Pam Woldow's At the Intersection

A General Counsel’s Take On LPM & Foreseeability

Guest Post by

Russ Dempsey, Vice President and Chief Legal Officer

United Retirement Plan Consultants

Pam Woldow’s recent blog post, Putting Some Pepper Into Legal Project Management, called to mind my own recent successful use of Legal Project Management (LPM) to manage the risks and foreseeability issues in an engagement with one of our outside counsel for reviewing and negotiating leases.

Getting On the Same Page

We lawyers are supposed to be great foreseeability experts, having had the idea drilled into us in law school, and a significant area of jurisprudence, negligence, is founded upon it. As Eugene O’Neill said: “There is no present or future, only the past, happening over and again, now.” Yet both inside and outside counsel too often fail to test our assumptions and identify possible risks in legal engagements, resulting in blown budgets, miscommunication, misaligned interests and sometimes, regrettably, testy disputes. I really wanted to avoid this.

LPM makes a difference in helping firms work within agreed budgets, increase budgeting proficiency, improving communications and – a pressing priority for us these days – structuring value-based billing arrangements. Yes, LPM requires an upfront investment of time, but it can be adjusted to fit the circumstances. Not every engagement requires an elaborate project charter, yet every engagement requires that the parties agree upon their assumptions and look to the future.

Front-End Risk Discussions

I wanted a fixed fee with our firm. They were concerned about the possible impact of some challenging lease provisions, (e.g., escalation-of-rent clauses, building allowances and improvement), as well as onerous leases that threatened the firm with spending so much time that they would take a bath on a fixed fee arrangement.

I worked collaboratively with them to develop a Risk Chart (see below) that would help manage uncertainties that could impact our fixed fee arrangement. The result was that I negotiated a fixed fee that was in my company’s best interest, and the firm came away with a means to manage their time commitment. On our Risk Chart, we agreed on the fee, scope of the engagement, major decision points and who the decision makers were. Then we documented the risks and likely consequences, assigned a probability to each risk, prepared mitigation strategies, listed the triggering events, and – very important – scheduled a time for a project review.

Unlike many fixed fee engagements that attempt to define all possible opt-out circumstances, the risks identified in our agreement did not kick certain problematic leases out of the fixed fee arrangement into an hourly rate. Instead, we used our Risk Chart to create solutions that would preserve the alternative fee.

Hey, It Worked

Our mitigation strategies successfully controlled the potential time-consuming leases. For example, I reviewed my company’s position regarding building allowance and escalation-of-rent clauses – risks highly likely to occur – and we jointly created a term sheet to address these issues at the LOI stage. It proved more effective to discuss these potential problems in advance than it would have been to undertake damage control down the line. That same term sheet also protected both sides by reducing the number of turns of the document by stating my company’s position early in discussions.

We also agreed that there were some risks that were statistically unlikely (e.g., completely onerous lease terms), but that would have a very high impact if they did occur. We applied the same mitigation strategies to these low-probability-high-impact events, agreeing that if our strategies proved unsuccessful, I would agree to review and adjust the fee engagement.

Responsibility Trumps Accountability

The attitude of outside counsel has a pronounced effect on whether negotiations like this produce win-win outcomes. I asked Pam to allow me to praise Porter Wright, Morris & Arthur by name, because they took such a constructive and responsible approach to this engagement.

Pasi Salhberg said it well: “Accountability is something that is left when responsibility has been subtracted.” Responsible firms foster client trust by helping to flesh out assumptions and risks at the outset, rather than by dodging thorny discussions early on and neglecting potential problems until they leap up to destroy budgets, trigger finger-pointing, and erode client-outside counsel relationships. At the outset of your next engagement, I urge you to collaborate with outside counsel on a Risk Chart. As Pam has often been heard to say, “Front-end planning beats damage control, any day.”

Are You Prepared to Kick Butt?

By Pam Woldow on January 18th, 2012 Posted in General Counsel, Law firm practices, Legal Spend, Outside Counsel

This song goes out to all you General Counsel and senior in-house lawyers, and its title is “Sometimes You Folks Get Hosed and Don’t Do Nothin’ About It.”

