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2 posts from November 2019

November 20, 2019

Case study: Building a successful LPM initiative with online tools (Part 1 of 2)

By Tim Batdorf and Jim Hassett

Saul Ewing Arnstein & Lehr is a full-service firm with about 400 lawyers in Philadelphia, Chicago and 14 other offices.  The firm offers clients the national reach and sophisticated experience of a large firm with the local connections and value of a boutique firm. This post is based on recent discussions with Steve Flaks, the Director of Pricing & Project Management, and Sarah Alford, Manager of Pricing and Project Management. 

Q: Why did Saul Ewing Arnstein & Lehr initially decide to implement LPM?

A: As explained on our web page, “Value has never been more important to sophisticated legal organizations. We use LPM to achieve greater cost certainty and unwavering client service.”

Our initiative has developed gradually over the last several years, based on high level buy-in by senior management.  Even before Saul Ewing merged with Arnstein & Lehr in September 2017, Saul Ewing’s CFO, Paul Levy, began researching LPM vendors.  Paul’s interest was strongly supported by both our managing partner, Barry Levin, and our COO, Jennifer Peterson.  These days, LPM has become one of the key client service initiatives named in our strategic plan, and it has become more and more a part of the firm’s DNA.

Q:  Could you give me the 50,000-foot view of your key LPM initiatives to date?

A:  In 2016, I (Steve) was brought in initially with multiple roles, including billing, collections, and LPM.  It soon became clear that LPM needed more resources.  So, I focused almost exclusively on LPM and pricing.  A couple of years later, we added a second person to the team. 

We have made a lot of strides. We started with a pilot test program in which LegalBizDev coached six of our lawyers.  This produced significant results and generated enthusiasm for LPM.  We then subscribed to the digital online version of your LPM Quick Reference Guide and began using those templates in our own internal coaching. We held a roadshow in which we visited each of our offices to explain the basics, then increased our visibility by sending out LPM tips of the month and more.  Most recently, of course, both Sarah and I have enrolled in your Master Certified LPM Coach™ Program to learn more about how to adapt your proprietary coaching process to the unique needs of Saul Ewing Arnstein & Lehr.

Q:  What benefits have you seen from this?

A:  Quite a few.  We have rolled out various matter management tools used to monitor the progress of matters across a wide spectrum of practice areas and at different levels of granularity (e.g., matter or task-code level).  These tools keep the teams informed on spending, so that if budget issues arise, they can be proactively dealt with and communicated both internally and to the client. 

An example of a specific practice area where we have made significant progress is working with the M&A team on data mining and task code management.  We have created a large catalogue of historical M&A matters that we can refer to when preparing fee estimates for future proposals.  Using task codes, we can look at the number of hours and the fees for transactions with specific characteristics (transaction size, buy vs sell side, etc.) and also relative levels of effort for various phases of transactions.  This has provided M&A attorneys with more information and ultimately more accurate fee estimates.  We have done this type of analysis for other practice areas as well, and we continue to add this capability to more practice areas all the time.

Q:  It sounds like the M&A team has made a significant commitment to LPM.  What other examples of LPM benefits do you have?

A:  We have quite a few.  For example, we have worked closely with a Litigation attorney and his team to prepare and monitor a $2 million litigation budget.  We met on several occasions with all team members during the planning phase to refine the budget and monthly forecasting process.  All timekeepers are familiar with their roles and responsibilities and their share of the budget for all Phases and Tasks.  We have set up budget monitoring alerts that go to all team members as milestones are reached, so everyone is aware of our progress against budget.  We are also providing the client with monthly budget status reports and fee projections.  This exercise has provided the tools to more effectively manage the team and set expectations with a demanding client.

Another example was when a client asked one of our Real Estate lawyers to provide a budget estimate on a land purchase transaction.  The lawyer created a high-level guesstimate and called me (Steve) for a reaction.  While we were on the phone, I sent him a Real Estate Budget Template from our online LPM library, showing all the typical tasks and activities involved in real estate transactions.  We then spent about 30 minutes going through the exercise of identifying the team and assigning rates and hours for each activity.  Going through this exercise was a real eye-opening experience for the attorney, and it allowed him to present his proposal to the client with far more confidence (less stress) and more transparency, because he could support the budget estimate with detailed, documented assumptions.  It showed the client that he had put a lot of thought into the proposal and therefore increased his credibility.  While the attorney had not typically used this approach in the past, I believe he will do so more often in the future, having seen the benefits.

