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Scope-Blindness: Confusing Trees with Forests

Posted in Legal Project Management

tree forest resized (1)

As one of its core principles, Legal Project Management (LPM) emphasizes the need for effective project scoping as a crucial first step for delivering legal services efficiently, predictably, on time and on budget.

Our motto: Effective front-end planning beats damage control any day. Most experienced lawyers tell us they scope engagements quite well. In our experience, many of them don’t.

Hands-on, Perspective Off

In LPM training, for example, we always do a hands-on scoping exercise, a role play using a realistic case hypothetical. Every participant gets the opportunity to propound constructive engagement framing questions to a “General Counsel” we have previously coached and provided a crib sheet describing a variety of germane facts and factors — some legal, some not.

The idea is not just to stick this fact scenario into some traditional category of legal service, but to draw out the strategic and tactical questions that:

  •  Flesh out the client’s business strategy and the interests (and stakeholders) impacted by this matter.
  • Define the stakes and risks in this situation, including whether it is unique and novel or a “commoditized” piece of work similar to prior engagements.
  • Clarify the client’s specific goals, needs and priorities in this matter.

In other words, the exercise emphasizes the importance of developing a big picture business perspective before diving in to legalistic minutiae. In workshop after workshop, however, the lawyers do what lawyers always do: they immediately start practicing law. Ignoring the fact that the LPM workshop is process training, they fly by the big framing questions – even many of the questions most important to the client – and dive headlong into a thicket of the case study’s legal details. After the participants have exhausted their scoping questions, we ask our shill General Counsel, “Is there anything these lawyers should have asked but didn’t ask?” The answer is invariably yes, the scoping efforts had left important facts undiscovered and fundamental questions unasked and unanswered.

Good at Trees, Bad at Forest

 Even when shown a rigorous method for eliciting deeper and better information about their clients’ needs and perspectives, many experienced lawyers retain significant blind spots about their scoping skills. Despite getting a clear signal from “the client” that the scopers dropped the ball, when at the end of the exercise we ask the participants to grade themselves on the quality of their scoping, they tend to give themselves uniformly high marks. In fact, they often suggest that they would like the LPM workshop to move on to more “substantive topics,” because, well, they already know how to talk to clients about new matters.

In this exercise, as well as in numerous scoping discussions we have facilitated in real life, undeniably brilliant lawyers often fail to address critical business issues and thus can neither articulate a rigorous engagement action plan nor outline realistic pricing parameters. This leaves client in the dark. It also leave the lawyers to their most beloved modus operandi: punch that ol’ billing clock, dive in, focus on the details, practice law, and see where fate and momentum take things.

Clients remain astonished by how haphazardly lawyers inquire about which “critical success factors” matter to their them and by how deaf they often are to clients’ answers. Instead, they make untested assumptions, they talk before they listen, they interrupt constantly, and they focus resolutely on The Small Picture.

Yeah, I’m Unhappy

 Subpar scoping is cited frequently by clients in what might well be described as “client dissatisfaction surveys.” Here are some real-life comments:

  •  “The firm just did not understand our goals, timeframes or budget constraints.”
  • “They kept pitching what they wanted to do, not what we needed.”
  • “We are demanding that huge amounts of time be written off because the firm spent too much time on routine matters, used the wrong level of timekeepers, constantly reinvented the wheel, and performed a lot of unnecessary activity.”
  • “All too often, outside counsel both treat unique cases as if they are routine and routine cases as if they are unique.”
  • “Poor scoping leads to scope creep. It’s not our fault if project scope is not spelled out in detail in the first place, but we are expected to pay the bill without complaint.”
  • “Law firm lawyers have been trained to, and rewarded for, looking at the trees. They should spend more time showing us that they can see the forest.”

 

© 2015, Edge International US, LLC. All rights reserved. No part of this article may be copied or reproduced without prior written approval.

The Human Barrier to LPM Technology: Will Lawyers Get to the Future?

Posted in Legal Project Management, Legal Project Management tools

iStock_000047970864Medium (2)

We have just returned from the World Masters of Law Firm Management Conference in Sydney, Australia, where we had the opportunity to compare notes with a lot of folks deeply invested — literally and figuratively – in the future of legal technology. By and large, we agree that when it comes to Legal Project Management (LPM), the platforms, tools, templates and technology are evolving at the speed of…frustration.

Law firm and law department IT heads and CTOs (Chief Technology Officers) are pained to admit this, but somewhere out back behind every one of their workshops is a pile of magnificent junk – prototypes of self-populating dashboards, first generation automated Gantt charts, comprehensive budget and pricing tools, automated process flow chart generators and even entire LPM suites that are elegant, efficient, elaborate, and exhaustive. Yet they have either been consigned to oblivion or doomed to chronic non-use.