I could just as easily have directed the song to those law firm lawyers who sometimes are a little, ah, “casual” about the finer points of scoping work, and called it, “Now You Know Where All the Lawyer Shark Jokes Come From.”

But today I’m jabbing at the in-house people, and in a moment, I will tell you why. First let me relate several true-life (if disguised) anecdotes, all of which were reported to me in the last two weeks:

“Do That To Me One More Time”

1) A Deputy General Counsel received an itemized invoice that included a huge hunk of billing time for work the DGC had not requested. He calls the relationship partner to contest the bill, calmly saying he has no intention of paying for work that was outside the agreed scope of the engagement. Ten days later he receives another invoice, this one for the time the lawyer spent on the phone call contesting the bill. The DGC emails the same lawyer back and says that now he’s “really distressed,” that he certainly is not going to pay for a phone call relating to his original overbilling complaint, and that he’d better not receive another invoice for reading this email. “Let this be an end to it,” he closes.

“You Dropped A Bomb On Me”

2) A large firm has enjoyed a long retainer relationship with a publicly-held client, and the relationship partner also sits on the client’s board. Over the years, this account has been churned unmercifully, but payment of the firm’s bills has consistently been rubber-stamped. Out of the blue, the GC receives a lengthy memo on a highly-sensitive topic (together with a bill for this “service”). The distressed GC lights up the phone lines to the relationship partner: “Not only did I not request this memo, I specifically did not want a memo on this topic. You have now created a document that I intentionally did not want. Don’t ever do this to me again,” he says.

“Take The Money And Run”

3) A major client complains about a huge litigation case that already has produced a 100% cost overrun, now in the millions, with the meter still spinning madly. He notes this firm has a history of significant overruns. He asks the firm to “look into it.” The firm dispatches its internal legal project management (LPM) guru to conduct an emergency process audit at the office handling this engagement. The LPM guru finds, among other things, a group of partners sitting around a conference table manually date-sorting documents produced in discovery. Not an associate or paralegal in sight. This is, the LPM guru exclaims with relief, a task that can be done swiftly and efficiently with software the firm already has. The office managing partner orders the guru to leave immediately, saying, “We don’t need you. This is how we make money!”

“My Own Worst Enemy”

In these situations, the GCs failed – evidently over a period of time – to impose appropriate accountability on outside counsel. And these events warranted more vociferous reactions, clearer measures and sterner sanctions. Situations like this demand more than a mild expression of distress or gentle slap on the wrist.

“New Attitude”

We all know that the Great Financial Crisis has shifted the balance of power in the legal profession. In today’s “New Normal,” law firms no longer control the rules (and costs) of engagement, as in decades past. Economic circumstances have provided clients with the leverage to demand greater accountability from their outside counsel. In many cases, as in the three anecdotes above, GCs have every reason to know that their outside counsel are playing fast and loose with them, but they often are reluctant to wield their authority.

In our experience, most GC’s do not like being put into the role of ethical police or hard-assed enforcers; their conflict aversion is legendary. But these three anecdotes should send a message to GCs, CFOs and CEOs: Complaints don’t fix problems. Consequences fix problems.

In short, GCs need to learn from their corporate counterparts that in tough times, you gotta be tough enough to kick butt and take names. In the New Normal, accountability absolutely is the name of the game.

Putting Some Pepper Into Legal Project Management?

By Pam Woldow on January 12th, 2012 Posted in Intersection, Law firm practices, Legal Project Management, Legal Spend, Outside Counsel

It is not uncommon for law firms being pressed by clients for more accurate budgeting and better budget management to raise the “unpredictability defense.”

Whether in litigation or transactional matters, the unpredictability defense asserts that it is nearly impossible to precisely plan and completely control legal spend because legal matters are subject to such a plethora of unforeseeable variables, risks and unexpected events.

**“But Law is Different“**

“Law is unique,” they’ll argue. “It isn’t like manufacturing identical widgets where all the performance factors can be predicted, measured and controlled. Lawyers must continuously navigate shifting sands and stormed-tossed waters.” One particularly erudite apologist for a huge budget overrun quoted German Field Marshall Helmut von Moltke’s famous claim that “No battle plan survives contact with the enemy.”

