legal project management - where the rubber meets the road

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Image [cc] Burning Rubber Lori Hersberger

Legal Project Management

Where the rubber meets the road2/19/2013

Scott Preston & Ryan McClead

Legal Project Management (LPM)

provides a framework of

accountability, transparency,

predictability and ultimately less

cost. If you are interested in a more

consistent, repeatable, and

continually improving practice of

law, LPM is for you.
http://www.flickr.com/photos/lorihersbergerhttp://www.flickr.com/photos/lorihersbergerhttp://www.flickr.com/photos/lorihersbergerhttp://www.flickr.com/photos/lorihersberger


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Legal Project Management

Where the rubber meets the road

Table of Contents

Legal Project Management, why now?.......................................................................................... 1

The Tipping Point............................................................................................................................ 2

Client Needs ................................................................................................................................ 2

Partner Concerns......................................................................................................................... 3

Legal Project Management 1.0....................................................................................................... 4

Legal Project Management 2.0....................................................................................................... 6

Planning and Budgeting.............................................................................................................. 6

Execution..................................................................................................................................... 7

Monitoring and Controlling ........................................................................................................ 7

Conclusion ....................................................................................................................................... 9


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Legal Project Management Page 1

Legal Project Management, why now?

Project Management, which has been around since the 1950s, is defined on Wikipedia as the

discipline of planning, organizing, motivating, and controlling resources to achieve specific

goals. Lawyers have been performing these functions as they relate to delivering legal services

since the beginning of the profession. They plan matters, delegate responsibilities, mentor their

subordinates, and ensure that each legal project is completed in a manner that will please the

client. A select few lawyers have used general-purpose project management software, such as

Microsoft Project, to manage their matters for years, but most project management in the legal

sphere is still performed by instinct. Attorneys rely on their vast experience to guide

management decisions, which has always worked well. Or at least, has always worked "well

enough". Unfortunately, the hourly billing model actively rewards inefficiency. If it takes fifteen

hours to complete a task that should have taken five, then the inefficient lawyer has just tripled

revenues. In such an environment even those attorneys that are inclined to actively manage

their projects have no incentive to improve their management techniques and the profession asa whole has no impetus to evolve.

We may have continued indefinitely down this path with attorneys managing projects "by ear"

and raising their rates ten percent annually, but the economic downturn in 2008 provided a

much needed wake up call to the industry. Over the previous decades many of our clients have

begun to implement quality assurance and efficiency measures like Six Sigma and LEAN

borrowed from manufacturing industries. When they began to feel the effects of the 2008

downturn, they started to assess their service providers just as they had themselves. They

began to demand the same levels of quality, accountability, and efficiency from their legal

service providers in the name of controlling costs. Many law firms responded in the only way

they knew how: they discounted their services. They took a percentage off of their hourly

rates; they wrote off expenses that they had traditionally recharged to the clients; they

pretended that the task that had taken them fifteen hours to complete had only taken them

five; they laid-off non-essential workers, then less-essential workers, and then, in some cases,

attorneys. Five years later many firms still act as if the old way of doing things will return just as

soon as the economy turns around. However, a recent reportco-written by Citi Private Bank

and Hildebrandt Consulting based on surveys conducted by Citibank and Thomson Reuters Peer

Monitor states:

it is time to let go of any lingering notion that the industry will revert to the

boom years before the Great Recession anytime soon. With profit growth and

other financial indices reaching lower setpoints in the past four years, we

anticipate that the current state of the industry will remain the norm for the

foreseeable future.
http://hildebrandtblog.com/category/elsewhere-on-the-web/thomson-reuters-news-insight/http://hildebrandtblog.com/category/elsewhere-on-the-web/thomson-reuters-news-insight/http://hildebrandtblog.com/category/elsewhere-on-the-web/thomson-reuters-news-insight/


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Gone are the days of one-line billing "for services rendered" and they are never likely to return.

In order to survive in this new world law firms must be accountable to their clients, providing

greater transparency, price predictability, and open communication. In this environment the

'ad hoc' project management that lawyers have done for years will no longer be sufficient.