Golly, That Sounds Swell!

Some of these “failures” are awe-inspiring in their capability and complexity: they see all, do all, tell all. When demonstrated to a receptive executive committee by an IT-savvy stunt pilot, they can awe the audience with their acrobatics, sophistication, versatility, comprehensive metrics, and ability to support efficient legal services. The sales pitches are compelling: once implemented throughout the firm, these tools can reshape – even revolutionize — the way lawyers, at all levels and in all disciplines, practice law day to day. These systems will pay for themselves in increased productivity and efficiency in no time!

Only frequently they won’t. Because the people who are supposed to use them…won’t. The record is clear and discouraging: many of the lawyers who need to use these tools – adopt them, learn them, and master them…simply won’t. They may attend the mandated training sessions, tolerate the installation of the new software on their computers and smart phones, even pay lip service to the need for better tools for logging their hours, prioritizing their tasks, managing their work, and sharing crucial information with colleagues. But then they avoid using these super-tools as if touching their firms’ new technologies exposes them to the Ebola virus.

Where Did We Go Wrong?

This resistance occurs not because the current generation of tools and software is too simple, accomplishes too little, or doesn’t work. On the contrary, many failed law firm technology launches (and yes, there have been a bunch of expensive disappointments) stem from the fact that the technology is too much. Like the deeply-troubled F-35 fighter prototype that is supposed to do everything (win dogfights, drop bombs, shoot recon photos, take off vertically, serve military branches that have distinctly different needs), much current legal technology is disdained by lawyers because it has too many bells and whistles, takes too long to learn and is seen as too hard to use. Their gripes focus on utility and usability.

Experts Rejecting Experts?

In one sense, this gulf between the firm’s lawyers and its IT people is ironic: in some ways lawyers and IT experts are similar animals, and one might expect more mutual respect from people whose roles are predicated on mastery of various types of subject-matter expertise and who all supposedly are concerned with optimizing the performance of the firm.

Actually, there may be a strain of the “not-invented-here” syndrome at play here. Many lawyers tell us that efforts to superimpose – indeed, to press-fit — work process software upon their professional wisdom and legal judgment is kind of insulting. “Those people don’t really understand what we do,” they say. “They want to digitize and commoditize and quantify everything.”

This tension between technologists and end-users might seem a little like a Dilbert cartoon if the stakes were not so high. The evolution of LPM and process improvement tools has developed due to the inexorable client-driven economic pressures. Management and IT committees that buy into expensive software “solutions” have valid and substantial concerns about what efficiency-enhancing measures are necessary to keep their firms competitive.

What Will It Take?

What will it take to get the firm’s practicing attorneys to get on board, adopt new technologies, and ultimately build them into their fabric of their legal work? The most common answer we hear is “greater user-friendliness.” But what does that really mean? What will that look like in real life? A flatter learning curve before one becomes proficient? Faster modes of either entering or extracting information? Technology that “speaks legal” rather than cascading menu IT-speak?

Several years ago we saw a demo of a first-generation self-populating dashboard that integrated information about the full spectrum of LPM variables: who the client was, what the matter was, what work had been scoped, the members of the project team (and their billing rates), prioritized phases and tasks, budget plans and budget-to-actual metrics, overall progress against plan. We thought it looked wonderful. Six months later we saw the dashboard’s architect, and he said that when beta-tested, the dashboard had been criticized as too complicated and too time-consuming to use. His second, far more simplified iteration also was vetoed by a panel of the firm’s practicing lawyers. As was the third another six months later.

Finally, he sought out the most sympathetic member of the technology review committee and asked, “what is it going to take to get these people to use this tool?” The man paused. “I could say that what’s needed is a simple point-and-click interface, but even that’s probably too much tech-speak. What our lawyers tell me is that the whole thing has to be really simple and really intuitive to use. One keystroke, maximum two. Anything more than that, and you’ve lost them.”

 

© 2015, Edge International US, LLC. All rights reserved. No part of this article may be copied or reproduced without prior written approval.

LPM for Associates: The View from Ground Level

Posted in Legal Project Management

We’ve all heard the time-worn joke that associates share with each other: We’re just like mushrooms — kept in the dark and buried in…fertilizer.

To reality-test whether today’s associates really see their work that way, we recently  conducted several Legal Project Management and collaboration skills training workshops targeted specifically to associates. This was a novel approach, because most LPM training focuses heavily on the roles and responsibilities of partner-level participants: client-relationship partners, project managers, practice group leaders, client team leaders, etc. By and large, we’ve found that associates attending mixed-level LPM skill-building tend to be pretty cautious and reserved, speaking only when spoken to and contributing only when cajoled to do so. We wanted to walk a mile in their shoes.

