6 posts categorized "Legal Business Trends"

May 06, 2020

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

By Tim Batdorf and Jim Hassett

This post completes our interview with Paul SaundersStewart McKelvey's Practice Innovation Partner.

Q: In Part 1 of our discussion, we talked about your position at the firm and some typical LPM success stories. You probably know that in the most recent (2019) Law Firms in Transition survey (p. 22), Altman Weil found that the single most effective tactic for improving firm performance was “rewarding efficiency and profitability in compensation.”  So, in this next part of our discussion, I’d really like to focus on your firm’s new compensation system.  Changing compensation can be extraordinarily controversial, so I’d like to start by hearing about how you laid the groundwork.

A:  We actually started several years ago by creating a new committee that included members of our compensation committee, our partnership board, and other influential partners.  We made sure that we got a really good cross-section of different levels of seniority in our partnership.

That group then hired a compensation consultant who analyzed our financial data and interviewed over half of our partnership. They then brought all that information back to the committee to inform our strategy. 

At our partner retreat three years ago, we shared the results of the research interviews. The year after that we shared our new profitability model and financial dashboards.  At the most recent retreat, we launched new guidelines to align compensation with profitability.

Of course, there were some folks who pushed back and said, “Why rock the boat and create all this disruption and inevitable resistance for a system that's working great?”  The answer was simple: Just because we’ve been successful in the past doesn’t mean we’ll necessarily be successful in the future. It is better to align compensation with the behaviors we need for long-term success before we are forced to.

So, right from the start we discussed possible changes with compensation.  We heard what they had to say, and factored that into the development of our new system.  Since then, we’ve continued to provide them with information, so none of this is coming as a surprise to anyone.

Q:  What advice would you have for other firms that want to change compensation to reward efficiency?

A:  Plan for enough time to build consensus, and start with a widely-shared model for measuring profitability. Learn the basics of change management. Anticipate resistance. Engage partners in the process. Don’t make them feel like the change is being forced on them but rather that they are part of the change.

Q:  How does Stewart McKelvey define profitability?

A:  Profitability is a very difficult concept to wrap one’s head around in a law firm. The issues largely revolve around the idea that partners are both workers and owners. Is partner income a cost or profit?  Any profitability model must answer that question somewhere in the middle if it’s going to make sense.

The precise details of our approach are proprietary, but the model effectively answers the question “What is your break-even point?” for every timekeeper. 

For example, suppose I look at a particular client or matter and see that we're having problems with a fixed price deal based on significantly discounted hourly rates.  One possibility is that partners with high hourly rates are putting in more hours than necessary.  If junior partners, senior associates or paralegals might be just as capable of doing that work at a much lower price point, that would indicate that more effective delegation is required. But we don't want to be obsessive about using this one metric in every situation, because all the metrics have flaws. We think of our profitability model as a framework that helps drive better decisions, but it isn’t the only consideration.

If you look at the compensation submissions that partners have prepared and the feedback they provide on other partners, as well as financials, you can get a pretty good picture of how effective somebody is at client matter management and project management. It's not perfect, but it is a step in the right direction.

Q:  Can partners keep track of their personal profitability in real time?

A:  Yes, we’ve just launched a new automated compensation app along with a highly flexible financial dashboard system that we developed in-house that is uniquely customized to our needs.  Each partner can log into at any time and within a few clicks have instant access to eye opening trends and patterns that can lead to better decisions.  I had several IT developers working with me, and this will be the conduit for managing LPM activity, smart goals, and all relevant metrics.

Initially, partners build a practice plan in the app that tracks all matters a partner is involved in.  This goes beyond matters where you are the billing lawyer or the responsible lawyer.  It also includes matters that you’ve referred to colleagues or matters where you helped develop the business in some other way. Our compensation committee can also view your practice plan at any time with a click of a button on our home page.

In the past, compensation was based on dozens of different data points and written submissions.  This made it difficult for a partner to track their contributions in practice, and difficult for the compensation committee to assess their performance at the end of the year. Now it's all packaged up into a single application.

I'll also be able to work with partners in developing their plans and then check in with them throughout the year to see how they're doing. If our goal is to improve realization, revenue, or profit for a particular client, I'll be able to track in real time how they're doing with a couple of clicks.

Q:  Do you think this new app will change the way lawyers behave?