Practicing law in the "new normal" will require a mature and systematic approach to Legal

Project Management (LPM).

The Tipping PointThere is no longer any doubt that the legal market has fundamentally changed in recent years.

Every firm felt the weight of their clients demands and responded in whatever way they were

able: cutting rates, cutting expenses, making promises, and often begging for work. We believe

we, as an industry, have reached a tipping point where client demands for better price

predictability, reduction of risk, better communications, and an overall transparency of service

will require a systematic and consistent approach to providing legal services. Firms that choose

to continue to rely only on customer loyalty and brand recognition will begin to lose out to

those who open up the process to their clients and embrace the greater consistency and

predictability of LPM.

However, LPM is not simply a tool that improves the client experience. It can also ensure that

partners needs are more consistently met as well. Partners are concerned with many of the

same things they always have been: How to get new business?; How to make the client happy

so theyll return?; How to limit risk to themselves and the firm?; and ultimately, How to make a

profit doing it? Legal Project Management addresses both client and partner needs.

Client Needs How LPM Can Help

Price predictability A fee schedule explaining when

and how work will be billed,

both as a function of time or

hours, as well as cost or dollars

Deliverable by:

- developing a project plan

- allocating resources to that plan

- keeping the plan current

- tracking and monitoring progress

against the planPrice certainty The budgeted price, or the total

cost to the client

Transparency Openness provides a means to

trust but verify what the law

firm is doing

Deliverable by:

- tracking and monitoring progress

against the plan

- sharing progress with the clients on a

regular basis

- controlling costs

Communication Improved communications,

including real time status

reports


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Partner Concerns How LPM Can Help

Getting Business Improved process and increased

quality of service will increase

partners ability to get business.

Clients are asking for improved efficiency

from law firms.

- RFPs are asking about efficiencyinitiatives

- RFPs specifically include questions about

using project management

- project management enables greater

accountability

Client Satisfaction Partners want to make sure that

the client is happy with the

service they are receiving.

Understanding the clients main concerns

(price, transparency and communication)

and delivering on those points will go a

long way in keeping clients satisfied.

Performing an After Action Review is agood way to focus on areas of

improvement from the clients

perspective.

Return Business Partners want to do everything

they can to maximize the

likelihood of working with the

client in the future.

Partners who are able to provide a

project plan, an accurate budget and an

ability to deliver services on budget will

gain the trust of their clients.

Outcome /

Limiting Risk

Partners want to control and

limit risk.

Using a project management tool to

actively manage a matter will providegreater control and understanding of the

entire process of delivering legal services.

Realization /

Profit

Partners want to make sure they

are making a profit on the work

they and their teams are

performing.

Planning and budgeting will help the

partner understand, at a high level, how

profitable a new matter can be. Tracking

efficiency and productivity as the project

progresses will improve the likelihood of

maximizing realization in the current

project and improve the planning of

future projects, thereby increasing

efficiency (and profits).


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Robert Brunson, a partner at Nelson Mullins who has been using Microsoft

Project to manage complex litigation for more than ten years, provided his view

on using Legal Project Management:

LPM provides a framework of accountability, transparency, predictability

and ultimately less cost. By creating a plan at the outset, client andcounsel are forced to consider the many different paths and outcomes of

a particular piece of litigation, including consideration of staffing

alternatives such as virtual law firms or offshoring in advance of the work,

which could potentially lend itself to these alternative staffing

options. This dialogue often leads to a better engagement by the client in

important details early on, details that can be the seeds of unwanted

surprises which so often frustrate clients and sour the professional

relationship.

While the points illustrated above are obviously not the only points of concern between a

partner and his or her client, they are central to every engagement and are the points most

frequently discussed by General Counsel. Meeting the price is important, but more important is

the opportunity to have meaningful discussions with a client about the progress of their matter.

All of the points and discussions outlined above are inter-dependent and when done correctly

lead to trust.