Different Folks, Different Strokes

In training with senior-level lawyers, we typically define LPM as:

A systematic approach for efficiently scoping, planning, managing and controlling legal work within agreed time, budget and mandatory performance requirements.

This entirely accurate but rather abstract definition doesn’t say anything about how things look to a living, breathing associate. For the people who actually perform much of the heavy lifting, a better LPM definition might be:

LPM is an approach to assigning me tasks, delegating responsibility to me, managing my work, giving me reliable feedback, and planning team communication,  that:

 a)    Connects me with the whole team and loops me into the whole engagement.

b)    Diminishes the differences among how various partners do things (and want me to do things).

c)    Provides me with a clear sense of what I’m supposed to do and when I’m supposed to do it.

d)    Helps me keep my work on time and on budget.

e)    Seeks my input about better ways of doing things, as well as identifying barriers, bottlenecks, and budget-busters.

Six Easy Pieces

The associate-specific workshops produced some solid learning moments, all relevant to project managers who are selecting teams, assigning tasks and supervising work done by more junior lawyers or performers. Here are six particularly notable insights:

  1.  360° Perspective: Associates resent the hub-and-spokes approach that characterizes so many partners’ management style – the one where the partner at the hub knows and controls everything and none of the team members sees the big picture, knows the overall project budget, or collaborates with all the other worker bees out there on the rim. Associates want the big picture, not just the micro view; they say they feel more involved in projects where the strategic objectives are explained and more committed to projects whose sweep and scope they understand,
  2.  Do It My Way: A corollary to the inefficient and non-communicative hub-and-spokes management style is the need for every partner to have things done in his or her own unique way.  In the workshops, associates reported frequent false starts, do-overs, write-downs and dressing-downs resulting from a lack of consistency in how their work is assigned, managed and measured.  They loved the uniformity (of even some of the basic steps) that LPM can offer.
  3. Basic LPM Education: Associates really liked LPM training that demonstrated the basic LPM building blocks [scoping, project planning, managing work, monitoring/measuring progress, and post project review], but that looked at these functions from the associates’ perspective. In the workshops, associates were taught that they were not just passive performers, but that they bear “contributory responsibility” for making sure they fully understand their assignments, are receiving objective and timely feedback, and can manage their own work effectively. In short, associates learned that they too have to communicate better and collaborate more.
  4. You’re Never Too Junior to Think About the Client: For many junior-level mushrooms and worker bees, the “client” is a distant abstraction.  Associates are taught that they are not responsible for understanding the client’s business, needs and priorities, that client relationships live out there in partner country. This perspective is profoundly misguided, and associates report a real hunger for information about all aspects of the law firm-client relationship.  Client-centric thinking is the wave of law’s future; it cannot be introduced too soon.
  5. Early Warning System: Similarly, as ground-level performers, associates are often the first to see early signs of scope creep, redundant assignments, work process inefficiencies, communication babel, performance bottlenecks, road blocks, or other budget-busters. Associates suggested that the main reason their uniquely pragmatic insights are not appreciated is because they are seldom sought: “We see things that more senior lawyers don’t see, but no one ever asks us — or wants to know — how things look from our end.”
  6. Proactive Perspective: The associates’ performance in the workshops showed that if given the opportunity, they are energetic, highly-motivated  can-do kids.  Unfettered by slavish adherence to traditional thinking, they are stimulated by change, innovate more readily than their elders, think more comfortably outside the box, and embrace rather than resist technology.  For them, law’s “New Normal” is a fascinating new challenge, rather than a mine field.

Let Me In, Coach

Motivational consultants often cite two basic axioms: 1) participation fosters engagement, and, conversely, that engagement fosters participation; and 2) motivation does indeed correlate with work quality.

Yet partners seldom ask associates for their perspectives and suggestions, defaulting to the “when-I-want-your-opinion-I’ll-give-it-to-you” style. Imagine, then, how gratified we were to receive the following email following one of the associates’ workshops:

As a younger associate, I thought the training today was great – an informative, helpful and in-depth overview of practice management that will help me for a long time to come. I especially enjoyed the overview of practice management from both the partners’ and clients’ perspectives. This will help me think of ways to add value to my case team, as well as during client development – for current clients and for my own business development down the line. Thanks for the engaging and thoughtful time!

 

© 2015, Edge International US, LLC. All rights reserved. No part of this article may be copied or reproduced without prior written approval.

The LPM Maturity Model: 5 Steps for Transforming into a Client Focused Business

Posted in Legal Project Management, Legal Project Management tools

In this guest post, we are pleased to have Keith Lipman, Esq., President and Founder of Prosperoware, share his practical insights about implementing Legal Project Management.