A:  Yes, I do.  I think too often what happened in the past was lawyers were just so busy doing the work and sending their bills out and writing off fees, that they didn’t understand the impact it had on the firm. And it's been an eye-opener to have these dashboards now that can be used to instantly diagnose a problem.  It is built around very compelling visuals showing downward and upward lines. 

I think a big part of becoming more profitable is not just about my team working directly with lawyers in LPM, although that definitely helps.  But, it’s also about building an increasing awareness of the impact of a reduction in fees.  In the past, lawyers too often thought, “What if I offer a 5% discount on a $100,000 matter?  It's just $5,000 off the total, so no big deal. The client gets a little value-add and a little reduced cost.”

But that $5,000 might eliminate half the profit on a particular matter. If partners don't understand the economics behind it, they’re probably going to make less than ideal decisions. And so, I think increasing the awareness of profitability metrics through this app will make a real difference.  We're talking about percentage increases in firm-wide realization as a result of these initiatives.

Q:  What do you have planned to further accelerate your LPM initiatives?

A:  This year we plan to follow the process recommended in one of the templates in the online fifth edition of your LPM Quick Reference Guide.  We’re going to organize a panel discussion of lawyers that have already experienced the benefits of LPM first-hand. We are targeting specific Client Service Team Leaders with large clients and asking them to sign up for our LPM coaching program.   Then we’ll get these people to champion the program and speak about the benefits that they've seen. And we're hoping that will drive even more usage of the app as we move into year two of this new compensation system.

Q:  So, between the new app and the new compensation system, your firm has created a huge incentive for lawyers to talk to you and your team and ask for LPM assistance.

A:  Yes, that's absolutely right.   We will be providing more coaching and rigor around LPM best practices.  This will be a critical part of effective matter management. And now lawyers will be compensated for changing their behavior, so the firm can continue to meet client demands in an increasingly competitive marketplace.

Q:  Are you currently seeing an increase in lawyers coming to you and looking for LPM advice?

A:  There’s no question about it. We’ve seen an increase because everyone knew these changes were coming.

Q:  Are you confident that the combination of LPM training, tracking profitability in the app, and changing your firm’s compensation system will boost profitability for the firm?

A:  Totally confident. Just the idea that we have successfully been able to realign our compensation system to reward certain behaviors is a hugely positive outcome for our firm.

I think we’re well positioned now to be able to drive more and more LPM activity, now that it’s factoring into compensation decisions.

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.

January 29, 2020

Case Study: An Integrated Approach to Providing Clients with Greater Value (Part 2 of 2)

By Tim Batdorf and Jim Hassett

Q: In the first part of this post, we talked about the big picture of your approach, and the success it has produced. Now let’s go into the nuts and bolts, and discuss how the matter management side of your team operates.

A: The matter management team is a small but mighty part of our group. In many ways, it is the glue that holds the group together. Once we agree with clients about pricing, the matter management team takes over and is involved for the rest of the matter. It makes sure we properly track and manage what we’ve agreed to and communicates with the client about what is happening. It also helps drive all of the client technology we are building. It talks to our internal and external clients about what they need and develops the requirements that help our technologists build solutions.

When I came to Ballard Spahr four years ago, many of our interactions with clients centered on the pricing function. That’s why it’s so great that the matter management team now plays a prominent role. While pricing is incredibly important, once matters are underway our clients also want to know how we deliver on what we agreed to. If we don’t engage in matter management, costs quickly escalate. This can jeopardize client relationships and affect the firm’s bottom line.

Q: That’s very interesting. As you may remember, several years ago we interviewed 15 LPM Directors, including you, about how their job was defined. At that time, most spent more time on setting prices for new matters than on managing the work to help assure that lawyers stayed within these budgets. We concluded that (p. 298 in the fourth edition of our Legal Project Management Quick Reference Guide), “in our opinion, improving the management of existing matters would lead to a faster financial return [than improved pricing].”

A: I completed your Certified Legal Project Manager® program and received tremendous benefit from it. I agree that matter management is absolutely essential.

