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Legal Project Management for practitioners – The non-scary version – Part 1

Posted by Jack Bostelman on Apr 28, 2016 | 0 Comments

This is Part 1 of a two-part series. In this part, the chairman of an AmLaw 100 firm considers the disappointing results of other firms attempting to apply legal project management techniques. He receives an overview in pragmatic terms of the key elements of LPM and learns why the other firms' approaches have not worked.

In Part 2, the chairman is presented with a step-by-step approach to introduce LPM without scaring the practitioners. That approach is based on the notion that only two LPM elements should be introduced at first. These should require only minimal changes to the way practitioners currently work and should be perceived as bringing them immediate value. Part 2 describes these elements, how to roll them out and why practitioners will respond favorably.

A chairman ponders disappointing results at other firms

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Keith Mayfield, Chairman of an AmLaw 100 firm, is pondering how to persuade his partners to adopt Legal Project Management procedures. He has become discouraged after speaking with his counterparts at some other firms.

One firm hired an outside consultant to give seminars to groups of partners, describing the basics of LPM and giving them a practical roadmap on how to proceed. The majority of partners were trained, yet virtually none followed through to implement what they were taught.

Another firm created a stand-alone administrative support group charged with assisting partners in implementing LPM techniques. The firm found that partners for the most part ignored or even actively resisted the offers of assistance from the LPM administrative group.

A third firm focused on implementing LPM in a single practice group, their labor and employment group, which operated a commodity practice that was under tremendous fee pressure. The firm hoped that success in one practice group would lead to broad adoption of LPM across other practice groups. Instead, the other practice groups dismissed the relevance of LPM to their practices.

A fourth firm found that transactional lawyers believed that LPM was relevant only to litigation work, while the litigators adopted the view that it could work only for transactional practices.

Basics of LPM described

Keith understands that Legal Project Management is a formalized version of common sense. It can benefit any practice, including the many whose lawyers claim their practice involves custom work for every matter that can't be planned in advance. In fact, he can see that many successful practitioners employ LPM techniques without realizing it. Keith ticks through the elements of LPM in his mind, trying to figure out why the efforts of other firms appear to become consistently derailed.

Define scope with the client at the outset

When a matter starts, confirm the scope of the work in as much detail as is reasonable in the circumstances. If there isn't time to create more than a generalized scope description, complete the detail as soon as possible (within a week). Scope should be confirmed to the client in an e‑mail or some other writing, so it can be referred to later by the client and the firm.

The purpose of defining scope is to provide a basis for fee estimates that may be given, as well as to enable work to be planned. For example, in an M&A transaction is the law firm providing the tax advice or is that role being played by the client's accounting firm? In a major litigation, what is the extent of the firm's involvement in document review – All documents? Or only documents selected by the client's third-party review vendor? With or without responsibility to supervise that vendor?

The client will be unwilling to pay for work it believes was not part of the scope, so why risk misunderstandings?

Monitor potential scope changes along the way and talk to the client – before work starts – about their effect on the overall fee

Roadmap for communications

The communications roadmap for a matter, as described in the accompanying blog post, is commonly done in chart form. The columns are the names and titles of the various individuals working on the matter for the client, the law firm and third parties. The rows are the subjects. In each cell in the table is placed one of four codes – L-Leading, A-Assisting, C-Consulting, I-Informed – indicating the person's communication/decision role. The chart is circulated to all named in it, and used to guide who's in charge of what (Leading), who needs to help on what (Assisting), who needs to be asked for input on what (Consulting) and who merely needs to be told what has happened (Informed).

As work gets underway, changes will inevitably occur from the original expectations. Some work may no longer be required to be done. More likely, new work will be requested. When that happens, the law firm should have a system to identify that fact. For example, all team members should know the original scope and should understand they must speak to the supervising partner if asked to perform work beyond that.

When a scope change occurs, the relationship lawyer at the law firm should so advise the client right away, and provide an update to any previous fee estimate. Even where no estimate has been given, the client should be made formally aware that work has expanded. The client may have an implicit expectation about the fee that may be thrown off by an expanded scope. For example, the client could expect the fee to be similar to that of a prior matter because of the perceived similarities of the two matters, which may no longer be true after a scope expansion.

Communicate correctly – talk to the right client person for the issue at hand

This one is obvious in hindsight, but not always so clear during the conduct of a matter. Telling the associate general counsel that expanded scope will increase the estimated fee by $25,000 does no good if that person is not responsible for negotiating legal fees and fails to tell his or her superior. At billing time, that will become the law firm's problem.

The best practice is to establish at the outset a written list of who on each side is responsible for deciding certain questions (both substantive to the matter and administrative, such as fees), who needs to be consulted and who merely needs to be informed.

Build a budget for each major segment of the matter, even if not shared with the client

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Keith realizes this may be where a lot of lawyers throw up their hands. He later learns that's because they imagine a process that's unduly complicated. A simplified version of budgeting that any practitioner can handle is described later in Part 2 of this series.

