post announcing his appointment was headlined:  “Lathrop Gage's New Leader Stresses Innovation, 'Re-Imagining Everything.'”

LegalBizDev:  Do you have any advice for other firms that would like to implement LPM?

Clark:  Yes.  If you fail to change lawyers’ behavior it will have no impact on client satisfaction or firm profitability. So I would recommend that other firms do what we’ve done.  Start small, perhaps with a pilot group of lawyers for coaching.  After that succeeds, and internal support increases for the concept, then look for the most cost-effective ways to get more lawyers onboard. 

November 28, 2018

LPM success at Lathrop Gage (Part 1 of 2)

By Tim Batdorf and Jim Hassett

In November 2017, we published a case study entitled “LPM Initiatives at Lathrop Gage” describing the steps this 260 lawyer firm had taken to maximize LPM’s impact, and the results they’d achieved through our Master Certified LPM Coach™ program, and the use of LegalBizDev’s proprietary tools and templates.  This post provides an update, based on an interview LegalBizDev CEO Tim Batdorf recently conducted with David Clark, Lathrop Gage’s LPM partner. 

 

LegalBizDev:  How would you describe LPM’s progress at Lathrop Gage in the year since we published our case study?

Clark:  LPM is continuing to change our firm’s culture and the way our lawyers practice law.  More and more lawyers are applying its principles every day, and clients are reaping the benefits. 

It’s always hard to know exactly how things like LPM progress compares across firms.   But when I listened to LPM leaders at the P3 conference in Chicago last spring, I got the sense that Lathrop Gage is far ahead of the curve.

LegalBizDev:  Why do you think you are ahead of many other firms?

Clark:  Because of our unrelenting focus on changing lawyers’ behavior through the one to one coaching I’ve been doing.

LegalBizDev:  Can you give me a few examples?

Clark:  Of course.  One of the issues that often comes up in my LPM coaching is how to improve delegation to the most cost-effective time keepers; getting paralegals, legal assistants, library folks, and so on involved in some of the tasks appropriate for them to handle in order to lower the costs to clients.  In our one to one coaching, several lawyers have increased not only the amount of delegation they do, but also its effectiveness.

Process improvement is another interesting example.  Some firms have developed complex and time consuming approaches to process improvement.  Using the much simpler approach summarized in several recent posts in your blog, several lawyers I coached have very quickly found areas for improvement.  For example, one lawyer I coached simplified a tracking spreadsheet so that it quickly communicates the information necessary to other team members without being too complicated.

Budget planning and tracking is at the heart of LPM, and several lawyers I’ve coached have also begun to implement task codes to get better financial information.  For example, our new business litigation practice group leader recently completed a one to one coaching program with me and is now in the process of improving budgeting by requiring his group to use mandatory task codes.

LegalBizDev:  Have any practice groups implemented task codes yet as a result of your coaching?  If so, how did it impact the way they practice law?

Clark:  Yes, several groups have begun to implement task codes.  Of course, to use them effectively you need to have a budget and you need to track that budget against actual expenses.  A number of partners are now using that information to determine ‘OK to make this matter profitable for us and cost effective for the client we need to delegate some work down and we need to leverage more of it.’ Or ‘This is taking longer than we budgeted for this phase, so we need to get more efficient.’

Task codes are not a panacea. Frankly, entering them can be a pain in the neck.  But they allow us to harness the financial data we have, and a lot of other things flow from that.

LegalBizDev:  With other clients, we’ve found that task codes produce the fastest benefits with fixed price arrangements.  Has that been your experience? 

Clark:  Yes, the most immediate benefits to the firm are usually seen in fixed price deals.  For example, one of my partners, Chris Feldmeir, works with our franchisor clients on monthly retainers.  When I coached Chris, one of his clients was paying the firm on a monthly retainer basis.  Working together, we set up a set of task codes to analyze how much time and effort was being spent on discrete tasks included within the retainer arrangement.  The result is that Chris is now better able to fully meet the client’s needs, while also ensuring that it remains profitable for the firm.

LegalBizDev:  Can you give me another example of the benefits of LPM coaching?

Clark:  Of course.  The case study published last year discussed my initial work with partner Travis McCallon for an automobile manufacturer client that wanted to come up with an enforcement system to protect their trademarks from infringers.  Things like tire wheels and hood ornaments are distinctive, and lots of mom and pop type operations try to copy them, create knock offs, and sell them out of garages and small shops.

Travis was engaged to focus on these small infringers with the goal of stopping the infringing conduct.  Most of these infringers had few assets you could collect upon even if you could prove infringement.  However, these trademark enforcement efforts are still important because if manufacturers know of infringements, but take no action to stop them, they could be accused of waiving their trademark rights. 

There were a large number of potential infringements which Travis had to identify and track.  Then for each, he had to work with the client to determine what kind of action, if any, was required.  The project included efficiently sending out cease and desist letters and other communications, monitoring these enforcement efforts, and keeping the client fully informed.  