While there are outer limits to foreseeability, scoping and planning legal matters are not quite the game of blind man’s bluff many law firms make them out to be. And I’m not convinced that lawyers are more hamstrung in anticipating and accommodating unforeseen events than their business executive counterparts.

Business as Usual: Unusual

Accordingly, I was struck by Lauren Weber’s recent Wall Street Journal article chronicling McCormick Spices’ foresight, flexibility and willingness to adjust its business model when challenged by untoward circumstances. One of the world’s largest providers of spices, McCormick has been lashed by a perfect storm of unexpected events:

Rapid price inflation for core commodities like cinnamon and pepper (the price of which has quadrupled)
Catastrophic weather conditions in primary supply areas
Political unrest in the equatorial regions where it sources most of its raw ingredients (including Egypt, where McCormick gets a lot of its exotic herbs)
Dramatically reduced sales to restaurants as more recession-lashed Americans eat at home
Drop-off of high-end spices as household cooks returned to using taco mix and spaghetti seasoning in simpler dishes.

If McCormick Was a Law Firm …

If McCormick was a law firm, it would be time to bunker, hunker and wait out the storm, right? Wrong. Under CEO Alan Wilson, McCormick has explored alternative sourcing, expanded into new markets, shifted focus to home cooks from industrial markets, made some off-beat acquisitions (e.g., Polish seasonings and basmati rice), and also commenced a $150 million four year cost reduction initiative. The result has been solid revenue growth (Q3 2011 revenue $920M, compared with Q3 2010 revenue of $795M) and stable profitability even during the GFC (Global Financial Crisis).

If McCormick was a law firm, it would be repricing its products constantly (always upward, of course), and your pepper would bear a different price tag at the supermarket every time you shopped. Fortunately, McCormick has done what forward-thinking businesses do: in this case, creating Plan B and Plan C for its spice supplies if Plan A is frustrated, perhaps by floods in Thailand, for example. It’s response to “unexpected events” and “unforeseeable risks” has been to examine every aspect of its operating envelope, rather than employing reactive “magic bullet” tactical gambits.

Kudos to the Good Guys

Lest I overgeneralize about law firms’ project planning inertia, let me say there are some exceptional firms whose approach to implementing Legal Project Management recognizes that few “risks” are utterly unprecedented and that few legal engagements are truly as unique as those handling them claim they are.

“Anything that has ever happened before is foreseeable,” one partner commented, “and increasingly, clients are holding us accountable for foreseeing the foreseeable. We need to be more proactive about anticipating possible unpleasant surprises, rather than making excuses after we are ‘blind-sided.’”

The foundation for coping successfully with risks and reversals can be laid effectively using forward-thinking during project planning. In gearing up for a bet-the-company case, for example, one firm scheduled a brainstorming session in which the project team was challenged to identify any and all forces and factors that could possibly derail their sophisticated litigation strategy. The team then was asked to sort and prioritize each item according to two distinctly different questions:

1) How likely is this event?

2) What will its impact be if it happens?

They came up with about 47 items, some of them wildly unlikely but hideous to contemplate, others more likely but less consequential.

Unanticipated Events Matrix

This “unanticipated events matrix” then was used to build an adaptable project plan and decision tree that distinguished probability from gravity. In so doing, the team converted possible unexpected events into uncontrollable-but-foreseeable events which could be assigned budgetary consequences for planning purposes.

In a sense, this exercise made them like McCormick – impacted by events but not surprised by events, and therefore not overtaken by events.

Dialing for Pizza: Practical Perspectives on Scoping Legal Projects

By Pam Woldow on January 5th, 2012 Posted in General Counsel, Law firm practices, Legal Project Management, Outside Counsel

Legal Project Management (LPM) assigns extraordinary importance to providing legal services that deliver value as perceived by the client. Yet over and again we observe that while in-house counsel tend to view legal matters in terms of broad business issues and the pressures of “commerciality,” law firm lawyers tend to focus on identifying narrow legal issues upon which they can focus their formidable expertise.

Accordingly, a constant challenge in our LPM training workshops is to design exercises and case studies that give participants hands-on experience with LPM processes without indulging lawyers’ insatiable drive to dive into practicing law on any set of facts they’re provided.

The Pepperoni Imperative

Recently, one of our exercises produced an important “teachable moment” about attitudes, assumptions and instructions.