Legal Project Management 1.0Even before the economic slump a handful of legal technology vendors recognized anopportunity to help firms better understand and budget for their non-hourly billing or

Alternative Fee Arrangements (AFA). AFAs are not new to the legal industry; contingency and

fixed fee pricing have been available for a long time, but in recent years there has been a

significant increase in AFA requests from the client side. Corporations have begun to push back

on the standard annual increase in lawyers' billing rates. They want not only better pricing, but

better communication and a better understanding of the amount of time and effort spent

completing individual tasks. Attentive vendors have started adding AFA planning and budgeting

functionality to their existing software solutions, or in some cases writing new solutions from

the ground up. These rudimentary systems have quickly garnered the label Legal ProjectManagement software (LPM 1.0).

While Project Management as a discipline has had nearly 60 years to mature and develop, the

application of PM principles and techniques to the legal environment is still very much in its

infancy. Traditional Project Management can be thought of as a stool resting on three iterative

and overlapping developmental stages: Planning and Design, Execution, and Monitoring and


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Controlling. For our purposes in LPM we call the first stage Planning and Budgeting rather than

Design. All attorneys believe that they execute, monitor, and control their projects already, but

many will concede that they do not plan or budget adequately. Consequently, Planning and

Budgeting is the clear low hanging fruit of LPM 1.0 and vendors have focused most of their

efforts where they believe they can most easily gain a foothold.

LPM 1.0 promises to provide firms with three new abilities: (1) The ability to create baseline

preliminary project plans or templates; (2) the ability to create matter specific budgets based

on prior client work that can be used to win new client work; and (3) the ability to compare

alternative staffing scenarios, which will allow the firm to produce the same work product at a

lower cost to the client while still making a profit for the firm.

Unfortunately, most of these first generation LPM products

struggle to balance the development of project plans that are

detailed enough to create accurate budgets without being so

complex that they slow the budgeting process to a crawl. Many

of them have trouble modeling a firm's prior work to develop

project plans for future work, because phase and task codes

available from past matters are not accurately or consistently

recorded. And while alternative staffing scenario analysis

sometimes makes it possible to reduce the cost of services to the

client, it does little to help the firm better understand the

process or arrange their staffing levels over time.

In contrast to the Project Management three-legged stool, LPM1.0 is a one-legged stick chair. It can hold up as long as the

project is otherwise perfectly balanced, but the slightest wobble

sends the project swiftly to the ground. Legal projects are rarely so well balanced. The greatest

plan and budget in the world is often out of date as soon as the matter begins. Attorneys must

work the plan and adjust as they go. If they dont actively manage and adjust resources

throughout the course of a project, then successful completion of a matter or even successful

achievement of todays immediate goals may be nothing more than coincidence and will

certainly not be easily repeatable. LPM 1.0 with its focus on Planning and Budgeting is a good

and necessary step, but on its own it does nothing to reduce the risk of bad outcomes, costoverruns, time delays, or client dissatisfaction. Additionally, it does nothing to improve the

firms efficiency, or to increase the transparency and quality of communication between the

firm and the client.

The next generation of Legal Project Management software (LPM 2.0) extends and expands on

the Planning and Budgeting capabilities of earlier products, and it includes tools to help with


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the Execution and Monitoring and Controlling stages of Project Management. Personal beliefs

to the contrary, most attorneys do not execute, monitor, or control their projects any better

than they plan and budget for them. LPM 1.0, with its focus on Planning and Budgeting is a

great introduction to the concepts of Project Management, but LPM 2.0 fills in the missing

pieces.

Legal Project Management 2.0

Before we delve too deeply into the new aspects of LPM 2.0, it may be valuable to take a step

back and explore the stage that LPM 1.0 attempts to address.

Planning and Budgeting

After a new legal project opportunity is defined, planning begins to determine the full scope of

the project. This is done by defining the desired outcome for the project and developing a Work

Breakdown Structure (WBS) that will ultimately lead to that desired outcome. The WBS defines

any major objectives and project phases, and then breaks those down into discrete tasks

required to meet the objectives and complete the phases.