Unless you are deaf to the present realities in today’s legal marketplace, you now hear the persistent drumbeat of client-focused legal service delivery: a persistent rhythm driving you toward Legal Project Management (LPM). Clients are insisting that firms price and deliver services that fit their tolerance for risk, produce excellent results and keep the work within budget — all in the most efficient manner.

Maybe you’re ready to dance to the beat — you accept that LPM is critical to the future of your law firm — but you don’t know where to start or how far to go.

The challenge to adopting LPM and its first cousin, Legal Process Improvement (LPI) is further complicated by inherent differences among your firm’s practice areas.  Some will require a serious foray into LPM and LPI, others much less so. The depth of your immersion will depend on the amount of client pricing pressure being applied in each practice area.

Fee Pressure Territory

Why does pricing pressure exist for one practice group and not another? The reason has less to do with the type of service being delivered than with the client’s experience in purchasing a particular service. When clients buy the same kind of service over and again, they learn empirically how much a given matter should cost and how much effort (that is, billable time) it should take.

For example, for years, employment law practice and patent prosecution groups  have faced client pressure for lower fees. As that pressure continues to mount, these practice disciplines will be forced to adopt effective project management (i.e., LPM and LPI) principles.   The reason that employment and patent prosecution groups experience such pressure is that most clients have been purchasing the same services year after year, and they have become savvy shoppers.

Merger and acquisition (M&A) work has received less pressure across the industry.  However, there are some large technology companies that have been making 30 to 60 acquisitions per year.  These tech companies have gained tremendous experience purchasing M&A work and are applying significantly more pricing pressure than a client who makes an occasional acquisition.

A client who has less experience in purchasing a particular service may use RFPs to get competitive quotes (no different than getting multiple quotes to remodel a kitchen) or develop an historical database to get better pricing intelligence.

A Framework for Changing Gears

Making the transition to a state where a practice area consistently and effectively uses project management and process improvement is not something that happens overnight. It is simply too large of a cultural shift. Firms need to understand that lawyers need to make incremental steps to reach the ultimate full and complete LPM adopion.  The following LPM maturity model provides a framework to work with your individual practice group and help you to think through the transition.

Step 1: Budget & Monitor at the Matter Level

Understand Effort-to-Cost.  Do you really know what your work costs to perform? With the billing process traditionally occurring weeks after the work has been performed, there can be a huge disconnect between the effort and cost.  A timekeeper may have spent scores or even hundreds of hours on activity that adds no value to the matter and must be written off.  The effort of building even simple budgets and then monitoring “budget-to-actual” will help billing lawyers develop greater familiarity with costs and the effort required for certain work.  Constant monitoring also gives lawyers the opportunity to stop duplicative work or tasks that the client considers of little value.

Budget 101

For many lawyers, creating even a simple budget can be intimidating.  A useful starting place is with the amount the client is willing to pay for the matter.  The budget is then built by identifying the people or timekeeper classes who will work on the matter.  Based on these inputs, the number of hours can be calculated.  If a lawyer believes that too few hours have been allocated, he or she can:

  • Change the resources to cheaper ones ( e.g. 5th-year to 3rd-year associates) who can bill more hours to cover the same ground;
  • Make the decision that a certain number of hours need to be written off;
  • Discount the billing rate; or
  • Increase the amount of time to be spent on the task.

Another option is to build budget from the bottom up, using hours and resources.  This is a more daunting task for many.

Once a budget is established, the lawyers working on the matter should be sent at least weekly reports that indicate their progress against the budget.

Key Performance Indicators

With either approach, the goal is to get lawyers to quickly begin to look at matters through key performance indicators (KPIs).  The minimum set of KPIs at a matter level should focus on leverage (e.g. non-partner hours versus partner hours) and realization (achieved or target revenue ÷ hours at current rate).  Ideally, the lawyer managing an engagement should also look at matter profitability (cost per hour ÷ revenue per hour).  Matter profitability provides a more accurate representation of the profit achieved from a matter.  Looking only at realization can be very misleading.  In fact, a matter where the realization is low but the leverage is high will likely be quite profitable.

Step 2: Service Deliveries & Phase Development

Going Deeper for Monitoring and Pricing. This challenge of breaking down your processes into matter types and phases is the most important step in your LPM journey.  The goal is to have more granular budget and monitoring while enabling the firm to leverage past experience for pricing future matters. The two critical tasks are defining the services the firm delivers (mergers & acquisitions, etc.) and then defining the discrete phases that occur within each of these matter types.

Are Your Data Clean?

Developing clean data is the key to coming up with metrics that will guide your decisions moving forward, so it is important to get this part right. In describing its deliverables, the firm should look at using a couple of different fields to describe a matter.

The first is matter type (typically litigation, transaction, advisory, and regulatory). The second is area of law which describes the subject matter (employment, finance, etc.). The matter sub-type is the actual service delivery or what service is the client purchasing from the firms (employment discrimination litigation). The final field should be a tag field that describes the unique elements of the particular matter (age, sex, timely filing).  The advantage of this model is that you can start benchmarking shared phases between the matter types.