Taking an innovative approach to combining LPM training with client face time, a global law firm invited top-ranking members of a major client’s legal department to join their LPM workshop. When the time came for a practical exercise to demonstrate the importance of breaking matters into distinct phases and tasks when scoping an engagement, we divided the participants into several teams and told them they had 10 minutes to list on sticky notes all of the component tasks needed to “order in pizza.”

The Total Delegation Solution

At debrief time, one team made up entirely of law firm lawyers produced a single sticky note: “Call Greg.” Convulsed with laughter, they said that this total delegation of all phases and tasks to one performer was justified because “Greg is the pizza man. He loves pizza, he’s happy to be the ‘go-to’ pizza guy, he knows what we all like, he knows who makes the best pizza, and he has negotiated special volume rates. It’s easiest to give the whole responsibility to him.”

When asked what would happen if Greg were absent on pizza day or tragically was hit by a truck, the team leader responded, “We would just have to do without pizza. Greg is our pizza silo.”

Same Words, Different Music

Team 2, also comprised solely of law firm lawyers, approached their assignment diligently and seriously. They broke the task into four phases – needs assessment, logistics, budgeting and vendor analysis – and then detailed a series of 12 tasks. These included designating a pizza-order team leader, inventorying the pizza-eaters’ preferences, agreeing on the pizza budget, collecting funds, identifying the vendor with the fastest delivery, and finally delegating to one lawyer the responsibility for making the call to order the pizza. Their sticky note stream stopped with that phone call. This team was clearly quite proud of its efforts

Team 3, a group of in-house lawyers, generated 32 phase and task code sticky notes. These included the same general ordering sequence as Team 2, but also included such additional items as taking beverage orders, agreeing on the brand of beer to buy, rounding up napkins and plastic forks, reserving a conference room, seeing what was on TV during the pizza-eating period, actually eating the pizza, and, after the meal, asking group members which pizza flavor they had enjoyed most.

Team 2’s leader howled in indignation when we praised Team 3’s logic, thoroughness, and practicality. “Wait a minute! Your instructions only talked about ordering pizza. That’s all we were told to do.”

Team 3’s project leader scoffed at this narrow interpretation. “What’s the point of just ordering pizza? Obviously, this project was about having a meal – that was the objective. Don’t you think you sort of missed the big picture? Your approach runs up a big pizza bill and doesn’t get anybody fed.”

A Common Tension: Precision vs. Practicality

In subsequent discussion, neither team was willing to concede the point. When it came to scoping the project, Team 2 focused on precision, Team 3 focused on practicality. The exercise had revealed a fundamental difference in what “ordering a pizza” meant to each group, and provided a perfect teachable moment about making sure everyone is truly using the same words to describe the same thing.

What the Teachable Moment Taught

The point here is not just that in-house lawyers’ roles require them to focus on the forest, whereas law firm lawyers tend to labor among the trees. The lesson from the pizza exercise is that in the formative objective-setting and scoping stage of any engagement, all stakeholders – law firm and client alike – must work harder to clarify what is expected, and this means that everyone must scrupulously avoid making assumptions about what is intended and what is needed by the client.

Mallesons is Making Efficiency a Law Firm Issue.

By Pam Woldow on October 28th, 2011 Posted in Law firm practices, Legal Spend, Outside Counsel

To paraphrase Mark Twain, everyone complains about the weather, but few are doing anything about it. A notable exception is premier Australian firm Mallesons. The firm not only has responded to the client-driven need for enhanced value and efficiency in legal service delivery, but has recognized that lawyers’ time is much better spent doing things that require legal skill and judgment than on process-driven, repetitive tasks. To showcase the spread of enlightened thinking in global legal markets, I asked Mallesons to join us for a guest post.

GUEST POST by Michelle Mahoney, Director of Applied Legal Technology at Mallesons.

Although Legal Process Outsourcing (LPO) has rapidly been gaining traction in Europe and the US in recent years and is much on the minds of in-house legal departments, Mallesons is the first Australian firm to offer our clients a cost-effective, large-scale LPO capability. Mallesons recently announced that it has entered into a preferred supplier agreement with Integreon for LPO support services.