Monitor actuals against budget for each major phase and take action

Using a progress report of actual fees against budgeted fees is a powerful use of the budget process, and a natural by-product of task coding. Being able to take action to manage the lawyers working on the matter before it runs off the rails is empowering. Again, lawyers will likely resist this part of the process, though. A simplified and lawyer-friendly approach is described later in in Part 2 of this series.

Communicate fee-affecting issues with the client along the way

Sometimes the reason that actuals exceed budget is that the firm simply underestimated the amount of work that would be required. Most lawyers shy away from a discussion with the client about underestimating fees. Still, if the firm intends to have that discussion and not write off the time, then sooner is always better than later. The client may have more options, and greater ability to re-set internal expectations, if the issue is raised as soon as it is discovered. If the lawyer waits until the matter is completed to discuss overages with the client, the client will wonder whether the firm has sufficient controls to detect overages. While the firm may or may not get paid for work that exceeds the estimate, the client will have greater respect for a firm that proves it can detect the problem in a timely fashion.

As previously noted, it does no good to detect a problem but then report it to the wrong individual at the client. The lawyer at the firm should be sure the client contact has authority to negotiate fees. If in doubt, ask. It's very unlikely the client contact will be offended by the question.

Discuss “lessons learned” internally and with the client after completion of the matter

Legal project management toolkit for M&A practitioners

Illustrating that legal project management has made inroads into hardcore transactional work, the American Bar Association recently published a book to bring LPM techniques to M&A practitioners, entitled “Using Legal Project Management in Merger and Acquisition Transactions (ABA Books 2016)”.

Written by seasoned M&A practitioners in the M&A Committee of the ABA's Business Law Section, the 135-page book consists of 14 checklists and templates for managing all phases of a deal, including tasks and responsibilities, communication protocols, scoping, deal negotiation issues, due diligence assessment, drafting issues and negotiation tool, post-matter assessment, M&A task codes and alternative M&A fee arrangements. These tools are also available to book purchasers for download. I contributed material and was a member of the editorial group of the task force.

In a true project management process – as practiced by consulting firms and other professional services businesses for decades – after completion of the matter, the law firm's team would convene for a “lessons learned” meeting. This meeting is also referred to as an after-action review or post mortem. Conducting these is still rare within law firms, but is on the uptick because it can pay big dividends.

The goal of the meeting is to memorialize for the benefit of others within the practice group the things that worked well and any that didn't. These could be substantive steps in the conduct of the matter, as well as client relationship actions, such as whether any of the legal project management techniques discussed in this post were employed. For example, “we had a successful outcome but the client was unhappy because our fee fluctuated from month to month. Next time we should try a flat monthly fee with permitted adjustments if the cumulative flat fee falls behind our actuals.”

These meetings are initially conducted internally within the firm. Some firms also conduct a second meeting, without charge, jointly with the client. Important elements for a successful meetings are:

  • a checklist to speed the meeting
  • the right neutral meeting host, such as a partner who did not work on the matter, and
  • an atmosphere of constructive discussion and not blame.

The problems with the other firms' approaches

When Keith speaks to a consultant, he is reminded it is well-established that the lawyer personality tends toward being skeptical and autonomous, yet low on bouncing back from failure or rejection. The latter translates into a reluctance to try new things or to have difficult conversations with clients.

These personality traits need to be taken into account in an LPM initiative, advises the consultant. As one firm Keith spoke to learned, merely providing LPM training to a skeptical and autonomous group that is afraid to try new things is not a recipe for success.

As the second firm he spoke to discovered, offering administrative support also doesn't work if the group being helped doesn't accept the premise that help is needed. And as the third firm found, even if one practice group succeeds, other practitioners will apply their skepticism to distinguish their situation from that of the successful LPM group and thereby justify their reluctance to change.

As the fourth firm he spoke to found, this skepticism runs so strong that transactional and litigation lawyers may each believe LPM applies only to the other group, when in fact it equally benefits both groups.

In the next post

Part 2 of this post describes an approach to LPM that won't scare practitioners because it involves only two LPM elements, requires only minimal changes to the way they work and brings them immediate value.

[Photo credit: © Can Stock Photo Inc. / 4774344sean & AndreyPopov]

About the Author

Jack Bostelman

Jack Bostelman is the president and principal consultant of KM/JD Consulting LLC. Before founding KM/JD Consulting, Jack practiced law in New York for 30 years as a partner of pre-eminent AmLaw 20 firm Sullivan & Cromwell.

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KM/JD Consulting LLC renders impartial practice management advice to law firms on improving efficiency, increasing profits and reducing risk, emphasizing knowledge strategy.

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Before founding KM/JD Consulting LLC, Jack practiced law in New York for 30 years as a partner of pre-eminent AmLaw 20 firm Sullivan & Cromwell.

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