Step 3: Monitor & Identify Obvious Inefficiencies

Paying attention pays off. It is amazing what you find out when you really start looking at who is performing work on matters. From the “stupid stuff” or low-hanging fruit – is it really cost-effective to have a partner schedule that deposition instead of a secretary? – to the more complex issues that drive up the cost of a matter, simply tracking and monitoring will reveal a wealth of information.

What are some complex factors that can drive up the cost of a matter? Here’s just a couple:

  • Partner expansion – A partner is asked to handle a small item for a case and it gets expanded far beyond the scope originally contemplated,  a “creep” that often goes unnoticed until all the hours are entered and the matter is found to be over budget.
  • Bad delegation and failure to assign or explain a task properly – When a task is misunderstood and carried out incorrectly, it can lead to expensive re-work.

The process of budgeting and monitoring builds a learning loop that starts creating a linkage between the task and the effort.  Through the process of bringing the lawyers closer to the data, they will learn more about the true effort of the work, which positions them for the next step.

Step 4: Identify Common Tasks Across Matter Types & Build a Budget Using Tasks

Standardize your verbs. Across different types of matters we see a host of repetitive “verbs” or tasks. Regardless of the type of matter you’re working on, the process you follow to answer a complaint, for example, should always be the same. You follow the same steps when it is time to take a deposition.

Once you have identified the steps in the task, the next step is defining the base amount of work.  In the “take deposition” example, you would want to determine the base length of the deposition that you want to take (e.g. one-hour deposition testimony) and the increment (e.g. each additional hour of deposition).  In order to take a one-hour deposition, what would be the amount of time spent in preparing for it and who would be doing the work (e.g. 3rd year, 4th year, partner, etc.)? Once you have defined the base amount work, you need to determine how much more work would be required for the increment (each additional hour of deposition testimony).

Once you identify these common tasks, you can easily build a matter budget from the bottom up. The work of defining the tasks for different matter type and sub-types is an advanced task. The investment in developing these tasks can be significant.  However, the payoff is more effective budgets based on more detailed matter planning.  How fast a particular practice area embraces this approach will be depend a whole lot on pricing pressure: as a matter of human nature, more pressure = faster trip up the learning curve. Once this step has been taken, matters can be managed to a checklist.

 Step 5:  Manage Matters With Checklists

Build a Plan. Deliver to Plan. This is the sweet spot in your LPM process. You know what your work costs to perform. You have broken down the phases and tasks. You have weeded out the obvious inefficiencies and built templates that allow you to craft a matter budget in a snap.  The next step is to develop task templates to actually drive the work process.  The team will now work from a checklist of tasks and activities.  This presents full visibility of the expectation of time for a particular activity and drives rapid understanding when there is a mismatch between the allotted time a for a task and the actual work.  There is now a greater visibility as to the current status of the matter by simply reviewing the checklist.

This level of detail now gives the practice area the ability to truly hone and improve its processes to gain greater and more consistent efficiency.  For most firms, the evolution to this stage of maturity will be a multi-year process. However, LPM and LPI experience clearly show that the benefits of this effort will result in true competitive advantage.

To contact Keith Lipman: keith@prosperoware.com

© 2014, Edge International US, LLC. All rights reserved. No part of this article may be copied or reproduced without prior written approval.

 

Taking the Plunge: Do You Want to Be Managing Partner?

Posted in Law firm practices

UPDATE: This article won the BigLaw Pick of the Week award!

So you’re thinking about diving into the election for Managing Partner, eh?

 

 

 

 

You think your chances are good: you enjoy the respect of your partners, your business judgment is on a par with your legal judgment, and during your term on the Executive Committee, you came up with strategies that helped the firm navigate some rocky shoals and weather some serious storms. You’re seen as a problem-solver who can think outside the box and eschew tradition when necessary to respond to change.

Yet some close friends, your significant other and probably your family are asking, “Why in the world would you want to do that?” What will be the rewards and satisfactions of trying to herd a bunch of self-interested cats fiercely protective of their turf? Why would you back away from, or at least throttle back on, a thriving practice with some solid client relationships? How big a kick in the butt will your take-home pay take, given your firm’s history of undervaluing and undercompensating its leaders? And after your leadership tenure, how hard will it be to ramp your practice back up to the point where it can fund your Gold Years? Why invite frustration and pain?

Push the Pause Button

Before you throw your hat into the firm’s MP selection process, now is the time to pause and reflect on your motivations and incentives for what is bound to be a significant shift in role, responsibility, stature, and quality of life for at least a few years.

