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2 posts from April 2020

April 22, 2020

Case Study: The benefits of practice innovation (Part 1 of 2)

By Tim Batdorf and Jim Hassett

This post is based on a recent interview with Paul Saunders, Practice Innovation Partner at Stewart McKelvey, which is Atlantic Canada’s largest regional law firm with over 200 attorneys in six offices throughout Nova Scotia, New Brunswick, Prince Edward Island and Newfoundland and Labrador.  His role includes planning, developing and implementing innovative technologies and systems that increase efficiency, profitability and client value.

Q: Let’s start with the big picture of your role and your team.

A:  I spent my first seven years at Stewart McKelvey practicing corporate law.  In 2015, I accepted the newly formed position of Practice Innovation Partner.  I report directly to our CEO and oversee our Legal Project Management and Pricing functions as well as our Practice Re-engineering Program.  I also support our Compensation and Profitability Alignment Strategy. 

Five full-time employees report to me:  two practice innovation lawyers, two IT developers, and a document automation specialist.  One of the practice innovation lawyers just joined our team a few months ago to focus on our RFP process, and we’ve already seen an increase in the number of RFPs that we're winning.   I also oversee dozens of process improvement and LPM projects involving approximately 60 of our practicing lawyers.

Q:  Have your initiatives had any measurable successes beyond RFPs?

A:  Yes, quite a few.  Easiest to see is our increase in realization.  When I look at a graph of realization at our firm over the last 8 years it looks like a “V.”  At a macro level, the firm-wide increases in realization began right around the time we started pushing LPM and increasing awareness of the impact that realization has on firm profitability.  I can also point to examples of specific client service teams that have seen improvements in their numbers as a result of our working together.

Q:  What other kinds of benefits have you seen from your approach?

A:  Overall, we’ve become far more creative in customizing our pricing to the needs of each client. We've recently developed a new profitability calculator tool that works hand-in-hand with our budget template. So, for example, we might estimate the amount of time Partner A is required to spend under simple, moderate, and complex scenarios.  But then we go on to ask, “What's our margin?  How much can we negotiate this fee given the history of volatility and variability with similar work? How can we use effective delegation, LPM and process improvement to increase profit?”  This enables us to realistically offer clients the fixed fees and cost certainty that many are looking for. And this, in turn, has led to more success in business development.

We've also developed automated documents and streamlined processes to reduce our costs.  In some cases, we proactively approach a client and say, “We’ve developed some efficiencies in this particular work area.  Are you interested in having us perform this work for a fixed fee of X?” Of course, in order to make sure that we make money on those fixed fees, we need to include the project management side of things. We track expenses and watch for situations where we are spending more than we bid.  When that happens, we diagnose what's happening and why, and then streamline our process.

While we have been offering ad hoc support to lawyers in Project Management for a number of years, we're now beginning to create more structure around LPM support in conjunction with some changes to our partner compensation system that have just taken effect this year. 

As a firm, we felt a need to put our money where our mouth is and say, “If you're embracing LPM, then you're effectively managing client relationships.  So, you will get paid for that, and here's how.” I think that’s going to be significant for many firm partners, and that’s why I think they’ll be reaching out to our LPM team for support.

Q:  Can you give me some current examples of a group you worked with recently and the kind of benefits they’ve seen as a result?

A:  Of course.  We do a lot of work with insurance clients who are particularly sensitive about fees.  They often require fixed fees and matter budgets, and in the past, this has sometimes led to high write-downs.  This is the area where we’ve gotten the most LPM traction to date.

Team leader Colin Piercey was an early adopter of our approach, and we put in place a standard budget with a prebuilt scope of work.  Colin and I worked together to create budget forms that his team could use, for example, for a relatively straightforward motor vehicle accident, a moderately complex one, and a more complex one.  It was a real success story in the sense that Colin was able to help billing lawyers in other offices change their behavior.

This is a great example, too, of where our firm has seen improvements in realization as a result of LPM.   I think that’s directly attributable to the fact that we're better at scoping.  We're not writing our fees off at the time of billing because we’re clear about the scope of the work, and whenever change happens, as it often does, we're reaching out to the client proactively.

Q:  It sounds like the group was developing budgets before, but the key to success was carefully setting the scope, tracking time, flagging changes, and then proactively talking to clients.  

A:  That’s right, LPM is not all that complicated.  It’s just a matter of paying more attention to details like scoping, which lawyers have traditionally ignored as they jumped right into the details of legal work. 

It’s also an example of how much I've bought into LegalBizDev’s approach.  As you know, I recently completed your Master Certified LPM Coach program, and I agree that it’s important for lawyers to use LPM to solve real-world problems.  Start small, get some wins, and always focus on addressing specific issues with specific clients.  Once key lawyers work with some simple new LPM tools and see the benefits, they become LPM champions who share their stories and lay the foundation for firm-wide benefits.  Don't expect that a day-long CLE-type LPM seminar will change behavior.  Don’t expect that lawyers will automatically become more efficient because they attended a seminar.  Work with them directly.  That’s the key.

April 08, 2020

What exactly is LPM? Here’s our definition

Though it is relatively new to law firms, project management has long been used by businesses to protect profits through predictability and efficiency. Their projects—from the design and production of a new line of jet engines to the acquisition and integration of a billion-dollar company—can reach nearly unimaginable levels of complexity, variability, and risk.

Professions from engineering to investment banking have developed a rich and deep body of knowledge about how to manage projects on time and within budget. Legal project management adapts these proven techniques to the unique challenges of managing unpredictable legal matters and disputes.

By our definition, legal project management (LPM) increases client satisfaction and firm profitability by applying proven techniques to improve the management of legal matters. Thus, we see LPM as an umbrella term that embraces a very wide range of management techniques, including pricing, communication, process improvement, and much more.

Others disagree. For example, the field of knowledge management (KM) identifies useful intellectual property created during past matters and then leverages that knowledge inside the firm through increased access and sharing. In some firms, LPM and KM are entirely separate departments. In others, LPM staff are part of the KM department, or KM staff are part of the LPM department.

However, if a management technique can help lawyers accomplish their goals, we say it is part of LPM. We believe that hair splitting over what is and is not LPM can become just another excuse to avoid action. Instead, law firms need to move as quickly as possible to the central problem addressed by LPM: What must we do today to meet client needs while remaining profitable?

We also include personal time management in our definition of LPM.  This field is not mentioned in many project management courses and texts, nor is it listed in the index of the Project Management Institute’s Guide to the Project Management Body of Knowledge, the bible of the field which is used to certify project managers in other industries. But for some lawyers, personal time management is a vitally important skill which can increase value and profitability. That’s why we include personal time management in our definition of legal project management.

Like Barbara Boake and Rick Kathuria, the authors of Project Management for Lawyers, we argue that “project management is a tool box—choose only what you need to most effectively manage [each] project.” (p. 14).  The key to success, we believe, is to find the “low-hanging fruit,” the management tactics that are most likely to help each individual increase value and profitability.

By our definition, any lawyer who has ever planned a budget or managed a team has served as a legal project manager. But what was “good project management” for lawyers a few years ago is no longer good enough. Clients are now choosing law firms based on their ability to apply a more systematic and disciplined approach that delivers more value more quickly.