The depth and breadth of our research into the burgeoning LPO industry suggested how we might best deliver optimal services for our clients, and we believe our Integreon relationship will allow us to offer our clients a more cost-effective allocation of their legal spend, as well as the opportunity to realize significant efficiencies in the legal process aspects of our business, particularly in the area of document review.

Adopting an outsourcing model for some types of legal work will allow Mallesons to provide our leading advisory services, and at the same time give to our clients a choice in how they manage their legal service costs. Our LPO provider, Integreon is able to seamlessly scale up and down to meet the needs of clients, and their Six Sigma project management methodologies and processes contribute to producing quality outcomes for our clients. With this multiple-shore LPO provider, we are able to create teams built on skills, location, industry experience and languages to meet our clients’ needs.

This relationship is but one component in Mallesons’ determination to drive greater efficiency into all aspects of our legal practice, and it is a tangible way to ensure that our clients benefit from our investment in the future of legal service delivery.

This strategy also represents an investment in our own people. When Integreon’s services are used, our lawyers will be freed up to focus on delivering top-quality substantive legal service, which obviously enhances their professional development. For less document-intensive matters, we anticipate that junior lawyers will continue to provide traditional discovery and due diligence services. These skills will continue to be developed and used by our lawyers and their skills in project managing and concentrating their focus on the substantive issues which deliver results. In addition, our commercial and analytical skills will be honed, with our large document collections being separated to ensure the highly relevant documents will be the ones we spend the most time on.

10 Key Questions That Law Firms Should Ask Clients

By Pam Woldow on October 24th, 2011 Posted in General Counsel, Law firm practices, Outside Counsel

1. Are there any formal methods that you use to measure the quality of legal services?

2. If yes, what are those methods (and metrics) and are you willing to share those with us so that we can strive to continually improve our service to you?

3. If no, can we set up some metrics that will demonstrate over the coming year that our quality is superior to other firms?

4. How satisfied are you with the relationship with our law firm?

Do we understand your goals in the matters that we handle?
Are you satisfied with our responsiveness?
Are you satisfied with the results we have achieved?
Are you satisfied with our cost effectiveness and efficiency?
Are you satisfied with our expertise?

5. What could we do to get more of your work?

6. How can we get a better day-to-day understanding of what’s going on in your business?

7. How can we get involved earlier in problem prevention and get paid for success rather than time spent?

8. Are you interested in additional services, “value add” services, that we could provide to your in-house legal department?

9. This is the data we gather about how we run our law firm. What do you think?

10. Are you considering any changes in which firms you use or how work is to be allocated going forward?

More Eureka Moments in Legal Project Management

By Pam Woldow on October 17th, 2011 Posted in General Counsel, Law firm practices, Legal Project Management, Legal Project Management tools, Midsize firms, Outside Counsel

Welcome to the new site for At the Intersection. We are settling in to our new address and relationship with Lexblog, and are delighted to commence the kickoff with a GUEST POST.

Proving that great minds and great firms think alike, I’m pleased to share a guest post contributed by Sheri Palomaki, Director of Practice Management at Sutherland Asbill & Brennan, a 425 lawyer firm with 6 offices in the US.

Pam was absolutely right when she used the word ‘Eureka’ in her September 26 post to describe the feeling she had when talking to ‘Lex,’ a large-firm transactional practice group leader, about the varied virtues of legal project management (LPM). I’ve had the same feeling as we continue our own LPM implementation at Sutherland. Those of us who work daily with lawyers can testify that ‘Eureka’ moments are few and far between. But they seem to be recurring a lot since we started our LPM initiative. Perhaps our ‘Eureka’ insights echo those experienced by others similarly situated, but I think they are worth sharing.

Eureka Insight #1: Every lawyer, every matter, every practice can benefit from legal project management. When we began implementing legal project management training at Sutherland, I heard plenty of dismissive comments: I already do project management. Or, that ‘stuff’ does not apply to my practice. Or, the legal work I do is too complex to use project management. I love that last comment: How can we tell our clients, who are building renewable energy projects or drilling for oil in 4,500 feet of water, that our work is too complex to prepare a scope of legal work and a budget? Our phases and tasks surely are no more complex than theirs!