First of all, do not fall victim to all the vague reasons people often cite for deciding to become Managing Partner:

  • Larry asked me and I said yes.
  • It seemed like the thing to do at the time.
  • This would represent a triumph in the firm’s internecine power struggles.
  • We sort of rotate the MP role, and now it’s my turn.
  • I’m a little bored with my practice, so this might be an interesting change of scene for awhile.
  • It’s the next logical step up the high-achievers’ career ladder.
  • No one else wants to do it.

Leadership and Management

Although the position carries the title of Managing Partner, to a significant degree it is in fact a leadership role. What’s the difference?  In a nutshell, management is exercising influence and control over present activity and near-term objectives. Management focuses on maximizing here-and-now performance variables and overseeing performers engaged in current activity. It’s about implementation.

Leadership, on the other hand, is resolutely future-oriented: it’s based on the premise that the present is never good enough and that the highest priority should be to guide the troops toward some improved future state. Leadership is about shaping and communicating vision.

Are You a Natural?

Research by Marcus Buckingham has suggested that while there are great natural leaders and great natural managers, very few people are both. Lest you aspire to a position for which you are not well-suited, now is a good time to ask yourself some hard questions about your leadership aptitudes and motivations.

In a landmark piece of social research some years back, emotional intelligence guru Daniel Goleman identified six predominant patterns in which people exercise influence over others. Two could be characterized as leadership styles:

  • Visionary: “Follow me, I will show the path to the promised land.”
  • Democratic/Participative: “Tell me what you think, and I’ll tell you what I think. Communication is king. Everyone has a voice.”

 The other four really are management styles:

  • Command and Control/Coercive: “I have formal authority.  Do what I tell you.”
  • Charismatic/Affiliative: “People come first. I inspire the devotion of people by caring about them.”
  • Coaching:Let me give you everything you need to perform at your best.”
  • Exemplar: “Want to see it done right?  Just watch me.  I’m the expert.”

Among lawyers, the exemplar style is most common, because lawyers are trained to be subject-matter experts who command respect by the display of their expertise. It is noteworthy that Goleman’s research showed that this style has the most negative impact on organizational culture and morale because the exemplar tends to remain so distant from the troops. In short, if you are naturally a “be reasonable, do it my way” kind of manager, you should think twice about that run for Managing Partner.

An important finding in Goleman’s research belabors the obvious: one size does not fit all. Different settings and challenges call for different styles of leadership, as well as the ability to adjust one’s style as needed.  Unfortunately, most of us have a tendency to default to a single, most-comfortable style, which implies that there are likely to be some situations where we are out of our element.

Some Serious Navel-Staring

The best way to reality-test your leadership mettle is not simply to try to catalog a bunch of abstract leadership qualities (e.g., vision, ability to inspire others, resiliency, etc.). Instead, try to construct a vivid template of what your leadership capabilities are likely to look like in action as translated into the Managing Partner position — in your firm under present circumstances.

You can do this by answering the following ten questions (and it helps to write your answers down, so that moments of fleeting insight or inspiration don’t escape working memory):

 If I realize my full potential as a Managing Partner…

1.    What will I be leading or managing?

  • A respected firm trying to preserve market share and status?
  • A firm committed to changing its brand and market identity?
  • A growth-driven firm undertaking geographic expansion and practice diversification?
  • A powerful cohesive culture marked by share goals, values and norms?
  • A firm in distress or caught in the cross-hairs of change?
  • A Swiss verein assemblage of basically autonomous entities?

2.    Whom will I lead? Who are my most important constituents?

  • External constituents – like maybe clients, or perhaps the firm’s banks?
  • The established power elite of the firm?
  • The heavy-hitting rainmakers and business developers?
  • Office managing partners, practice group leaders and/or client team leaders?
  • Equity partners eager for increased PPEP?
  • The successor generation hungry to ascend to power and control?
  • Directors of your administrative and operational infrastructure?
  • The soup-to-nuts rank and file performers central to legal service delivery?

3.    What will be the source of my leadership authority or clout?

  • The powers of your office and title?
  • A power base of influential partners?
  • My “ownership” of powerful clients and relationships?
  • My proven strategic and tactical vision?
  • My thought leadership and powers of rational persuasions?
  • Moral or ethical leadership?
  • My legal experience or subject matter expertise?
  • My charisma, personality, personal charm or irrational attractiveness?
  • My interpersonal and collaboration skills and ability to build trust and support?
  • My political savvy?
  • My ability to keep my head when those about me are losing theirs?
  • Other: _____________________________?