Once the desired outcome and list of tasks is established, the project manager can determine

the necessary resources and levels of expertise required for each task, as well as any resource

constraints that might impact the outcome. Those constraints might include expertise (Do we

have the right people to do the work?), or time (Do we have the capacity to complete the

project on time?), or technology (Do we have the right systems in place?).


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Budgeting is intended to provide a realistic estimate of the eventual costs to the client as well

as considering the firms expenses. The project manager assigns individual people, or

resources, to specific tasks identified in the WBS, and then estimates the amount of time each

task should take to complete. This is where the various alternative staffing scenarios come into

play. By experimentally adjusting the degree of leverage on a particular matter (i.e., pushing

work to the lowest cost performers who can adequately complete the work while meeting all

other project completion criteria), the firm can reduce the cost of its services for the client,

better compete with other firms on price, and potentially increase their own profits.

The promise of LPM 1.0 is that these steps, in conjunction with the work a firm is already doing,

will be enough to meet client demands and maintain business, but in reality, it is in the next

two stages that the proverbial LPM rubber meets the road.

Execution

The Execution stage is where those who were assigned tasks during Budgeting interact with

their tasks. Execution may seem the most intuitive and simple of the stages, but it is this stage

that will be the most difficult for firms to embrace, because quality Execution requires a

wholesale change of attorney mindset from meeting hourly requirements to completing

assigned tasks. This, more than any other aspect of Legal Project Management, most

fundamentally cuts against the established practice of most firms. Hourly goals determine

bonuses, equity points, promotions, office selection, and nearly every other aspect of an

attorneys professional life within a firm. In LPM 2.0 efficient quality work beats quantity work

every time. This turns conventional law firm wisdom on its head. While convincing firms to

drop their existing pay structures and adopt a new model is way beyond the scope of this

paper, and we absolutely do not expect such a change to take place immediately or to happen

easily, we do expect it to happen eventually. The benefits of a task-based system of execution

far outweigh that relic of a bygone era of plenty, hourly targets. Those benefits are realized in

the final stage of LPM 2.0.

Monitoring and Controlling

By systematically focusing on task completion, rather than hours worked, this final stage can

produce accurate project status reports and track financial projections to ensure that the

project is on schedule and within budget. With real time, up-to-date task information it is also

possible to produce ongoing budget to actual variance reports, for both time and costs, whichcan be shared with clients or used for internal evaluation and efficiency improvement. Until we

begin to attribute work to tasks, reporting budgeted to actual work is a manual process

involving the deconstruction of time entries and/or the reliance on phase and task codes, which

in the past have proven unreliable. Monitoring task completion also provides a context for the

work being done. The client can look through agreed upon tasks and get a much better sense of

how a project is progressing. This transparent process builds trust with the attorney and eases


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the pain should the project run into unforeseeable stumbling blocks or cost overruns. For the

attorney this eventually becomes a much more intuitive way to work. No one gets up in the

morning thinking, I need to spend 4 hours and 6 minutes on this, and 2 hours and 24 minutes

on that. They think, I need to complete this task, and when Im done with it I can begin on the

next one.

In the traditional hourly work model, After Action Reporting and Analysis, should they be done

at all, are little more than personal assessments of how we did or where we need to

improve. They are at best subjective analyses heavily influenced by personality and politics. A

change in focus to task-based Execution and Monitoring will provide hard statistical data,

allowing firms to continually improve their processes and procedures, and to correct or reward

their employees based on actual work performed and tasks completed. Over time clients will

begin to see improvement in the firms delivery of legal services, efficiency and productivity

should increase and costs should come down. In addition, this process of tracking tasks and

closely monitoring results has implications for several other aspects of practicing law, including:

Managing Risk As soon as a firm begins working the perfect project plan, reality

intercedes and the plan must adapt. Tactics may change as they learn more about the

project; and resources change as the workload fluctuates. Timing constraints and

requirements may change as a client's needs evolve. Without task-based execution and

monitoring, the partner has no control or oversight of the impacts these changes have

on the project and no ability to effectively keep the client informed about the impact of

these changes on timing and costs.