Q:  Let’s back up and briefly discuss each of the initiatives you listed at the start, starting with the pilot test of coaching.

A:  We identified six volunteers from several practice groups for coaching, based on their need for LPM, their open-mindedness to trying new approaches, and their influence within the firm.  We started with a brief kickoff session to introduce everybody to LPM and give them a roadmap of how the program would work.  Each one then held about eight phone calls with a LegalBizDev coach over the next few months to improve client satisfaction with current clients.

For example, one participant was the relationship partner and team leader for a multimillion-dollar matter that included over a dozen lawyers.  Over the course of several months of coaching, she instituted a number of changes, including the development of a comprehensive task checklist based on handling hundreds of eminent domain suits, and a “lessons learned” meeting with the client in which we discussed simple ways to increase efficiency, such as assuring that each condemnation document was titled with property owners’ names.

But the biggest effect of this pilot test was to provide a “proof of concept,” showing that LPM could indeed make an important difference in efficiency and client satisfaction.  This began to build momentum within the firm.  Since these key attorneys had directly experienced immediate benefits, they became credible internal champions who spread the word.

Additional examples will appear in Part 2 of this post.

November 06, 2019

Prepare and Negotiate for Approval of a Scope Change (Part 3 of 3)

By Gary Richards, LegalBizDev

In the first two parts of this blog series, we discussed the best ways to prepare for scope change discussions with a client and how to engage in those discussions.  In the third and final part of this series, we explore how to ensure these discussions are successful.  This blog article is largely based on the third recommendation from Fisher, Ury, and Patton’s book, Getting to Yes: Negotiating Agreement Without Giving In.

Work from their interests, not their positions

Before entering the discussion or meeting with your client contact, try to answer the questions below to get at their true interests that may be driving their position of resistance. Also, prepare to tactfully ask these questions during your discussion if they seem to be resisting your proposed new approach:

Other than the client’s desire to minimize spending, what are their concerns about addressing increased fees and making scope changes during the course of an active matter?  How can I address those concerns?

Consider the difference between “positions” and “interests” in order to understand why focusing on your contact’s interests will usually be more productive than focusing just on their positions. Here is the difference in this situation, if your contact keeps the same position as in the past.

Their position: A “position” is what they want, as in the scenario presented in part 1 of this blog series:

“Don’t worry about it… you may find some savings in the remaining work… we’ll just settle up on all those scope change adjustments when you are done with the complete matter.”

Consider their position as the tip of the iceberg. You need to get beneath the surface to learn what is driving their position/want.

Their interest: An “interest” is the “why” underneath that motivates them to hold their position. Several possible reasons why are given as examples, below, which you could try to address as shown after each reason:

  1. They feel that they have the upper hand if they wait to discuss fees for scope changes after you have already incurred the time to perform the extra work because they have the power to just say “yes” or “no” to any or all of the additional fees you incurred. In the past, you have given in, so that is what they have been taught as the likely outcome.

Could be addressed this way: Describe very clearly what their approach has cost your firm in write-offs, and appeal to their fairness. If the standard of fairness does not appeal to them, you may want to reassess the desirability of keeping this client.

  1. They don’t want to be nickel and dimed with several smallish fee increases.

Could be addressed this way: That is an understandable interest. Suggest agreeing to a threshold dollar amount of scope change fees that must be reached before you come to them with a request for approval. For example, a $5,000 threshold could mean that you would aggregate four instances requiring scope increase fees of $800, $1,200, $2,400, and $800 into one discussion of $5,200. This avoids the nickel and dime perception and allows discussion of all fee changes more closely to when they are identified rather than waiting to the end of the entire matter.

  1. They have committed to this year’s legal spend to their management and must stick with it.

Could be addressed this way: You could ask, “Could I track any scope increases and submit them to you next calendar quarter?”

By knowing the client contact’s interests, you increase the likelihood of coming up with an approach that addresses their interests and satisfies yours as well. One of the best ways to learn your client contact’s actual interests is to ask the following two questions:

If you were to say “yes” and agree to address increased fees for scope changes as they are identified, what would your concerns be beyond your desire to minimize spending? How could I address those concerns?

This blog series was adapted from the fifth edition of the Legal Project Management Quick Reference Guide, an online library of LPM tools and templates which is updated twice a year.