The most effective way I have found to address this kind of resistance is to host a training session with team members who work together and ask them some pointed questions. How do you scope projects with your clients? Do you put the scope in writing? How do you address scope creep? What are your best practices for developing a budget and sharing it with your client? How do you manage all the tasks in the matter? Have you ever exceeded your budget? If so, what happened, and how did you ensure it would not happen again? The answers – or lack thereof –usually enlighten everyone in the room.

Eureka Insight #2: Your clients likely have an opinion about your legal project management skills – and it may not be charitable. At a client feedback interview in July, I met with a general counsel from one our firm’s top clients to ask how satisfied he was with our legal services. He was effusive in his praise for the lawyers who work on his matters: They understand my business. They understand my company. They understand me. I could not be happier with the lawyers at Sutherland. After an hour of listening to his praise, I asked if he had any suggestions for improvement. His response: Well, there was this one time when we (nice of him to take responsibility) did a poor job of managing the scope and budget of a certain matter. The next time, we would like to work with the team to better communicate and track who is doing what, how long it will take and how much it will cost.

Our next step was obvious: we arranged joint LPM training with the client’s internal team and all the lawyers at Sutherland who provide services to that client. The training session was 90 minutes of intense but cordial discussion about how we can work together better. And our lawyers heard. They heard how we can scope projects together (our lawyers heard the client say that he prefers the initial scope in writing), how we track budgets (our lawyers heard the client say that he likes extra communication around the status of the budget), and best practices for conducting post project reviews (our lawyers heard the client say that we need to take the initiative to ensure that post project reviews are done after EVERY matter). My “Eureka” moment? I already knew these things, and our lawyers had been taught all these things… but they only really heard it when the client voiced them.

Eureka Insight #3: Training our clients and our lawyers together in legal project management has been an amazing client service tool. Consistent with the lessons learned from the client meeting described above, Sutherland lawyers are now armed with a list of best practices to use when serving the legal needs of this particular client. This is a list of best practices that the other law firms who work with this client do not have (at least not yet), a list of best practices that were developed from our joint 90-minute discussion. Not incidentally, that session ended with the client saying: Now let’s talk about the matters I will be sending to you next month…(I’m not exaggerating for impact here; new business is on the way).

These Eureka moments are teaching us powerful, positive messages. Bring more, please.

Call Me INDISPENSABLE

By Pam Woldow on October 4th, 2011 Posted in Law firm practices, Legal Project Management, Legal Project Management tools

(Part 5 of 5, LPM in Transactional Practices)

This is the last in our series of posts about conversations with Lex, who heads a large New York law firm’s transactional practice and is an avid supporter of using Legal Project Management (LPM) to plan, manage and assure consistent quality in the deals he leads.

An Unexpected Second Career
In addition to being the architect and chief honcho for bewilderingly complex transactions, Lex tells me that he recently realized he had, by default, taken on another vital role: Keeper of Client Institutional Memory.

“I do most of my biggest deals for a single client, and I have been their go-to deal lawyer for over 24 years. No one I presently interact with has been at the company longer than six years.

“I must say that our deals tend to go off smoothly and efficiently – no dropped balls, no do-overs or reinventing the wheel, no failures to communicate. On my own, over the years I have kept a detailed database of every deal we’ve ever done together – dates, players, terms, results. When the client asks about something in the past, I’ve got answers at my fingertips.

Lawyer As Institutional Memory
“I get high points from the client for this, but I don’t think their folks really appreciate how this happens. They must think it’s magic, or luck or the rewards deserved by virtuous souls. You know what it really is? It’s the long view. It’s years of experience, of fine-tuning, of dealing with every conceivable eventuality. And it’s maintaining all that knowledge in an organized, accessible way. After all these years, I know more about the client than anyone at the client knows.”

Think about that. If you start talking about ‘longitudinal knowledge’ or ‘continuity,’ Lex, like many lawyers, is indispensable because he is the only ones who has been involved in the continuous process for more than a few years. Over and above deal-making skills, with Lex’s collective knowledge, he is the client’s deal library and institutional memory. He is not even an employee, but only he can recapture past events. He is really indispensable to his most important client.