Ballard Spahr has a requirement that attorneys must submit budgets for the majority of their matters when we open them. This requirement encourages us to take a disciplined approach to managing our matters from day one. The budgets go into our matter management application, which gives our attorneys real-time access to the matter to see budget-to-actual information. One of the challenges we face, however, is that budgets are iterative and often change over time. This is where the matter management team comes in. It takes an active role in working with our attorneys on updating budgets, setting up phase and task codes that track budgets, monitoring, reporting on, and actively managing ongoing matters. The team helps attorneys proactively address with clients out-of-scope issues that may arise.

Q: The function of the value-based pricing team seems obvious from the title. Is there anything you’d like to add?

A: The pricing team plays a crucial role in our department and is often involved with matters before they come in. The team works with our attorneys to identify the diverse team members who will be responsible for working on the matter or matters and to model several pricing options from which clients can choose. During the RFP process, team members are often also involved in communicating the benefits of our program to clients and demoing our Ballard360 client technology.

Q: What about the data management part of the team?

A: Our data management team is busy right now working on an enterprise data warehouse that combines all of the firm’s data and stores them in one place. One of the challenges clients and law firms have is that we collect a lot of data that go unused or are difficult to use. The data warehouse combines and normalizes data from all firm applications and many of our vendor applications. Having the data warehouse helps us build dashboards with more sophisticated reporting and data analysis capabilities. Our goal is to move away from simply providing our clients with data and having the conversation end there. We want to be seen as a strategic partner to our clients. That means using data analytics and information we’ve gained on client and industry trends to make recommendations regarding how clients should approach business issues and manage client matters. In 2020, we also will focus more heavily on how we can incorporate more artificial intelligence (AI) and machine learning into this process.

Q: And what about the practice technology team?

A: Our practice technology team is an interesting group because it includes IT Developers and Legal Solutions Architects, who are trained lawyer technologists. The Developers help us start conversations with our clients about what they want in terms of technology, and then build and implement that technology. We follow an iterative process that we constantly modify and improve based on feedback obtained from clients. Current projects include client extranets, document automation, case management, and financial and knowledge management dashboards.

Q: Do the four teams work together?

A: Absolutely! It’s essential. The key is having constant conversations and interactions with one another so that we are all rowing the same direction and share the same vision for how to get there. Having team members who are focused on different aspects of pricing, matter management, data, and client technology is extremely valuable. Suppose there’s a complex commercial litigation matter that requires an annual fixed fee with a collar. It’s unlikely that the IT developers or data people are going to understand the way the matter needs to be priced, set up, or managed, but other members of the team do. Once the matter is in the door, and is up and running, then the data and technology teams step in to help us implement Ballard360 technology for the client that delivers cost-effectiveness, value, and efficiency. Having a diverse team that works together so closely is how we move the needle to quickly and proactively support our clients and address issues that arise.

Q: Can you give me another example of this collaboration?

A: We’re now using client portals to manage our real estate transactional work. We build an extranet site for each new matter, upload the tasks that will be required, and use a color-coding system to manage the tasks related to the matter. This allows the Ballard team, the client, the borrower, and third parties to communicate and exchange documents and information relating to the matter. It's an extremely efficient, cost-effective, and interactive way to manage deals.

Q: Has your view of LPM changed as you’ve worked with this group over the last few years?

A: My view of LPM has definitely evolved over the years. When I first started doing LPM, my primary focus was scoping, budgeting, and budget-to-actual reporting. I then started to focus on process improvement efforts. Now, we do both, but we’ve incorporated a focus on using technology and data analytics to manage our matters. I view LPM as a tool kit you use to manage matters. Some matters need all the tools we have to offer, while others need only one or two.

Q: You referred to the matter management subgroup as “the brains behind the entire client-value innovation function.” Would you say they are the most important piece of the puzzle?

A: LPM is definitely important, but it’s just one of the ways our team provides value to clients. Each person’s role on the team is important, and the team is doing amazing things. I am excited to see where we go in the next year or two.

Q: Where do you predict you will be focusing most of your energy and resources in the next year or two?

A: The team’s importance is growing because what we are doing is so vital to clients. We may need to continue to grow or borrow resources at the firm to support this demand in a strategic way. We’re also doing great stuff with technology, and the team’s work is paying off. What we are doing next year at this time will probably look completely different. More to come!