4.    What will be the effect, result or benefit of my leadership excellence?

  • Clear strategic direction for my firm, coupled with effective tactical implementation?
  • Acquisitions, affiliations, mergers or other forms of non-organic growth?
  • More effective organization, structure, policies, procedures, methods and standards?
  • Financial stability and sustainable profitability?
  • Resolution of short-term crises or threats to firm viability?
  • An improved firm reputation for exceptional innovation and creativity?
  • Exponentially strengthened client relationships?
  • Enhancement of your personal reputation and/or power?
  • Creating a platform from which to leverage personal wealth in the long term?
  • Other: _______________________

 5.    What form or style will my leadership take?

  • The inspired and inspiring visionary?
  • The break-the-mold change catalyst?
  • The general commanding the troops?
  • The financial wizard and nuts-and-bolts attender to detail?
  • The great communicator and bridge-builder?
  • The dearly-beloved team builder?
  • The transformative implementer of technology and innovation?
  • The talent recognizer and talent builder?
  • Other: ____________________________

6.    What 3 strengths, abilities, or “differentiators” will be most instrumental in my leadership success?

7.    How will others characterize my leadership?  What will they say about me?

 8.    What personal  rewards and satisfactions will enjoy, near-term and long term?

 9.    What kind of learning, training, support, resources or mentoring will I need to realize my full potential and overcome barriers?

Important Bonus Question

As you contemplate firm leadership, you may have a tendency toward first-things-first: getting elected, buying new furniture for your office, establishing your management/ leadership team, laying the foundations for your span of control.  At this point, it may be hard to envision the future, especially the long-term consequences of your leadership tenure.  However, in order to chart all the coordinates of your motivational map, now is the time to stop and ask yourself a final, utterly essential question: At the end of my day, what will be my legacy?  What will I be known for? How will firm history record my stewardship? What foundations or edifices will we have erected?

And finally, but for me, what would have happened?

 

© 2014, Edge International US, LLC. All rights reserved. No part of this article may be copied or reproduced without prior written approval.

“You did WHAT!?” – The Powerful Value of Providing Something for Nothing

Posted in Business Development

At the risk of further confirming our reputation as heretics, let us advance what to most practicing lawyers may seem like an outrageous proposition: “Not everything in life has to be a billable event. There are times when you’ll help your cause most by providing value and not charging the client.”

 Full disclosure: This post was triggered by the progress reports of a group of up-and-coming partners participating in a year-long business development coaching program. All confirmed the powerful BD benefits of face-to-face time, researching all aspects of potential clients’ businesses, and relentless follow-up on preliminary contacts.  But several reported a surprising — and surprisingly successful — tactic that had resulted in business breakthroughs: when the potential relationship was still in the courting stage and before engagements commenced, they volunteered to perform some “staging” activity, fact-gathering or preliminary situation analysis, at no charge.

Why Would I Do That?

Particularly in the course of business development, when you are trying to establish relationships and build trust (or get added to a panel or even to displace another established relationship), you may increase your chances of success by crawling outside the “how-much-and-how-soon-can-I-bill?” box.  “Strategic altruism,” in which you confer some value gratis, may take diverse forms and provide diverse benefits, near-term and long term:

  • Rapport: It may convince potential clients that for once they are not going to be on the receiving end of a high pressure sales pitch (part of which comes from that dreaded chapter of the Sales 101 course entitled “how to overcome customer objections”). They may relax, smile, stifle their skepticism, and throttle back their defensiveness. They may become more open to you and more open to what you are marketing.
  • Showing the Flag: It can provide you with an opportunity to give the client a low-risk taste test of some aspect of your expertise or judgment in action (particularly important if this is an attempted new client conquest or you are trotting out a new or specialized legal service, such as Inter Partes Review, Dark Pool financial litigation, patent portfolio monetization, cybersecurity protection, or some other new and esoteric practice area.
  • Scoping Support: In service of faster, more focused, and more accurate scoping of potential engagements, performing some preliminary evaluation without charge can help you do better situation analysis and propose more realistic project scope, phases, tasks and budgets. It may also tell you if you’ve stumbled into a mine field.
  • Learning About the Client: You may elicit some invaluable information (after executing an NDA, of course) that will give you a feel for both the “hard” dimensions of this client’s needs and priorities and for the “soft” dimensions of how this  client operates in relationships, defines value, and likes to communicate.
  • Setting the Stage and Differentiating Yourself From Competitors: By performing some baseline project-mapping, you can configure an approach to service delivery that is tailored powerfully and specifically to your or your firm’s capabilities. By “giving something away free,” you can demonstrate that you are a uniquely helpful and client-focused lawyer, as well as showing the potential client what it will be like to work together.  True differentiators are rare in the legal profession.  Being a “giver” can really set you apart. That is, you can put yourself in the BD driver’s seat and shove your competitors to the back of the bus.
  • Provoking a Little Guilt: By proactively conferring a “gift” of value on a potential client, you may foster a subliminal sense that “fairness” requires them to reciprocate in some way, if only to give you a more receptive ear or the chance to strut your stuff with some serious assignments. One wag has called this the “Genius of Generosity.”