Using Knowledge Management?
I asked Lex if he explicitly communicated this unique “Knowledge Management” role to the client, actively encouraged their new or younger lawyers to tap his experience, or discussed ways to translate his accumulated wisdom onto a platform client lawyers could access freely. “Not really,” he admitted. “If I get hit by a truck, they’re pretty much back to square one.”

LPM in Action
Lawyers tend to scoff at “consultant-speak” phrases like post project review, knowledge management, and continuous improvement. But such phrases are accurate descriptions of what Lex has done for years:

1. After every transaction is completed, he reviews it, evaluates what went well, analyzes what could have been done better.

2. He translates these one-by-one reviews into a collective, organized body not just of information, but learned wisdom, of knowledge.

3. He applies that knowledge to assuring quality, improving efficiency and avoiding pitfalls, and developing new methods and approaches.

What we have here really is LPM in action – not just a gathering of information, but robust analysis and doing something smart with it! With over a quarter-century of experience, I ask Lex if he is as good as he’s ever going to get. “No,” he laughs. “I’m often surprised by the new perspectives I get by going over past deals. No doubt about it, I’m a lifelong learner. That’s what makes it fun.”

The Random Lunatic — Always an Unhappy Surprise

By Pam Woldow on September 26th, 2011 Posted in Law firm practices, Legal Project Management

(Part 4 of 5, LPM in Transactional Practices)

EUREKA!
Ever had that experience when someone coins a phrase that perfectly describes something you could never find the word to describe? It happened recently during a fascinating conversation with “Lex,” head of a large law firm’s transactional corporate practice and an advocate for applying Legal Project Management (LPM) methods to deals and deal lawyers.

The Problem is People
We were speaking about LPM scoping and planning and about the importance of identifying uncertainties, potential problems, risks and changes before they occur. “Yes, but when people think of all the things that might impact or derail a transaction,” Lex said, “they always think about things that might happen – new legislation, economic events, regulatory roadblocks, etc. There’s one factor that always comes up that no one ever talks about: the random lunatic.”

Lex was absolutely right: I realized instantly that I’d never been involved with an important case, transaction, negotiation, consulting engagement, workshop or even friendly collaboration that didn’t require a “workaround,” that is, some extraordinary effort to cope with a wild-card, loose cannon, know-it-all, know-nothing, saboteur, incompetent, dull-normal, tyrant, or other species of jerk.

Jerks & Clowns
Lex and I agreed that the worst kinds of random lunatics are those who behave like spontaneous and inconsistent forces of nature: volatile, impulsive, indecisive or mercurial on one hand, or devious, obstructive, hypocritical or implacably stubborn on the other. They can be adversaries who don’t play by the rules, grandstanders who try to hog the limelight, judges that don’t get it, or even your own firm’s subject-matter experts whose expertise you need but who blow your budget or annihilate your timetable.

“The random lunatics I often run into,” said Lex, “are the people who pay the money. They may not have skin in the game, but they control the purse-strings. They’ll deny that they are trying to give you a hard time, but then they lay some off-the-wall demand on you – often on a matter of form and not of substance.”

Lex and I agreed that random lunatics can lack both self-awareness and context awareness: they may not understand the effect they have on people, are tone-deaf politically, or simply don’t care who they offend. “It’s really not hard to trip them up or show them up,” Lex said, “but what’s the point? If I react, they just act more outrageously. So part of my plan is to ask this question: Must I really rely on them for anything? If the answer is no, I disengage, firmly, politely if I can…but fast.

Lunatic Workarounds
But, if the answer is yes, I pause to consider what need is driving their behavior, what gain they’re trying to get out of this situation. If I can step back and get a handle on that, I find I may be able to respond to their need, rather than reacting to their behavior. After all, my job is to get the deal done, not make new friends. It’s a little like Jiu Jitsu – rather than confronting or fighting, I leverage their own energy to take them where I want them to go.”

The key to minimizing the impact of random lunatics is superior planning. We may not be able to eliminate the “lunatic quotient” from our legal projects, but we can use LPM approaches to diminish the surprise and control the damage whenever and however it appears.

Communicating With “The Client” – Lessons From Lex

By Pam Woldow on September 20th, 2011 Posted in General Counsel, Law firm practices, Legal Project Management, Outside Counsel

By Pam Woldow & Douglas Richardson

(Part 3 of 5, LPM in Transactional Practices)

Welcome Back, Lex
In the last several posts, we’ve been telling you about Lex, the head of a national firm’s transactional practice group, and his staunch support for the application of Legal Project Management (LPM) principles and practices to transactional work.