January 15, 2020

Case Study: An Integrated Approach to Providing Clients with Greater Value (Part 1 of 2)

By Tim Batdorf and Jim Hassett

This post is based on a recent interview with Melissa Prince, the Chief Client Value and Innovation Officer at Ballard Spahr, a nationwide firm with more than 650 attorneys in 15 offices. She oversees the firm’s award-winning Client Value and Innovation Program, which focuses on creating a customized client experience centered on value, cost predictability, and efficiency. Under Melissa’s leadership, Ballard Spahr was named to the Financial Times’ “Most Innovative Law Firms: Business of Law” list, a BTI Consulting innovation “Mover and Shaker,” and a finalist for the American Lawyer Industry Awards for best law firm/client team and best business team.

Q: Let’s start with a 10,000-foot view of how your group is organized, and your role.

A: I head Ballard Spahr’s Client Value and Innovation Program, and oversee the pricing, matter management, practice technology, and data management teams at the firm. Our group includes more than 20 business professionals with legal, finance, technology, data science, and project management backgrounds and certifications.

Q: And how does the Client Value and Innovation Program fit into Ballard Spahr’s organizational chart?

A: We are a stand-alone department that reports to the Executive Director and works closely with the firm’s Chair, Managing Partner of Finance and Operations, Strategic Planning Partner, Board, and Executive Team. The degree of support we have at the top is a key factor in the department’s success. We engage in rigorous planning when we take on new clients and engagements. We perform detailed scoping exercises, select diverse team members to handle each matter, prepare budgets, and provide clients with fee arrangement options. Each new arrangement is reviewed and approved by our Managing Partner and legal department leadership. Since we started our program several years ago, the team has earned the respect and trust of our attorneys. They understand that the process has leadership support and is tied to the firm’s long-term goals and strategy. 

Q: Before we get into the details of how this works, let’s briefly jump to the bottom line: Has your group been able to produce clear evidence of financial success?

A: Absolutely. One of the easiest places to see this is in our role in growing existing and new client partnerships. For example, several years ago one of our clients—a Fortune 500 company that was working with several hundred law firms at the time—decided to increase efficiency and cost predictability by consolidating all of its legal work with just a few firms. It put out a request for proposal (RFP) to select the firms that would handle all its legal work.

Ballard Spahr was chosen as a finalist. The client selected us not only because of our legal experience but also because of our sophisticated capabilities in pricing, matter management, and client technology, which other firms did not have. Much of what we talked about in the client interview meetings was how we intended to price and manage matters, because that was incredibly important to the client. We made a commitment to budgeting and managing the client’s matters and thinking innovatively about the service we could deliver.

The client named Ballard Spahr to a panel of just three firms to handle all its legal work. At the time we responded to the RFP, we had done a limited amount of work with this client. Within the first year after the RFP, however, the work quadrupled. It is a huge success story for our group and the firm. And it is one of many success stories I can point to that demonstrate the value of what Client Value and Innovation is doing.

Q: Did the process of working with this client change your approach in any way?

A: We customize our approach to each client’s needs, and the experience with this client definitely helped us realize that we need to focus more heavily on managing client relationships for larger firm clients.

The problem with law firms is that administrative functions often are siloed, and it’s hard to get everyone to work together closely and communicate about what’s happening. When we started to onboard new matters for this client, we quickly realized that we needed a single point of contact at our firm to ensure that matters were set up properly, to develop budgets, report on monthly accruals, and to help with matter management.

Our matter management team stepped in and now plays a central role in overseeing this process. We understand what’s going on in every matter. We work with the lawyers to manage each matter to make sure we stay within budget, comply with the client’s outside counsel guidelines, and bill the matter the right way. We developed real-time budget-to-actual reporting so that the client can see exactly what's going on at all times, and can be proactively involved in making decisions about its matters. We also worked with the client to develop a quarterly financial report template used by all of the client’s law firms, which provides portfolio- and matter-level details and compares financial performance and cost savings. The client also can see the value-adds that firms are providing, such as secondments, CLEs, pro bono work, advice and counseling, and technology.

The matter management group has direct contact with the client and has, in essence, become the client relationship manager on the business side. We also work directly with the attorneys managing the legal work to ensure that we are doing everything we can to develop the client relationship.  

Q: Do you think that this kind of client-facing role for Legal Project Management (LPM) teams will grow at your firm and at others?