Since it didn’t make economic sense to take formal legal action against most of these infringers, it was very important that this effort be sustainable and cost effective.  I helped Travis apply LPM principles to think through the options and refine some of the details, and he did the rest.

 

 

November 14, 2018

A one minute self-assessment:  Could legal project management help you?  

By Jim Hassett and Tim Batdorf

Question 1:  Could you increase client satisfaction?

Question 2:  Could you increase realization or profitability?

If you answer YES to either question, legal project management (LPM) could definitely help you. 

If your firm has begun an LPM initiative, first determine whether there is an LPM team at your firm that can  meet your needs.  If you’d like to learn more about our one-to-one LPM coaching, see https://tinyurl.com/LPM-Coach18J.

If you answer NO to both questions, you may not need to devote time to LPM.  But are you sure you’re right?

Regarding client satisfaction (Question 1):  Research has consistently shown that many lawyers overrate client satisfaction.  For example, in a survey published by Inside Counsel  magazine in July 2008, 43% of lawyers thought clients would give them an “A” for their work, but only 17% of their clients agreed.

Regarding realization and profitability (Question 2):  Have you checked with your financial department to determine how your personal realization or profitability compares to firm goals, and to other lawyers in your group?  If not, it might be worthwhile to see how you compare before answering this question.

October 31, 2018

Four approaches to business process improvement (part 2 of 2)

By Jim Hassett and Tom Kane, LegalBizDev

Approach #3: Five steps to improve any business process

Step 1: Make a very quick list of the most critical processes that you want to consider.

If you don’t know where to begin, use the standard task codes described on the UTBMS website. For example, a litigator focused on the discovery phase of cases could begin with these six tasks:

  • Written discovery
  • Document production
  • Depositions
  • Expert discovery
  • Discovery motions
  • Other discovery

 Step 2: Pick one process to focus on first.

It is important to begin with the process that is most likely to allow you to meet your goals, which of course means that you have to be very clear about what your goals are. When you have several goals in mind, you could start by constructing a “process selection matrix” like the one below to make your choice.

Process_Table

In this example, there are three different goals, all are rated on a scale from 1 (low) to 5 (high), and the lawyer considers them equally important in selecting a process. Therefore, the last column, the total rating, can be used to determine that your process improvement should begin with the deposition process because it has the highest total rating.

Step 3: Define exactly what is included in the process. Where does it begin and end? Then break it down into five to ten high level parts.

Step 4: Decide which step to redesign first.

Again, the step you choose depends on your goals. The following questions from Improving Business Processes may help you to make your choice:

  • At which points does this process break down or experience delays?
  • At which points do people typically experience frustration with the process?
  • Which parts of the process seem to consume an inordinate amount of time?
  • Which parts of the process lead to low-quality outcomes?
  • Which parts of the process incur unacceptable costs?

Step 5: Think through the details of the step you will redesign, and look for ways to increase efficiency, e.g. by simplifying the process, creating a checklist, and/or focusing more clearly on the factors that the client values most highly. Define action items and implement them.

 

Approach #4: 10 steps to improve critical business processes

These 10 steps are explained in detail in Susan Page’s book, The Power of Business Process Improvement. Here, they have been adapted and simplified for legal matters.

Step 1: Develop the process inventory. List all the big picture processes within a particular legal area, establish criteria for prioritizing them, and pick the one you want to start with. (The discovery tasks in the table above provide a good example.)

Step 2: Establish the foundation. Write a scope definition document that defines the problem you need to solve and provides a blueprint for the start and the end of your process improvement.

Step 3: Draw the process map. Identify each activity with a specific action word (e.g. create, review, develop, approve, update, or communicate), and then diagram the steps in a form that can be communicated to everyone involved. Be sure to include handoffs to other lawyers, staff, clients, and others.

Step 4: Estimate time and cost. Specify what is involved in each stage or activity in the process, how long it usually takes, and what it costs.

Step 5: Verify the process map. Ask other stakeholders to review the process map for accuracy. This provides a baseline to begin improvement.

Step 6: Apply improvement techniques. This is where the rubber meets the road. Eliminate bureaucracy, evaluate value added activities, eliminate duplication and redundancy, simplify processes, reports, and forms, reduce cycle time, and more.

Step 7: Create internal controls, tools, and metrics. Create controls to avoid errors, tools to support the new business process, and metrics to quantify improvements.

Step 8: Test and rework. Pilot test the new process, identify any issues, and rework them before introducing the new, improved process on a wide scale.

Step 9: Implement the change. Just as businesses develop marketing plans before they introduce a new product, they must plan how to implement business process changes, including “who has to know about the change, what they need to know, and how to communicate the right information to the right people.”

Step 10: Drive continuous improvement. After the change succeeds, you will still need to invest in maintenance. Evaluate, test, assess, and execute to sustain any required change.