The Plan, Boss, The Plan!
Lex agreed enthusiastically when we stated that LPM is as much about having a detailed communication plan as it is about developing useful processes, methods, tools and metrics.

“Communication among lawyers is never simple,” Lex said. “And in our complex deals, it gets incredibly complicated. We often say ‘we’ll need to talk to the client about that’ as if that really explains who needs to talk to whom about what, and when. Well, that’s not how real life works.”

A Real Tower of Babel
Lex, who is based in New York, then provided this example:

“I received a call from a partner (and valued referral source) with a London firm, let’s call him Basil, who wanted our firm to handle the US aspects of a complicated and time-sensitive multinational transaction for his prize client, the General Counsel — let’s call him Gerhard — of a huge German-based multinational. You should know that Basil is both very averse to conflict – he hates giving bad news – and is very protective of his relationship with Gerhard. He says Gerhard hates to be bothered with ‘a lot of incidental trivia’ and has a habit of not reading his emails. Basil says three partners and three associates in his firm will be working on the European aspects of the transaction.

“I’m to lead the US deal team, and Basil says he wants communication with him to come through me. As the deal progresses, Basil also wants all communication with the Germans to go through him. Our deal responsibilities will require me to enlist our firm’s subject-matter experts in tax, ERISA, securities law, labor and employment, and environmental law. These experts are partners, accustomed to direct client contact. We’ll also have several associates and paralegals working on due diligence, documentation, etc.

Need to Know
“When our team met to create a project plan and to diagram a practical ‘communication matrix,’ you can imagine some of the questions my team raised:

- Will there be a project plan that integrates the efforts of our firm, Basil’s firm and Gerhard’s legal staff? Who will create and manage that plan?

- Does Basil really mean that all communications with Gerhard must be funneled through him? Won’t that be a huge bottleneck?

- Can/should our subject-matter experts talk directly with their counterparts in Basil’s firm? How about with counsel on Gerhard’s legal staff regarding technical questions, due diligence questions, documentation, etc.?

- What will be the protocol if our experts need to talk to executives and managers in Gerhard’s corporation? Must these conversations be routed through you to Basil, and then to Basil’s specialists, and then to the client? How do we assure that nothing is lost in this ‘whisper down the lane’ approach?

- What do we do if/when there is some “bad news” that needs to be delivered to the client since we know that Basil can’t bear to tell Gerhard anything displeasing?

- What type of communication should everyone use? How will we track all the communication among the various stakeholders? How will we keep everybody in the loop?

- What is the relative decision-making authority of partners at our firm and those at Basil’s?

- What should we do if problems come up or delays occur?

“In every part of this Tower of Babel, someone had better know who has the power to communicate – or, in our case, to negotiate — who should talk with whom and who should never talk with whom, who drives the communication and who keeps track of all the communication. And you need to know more than the formal communication pathways – you also have to be aware of the styles and personalities of crucial players. Any lapses or any slip-ups can be really costly, either messing up a deal or impairing a client relationship” says Lex.

Who IS the Client?
We, too, are astonished at how imprecisely lawyers at firms talk about ‘the client.’ The client can be a company, a CEO, a business group head, a general counsel, AGC or in-house staff attorney. As in Lex’s transaction, the “client” may have surrogates in other firms.

The advantage of LPM is that it provides a framework for thinking about and planning communication before everyone dives in to the legal work. The very act of planning reminds everyone that communication pathways are important and must be carefully considered. We have helped map communication plans that include over 40 stakeholders at a firm, in its client’s legal department and business/management ranks, its vendors, and its external constituents – courts, other counsel, vendors, experts, etc. And those plans turn out to be relationship-preservers in every deal.

Whenever there are lots of moving parts, it is folly to think that communication will happen by default or that stakeholders can operate on an ad hoc or need-to-know basis. The better those interactions are planned and agreed upon at the front-end of any engagement, the better. Yes, this takes time – maybe even unbillable time. But as Louis Pasteur reminds us, “fortune favors the prepared mind.”