A: I do. In the world we live in, clients are driving change at law firms. Clients with larger legal departments now have legal operations people who expect law firms to have business people in similar roles who speak their language and help manage their matters. Clients with smaller legal departments or “teams of one” that don’t necessarily have a dedicated legal operations function also appreciate that firms like Ballard Spahr have invested in resources, like our team has, to provide support. Our team is much more client-facing than we were even a couple of years ago. I now meet with several clients a week to hear about their needs and work with them to develop pricing, matter management, and technology solutions. I think the importance and the client-facing nature of my role and others like mine will only continue to grow.

In part 2 of this blog series, we will spotlight how the matter management team and other teams at Ballard Spahr operate to provide award-winning client value and innovation.

January 01, 2020

Legal Project Management: 2019 Year-In-Review (Part 2 of 2)

According to law firm leaders, efficiency is here to stay.  86% say that a focus on practice efficiency is a permanent change in the legal marketplace.  Efficiency ranked number one among 18 different trends (p. 1, LFiT).  

So, what tactics do law firms use to increase efficiency?  It appears that the most effective tactic is rewarding efficiency and profitability in compensation decisions.  A solid majority (62%) report that they experienced a significant improvement in firm performance when using this tactic (p. 23, LFiT).  This is also consistent with common sense.  If you pay someone to do something, they’re more likely to do it.

But digging deeper into the details presents a more nuanced story.  When asked about several different efficiency tactics, a large percentage of law firm leaders said it was “too soon to tell” (p. 22, LFiT) which means they didn't have sufficient information to respond in a meaningful way.

If we eliminate those respondents who said it was “too soon to tell,” and if we focus exclusively on those who have sufficient experience to provide a knowledgeable response, we find that:

  • The LPM tactic of systematically reengineering work processes is highly effective, with 91% saying it resulted in a significant improvement in firm performance.
  • This is closely followed by the tactic of rewarding efficiency and profitability in compensation decisions, at 89%.
  • Providing ongoing project management training and support is also highly effective, with 86% of law firm leaders saying it resulted in a significant improvement in firm performance.
  • Other tactics such as: (i) using technology tools to replace human resources, (ii) using non-law firm vendors, and (iii) implementing a formal knowledge management program were also found to be effective at rates of 81%, 80%, and 76%, respectively.

In essence, what this data tells us is that each one of these efficiency tactics works the vast majority of the time.

But despite these successes, very few law firms are serious about changing the way they deliver legal services.  Based upon responses from law firm leaders, only a small handful of firms (less than 2%) are doing everything they can to change the way they deliver legal services.  Roughly one-third of law firms (34%) are moderately serious about changing their behavior, and nearly two-thirds of law firms (64%) show little to no interest in changing how they deliver legal services (p. 42, LFiT). 

Why are so many firms so slow to change?  First and foremost, partners don’t want to change.  69% of law firm leaders say that partners resist change efforts.  Even when partners are willing to change, a solid majority (60%) say that partners are unaware of what they might do differently (p. 44, LFiT).  And when a law firm attempts to implement LPM, it takes time to determine whether the program is working.  A slim majority of law firm leaders (53%) said it is “too soon to tell” whether their ongoing project management training and support programs have resulted in a significant improvement in firm performance (p. 22, LFiT).  Despite these challenges, most law firm leaders (54%) say that the urgency to change has increased over the past two years (p. 43, LFiT).

*****

At LegalBizDev, we believe that if a law firm aggressively seeks to implement an LPM program and works to change lawyer behavior, it can make great strides towards resolving the challenges described in this blog series.  For example, understanding what the client wants and communicating value to the client improves client service.  Being a leader in LPM serves as a differentiator.  Actively managing legal matters using a variety of LPM tactics helps ensure that financial data is used correctly and that AFAs are profitable.  LPM coaching helps lawyers overcome resistance to change and understand what they can do differently to become more efficient and profitable.

Even without considering any of the data presented here, it is crystal clear to most law firm leaders that clients want lower costs and greater efficiency.  Our experience is that LPM helps law firms provide these benefits to clients, and this is supported by independent survey data.  The firms that provide these benefits effectively are the ones that are most likely to be profitable in coming years.

LegalBizDev is currently offering complimentary “LPM trends” webinars to LPM decision-makers to discuss this information in more detail, including new data as it is released in 2020.  If you’re interested in a complimentary 30-minute webinar, email us at info@legalbizdev.com or call 800-49-TRAIN today.