 

Implementing your improved business process

All four approaches have value in different situations, and all take advantage of the 80/20 rule to maximize the benefits you will receive while minimizing the time it will take.

If you want to use these approaches in your own personal practice, you should be able to identify improvements quickly. But if you want to get other lawyers in your group to do the same thing, that’s a lot harder.

Whether you use approach 1, 2, 3, or 4, or you go out and buy Page’s book for more detail, or you hire an outside consultant, figuring out how to improve legal business processes is not the hard part.

The hard part is getting lawyers to do it. For ways to combat typical objections, see “Overcoming Resistance to Legal Project Management: A List of Suggestions for Law Firm Project Management Champions.”

Reproduced with permission from the Legal Project Management Quick Reference Guide, Fourth Edition (© LegalBizDev, 2017).

October 17, 2018

Four approaches to business process improvement (Part 1 of 2)

By Jim Hassett and Tom Kane

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.

There is no shortage of theories, tactics, or opinions about the best way to increase efficiency, and hundreds of books and articles have been written on business process improvement and related techniques. Many of these systems have become so complicated and demanding that you can earn an MBA in the field, supporting what Susan Page called “the myth that business process improvement must be time consuming and complex” in her book The Power of Business Process Improvement.

This two-part blog series describes four approaches to business process improvement that we have developed with lawyers to increase legal efficiency quickly, listed in order of ease of use. We recommend that most lawyers start with Approach #1, which is limited to two simple questions. For critical, time consuming, and repetitive processes, we outline three increasingly sophisticated options which require more time, but can be more effective in simplifying the way you handle legal matters.

Approach #1: Two questions to improve a business process

Ask yourself:

  1. Of all the things you do for clients, what legal work provides the biggest opportunity to deliver greater value quickly or to increase efficiency?
  2. What could you do to improve this process?

Then do it.

Yes, this is so simple that it sounds trivial. But if in fact you stop and think about where inefficiencies lie, and act on what you already know, chances are you can increase efficiency very quickly.

No, it isn’t brain surgery, but for some lawyers, Approach #1 is a great way to get started. If you prefer an approach that is a bit more detailed, consider this longer list of questions.

Approach #2: 10 questions to improve a business process

  1. What steps and activities are typically included in this process?
  2. Which steps and activities does the client value most?
  3. Which steps and activities do not add value, and could be eliminated?
  4. Could you standardize and/or streamline the process?
  5. Could you reduce or eliminate repetition?
  6. Could you reduce or eliminate bottlenecks?
  7. Could you improve communication within the team and/or with clients?
  8. Could you reduce cost by delegating some tasks to junior staff who bill at lower rates?
  9. Could you reduce cost by “delegating up” some tasks to senior staff who can complete a task quickly at a low total cost?
  10. Could you reduce cost through legal process outsourcing of selected tasks to another law firm or a legal support services company in the US or in another country?

Part 2 of this series will describe two additional approaches.

October 03, 2018

Personal time management

By Jim Hassett

The simplest way to increase productivity is to manage your time better. While many time management techniques sound like common sense, that does not mean they are easy to implement.

In his widely used textbook on Project Management, Harold Kerzner suggests that you start by focusing on four key questions:

  • “What am I doing that I don’t have to do at all?
  • What am I doing that can be done better by someone else?
  • What am I doing that could be done as well by someone else?
  • Am I establishing the right priorities for my activities?”

If you need work in this area, identify troublesome areas:

  • How often are you interrupted?
  • How do you manage disruptions?
  • Can you section off blocks of solid work time?
  • Do you make “to do” lists and prioritize them?
  • Do you have a flexible work schedule?
  • Do you complete your work during regular work hours?
  • Do you micromanage?
  • Do you take on all tasks yourself?
  • Can you say “no?”

Plan how to avoid situations that can waste your time, including:

  • Poorly completed work that must be re-done
  • Phone calls, email, mail, casual office talk
  • Lack of delegation or improper delegation
  • Information that is not easy to find or use
  • Too many review cycles or layers of approval
  • Multiple meetings that aren’t useful
  • Postponing your work
  • Unclear goals or objectives
  • Excessive paperwork
  • Too little time and too much work
  • Lack of authority to make decisions or too many levels of decision making
  • Only dealing with crises
  • Perfectionism
  • Poor organization

Identify the time management techniques that will work best for you, including:

  • Manage your stress
  • Prioritize your tasks
  • Organize
  • Follow your schedule
  • Avoid useless memos, travel, conversations, emails
  • Don’t procrastinate
  • Do the hard parts first
  • Start as soon as possible
  • Carve out blocks of time for important things
  • Delegate wisely
  • Give attention only to items that need it
  • Don’t let others give up and pass off tasks on to you. Help them to figure out how to accomplish their own tasks, if necessary.

Effective time management begins with taking a single step. Identify one or two action items from the list above, and start today.

 

Some of this material has been adapted from the Fourth Edition of our Legal Project Management Quick Reference Guide.