Improving Workflow By accurately tracking task completion firms will have a muchbetter understanding of the bottlenecks currently slowing project completion.

Resources can be brought to bear on specific areas giving the team an opportunity to

navigate troubled waters more effectively.

Resource Management - The most valuable (and expensive) resource a law firm has is

its attorneys and support staff. For decades law firms have added headcount on an

annual basis, irrespective of any real analytics to support that decision. Many believed

that even if the work wasnt there immediately, they could always raise rates later to

make up the gap. By incorporating the execution and monitoring phases of LPM into a

firms standard operating procedure, the firm can start to truly understand how it

actually works and begin to intelligently right size its workforce.

Defensibility - The execution phase, because it memorializes who did what and when,

provides an audit trail of exactly how a project was worked and completed.


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A Universal Project Plan - By incorporating the execution phase into an LPM solution,

firms can manage and monitor projects that include external resources. This might

mean pushing work out to lower cost centers (for example outsourcing e-discovery

services) and tracking their progress, or it might mean allowing a client to follow the

progress of the project plan (to an agreed upon level of detail).

Improving Future Project Plans By tracking task performance firms will have a much

better ability to streamline workflow for future work as well as improve project plans for

future use. This makes each iteration of the project plan more accurate than the one

before and greatly simplifies the creation of new project plans.

Improving Experience Databases A complete LPM system tracks individual performers

execution of specific tasks, which can provide detailed information about who within

the firm has experience performing which specific tasks and how much experience they

have. This information can be leveraged by various knowledge systems and Know-

Who databases.

Identifying Professional Development Opportunities The complete LPM system tracks

not only the tasks that individuals complete, but also the time it takes to complete a

task. This provides valuable insight into Professional Development and continuing

education opportunities.

ConclusionBy now it is obvious there will be no return to the glory days of an ever-expanding legal marketand steadily rising hourly rates. Legal Project Management, in its earliest incarnation,

awakened many firms to the need for better project planning and greater control over budgets.

But it also put a heavy burden on partners to ensure delivery of services at an agreed upon

price without providing them any mechanism to control the process.

The second generation of Legal Project Management, by incorporating task management and

monitoring and control mechanisms, now gives the partner a more effective way to deliver

services on time and within budget. LPM 2.0 makes it possible to catch problems as they are

happening, not weeks after theyve already occurred. It improves communication with clients

by being inclusive of the client and making the end-to-end process as transparent as possible.

This gives clients an opportunity to have meaningful and contextually relevant discussions with

their attorney, greatly increasing the level of trust between them.

In shifting from a time management paradigm, in which attorney hours are often captured days

or weeks after the work has been completed, to a task management paradigm, where pre-


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assigned tasks are checked off as the work is done, LPM 2.0 leverages technology to provide

contextually appropriate support resources to attorneys at the precise moment that they are

needed. This leads to a better use of resources, time, money, and ultimately to a better

understanding of the legal process for both the client and the attorney.

Legal Project Management in its more complete form, incorporating all three stages: Planningand Budgeting; Execution; and Monitoring and Controlling, provides many benefits to clients, to

attorneys, and to firms. By far the most important benefit to everyone is a more consistent,

repeatable, and continually improving practice of law.

Scott Preston, Executive Vice President of ERM Legal Solutions.ERM is dedicated to assisting law firms and corporate legal departments quickly and painlessly respond

to the historic changes facing the industry. Our history delivers on a fundamental objective increasing

profits by increasing efficiency.

[email protected]://www.linkedin.com/in/scottapreston http://www.twitter.com/@sapreston

Ryan McClead, Manager of Knowledge Systems, Fulbright & Jaworski, LLPRyan has spent a decade advocating for and implementing, policies, procedures, and tools to improve

the flow of knowledge and information across the firm. He works interdepartmentally to find logical

and technological solutions to problems plaguing individuals, departments, and the firm at large. He is a

regular contributor to 3 Geeks and a Law Blog at geeklawblog.com.

[email protected]://www.linkedin.com/in/rmcclead http://www.twitter.com/@rmcclead

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