How Long Since You’ve Sent an “NC” Bill?

Even after business development has morphed into an ongoing client relationship, sometimes it’s good strategy to demonstrate to the client that your overarching goal is not to profit-maximize at all times. Suppose a matter has been “overtaken by events” (especially events not of your making) and is experiencing some scope creep that’s triggering some unanticipated billed time.  Should you invariably hew to the letter of the engagement letter and bill to the last drop?

Some months ago, we walked with a General Counsel past a staff bulletin board in the legal department’s hallway. There, fastened with a giant push pin, was a law firm invoice – a pretty hefty invoice. Among the various line items was the item: “Additional research suggested by passage of new XYZ legislation.” On the charge line was the entry “NC,” circled in bright red magic marker.  “Do you see that?” the General Counsel exclaimed. “No one has ever sent me a ‘no charge’ bill before!  That’s being an attentive steward of our money, and I was impressed.”

The moral is clear: if circumstances conspire to force you to expend more time and resources on your firm’s own dime, don’t eat the cost in silence.  Let the client know the nature and magnitude of the work you’ve opted not to bill.  You don’t have to be virtuous in a vacuum.  And you will trigger happy surprise.

Now Don’t Get All Crazy

Let’s be clear: we are not suggesting that you turn your firm wholesale into a pro bono operation.  You should expect to be paid fair value for your work, and even cost-constrained clients should be expected to pay for it. If you make the decision to do a little loss-leading, of course you are not going to unilaterally write no-charge on significant amounts of substantive legal work product.

Your generosity-leverage events are best confined to ancillary or preparatory activities, in other words, they are “baby steps” that help build a platform for the later and greater value you can confer. That platform can be the foundation – the legal predicate — on which a significant engagement is built. It can also demonstrate what the working relationship with you and your firm will be like.  Either way, it can be a seed that grows big trees.

 

© 2014, Edge International US, LLC. All rights reserved. No part of this article may be copied or reproduced without prior written approval.

Straight From the Horse’s Mouth – GCs Say What They Want From Outside Firms

Posted in General Counsel

 

We recently attended a private meeting held in Panama with the General Counsel of 35 global corporations. Given the differences in their businesses, geography, cultures and operational envelopes, one would surmise that they saw their practices, priorities and peeves quite differently.  Not so: it would be fair to say that there were more areas of concordance in their thinking as there were differences and disagreements.  Plain speaking was the order of the day.

Their responses were particularly telling – and particularly outspoken – when we propounded a broad meta-question: What do legal departments want from their law firms?  

We then sat back, listening intently, typing on our iPads as fast as our fingers could fly. Here, verbatim and unedited, were some of their responses:

 

Tending the Relationship

  • You would do well to understand your place in our universe.  Your role is to serve us, not vice-versa.
  • We want to work with firms that really understand our business.
  • Treat clients as partners, not as customers.
  • We would appreciate less arrogance.  A lot less arrogance.
  • Spell our company and executive names correctly.  At least pretend that you care.
  • You are not unique.  You may think you are, but from the client’s viewpoint, law firms have more things in common than things that distinguish them.
  • Above all, communicate better. No surprises, no excuses. Keep us constantly in the loop.
  • And communicate more efficiently.  Get to the point and spare us the 10-page memos.  We want the answer, not a ton of irrelevant legal analysis.
  • Make the effort to get to know our Legal Department: our goals, priorities, our constraints and pressures, our initiatives, and yes, our lawyers and our culture. Work harder at learning to work with us.
  • Want to win our trust? Skip the tickets to ball games and provide some unbilled legal advice that shows you’re really invested in us.
  • We would prefer to work with one partner only – one who really understands our business.
  • Also, please understand that our CEO is not available at your whim. Respect our time.
  • You should run our matters like they are a business and like your own money is at stake for the results and fees.
  • If you don’t know the answer, admit it. Don’t BS us, don’t hem and haw.  Just go and find out the right answer.
  • You should view our in-house attorneys as intelligent resources, not pains in the backside. We’re tired of being patronized by people we pay money to.
  • Firms should match our genuine commitment to diversity, not just pay lip service.
  • Make training available to us that is practical and really useful. We don’t need abstract theory or generic legal summaries.
  • Don’t gild your lily on our dime.  We don’t fly first-class; you shouldn’t either.

Service Delivery Issues

  • Do the right legal work for the risk at issue.  This should be so basic, but we still see a lot of overlawyering.
  • Provide strategy alternatives, and be sure to tie them to associated fees and risks. We don’t operate carte blanche any more.
  • Deadlines and budgets are hugely important to us.  Teach your lawyers to work on-time and on-budget. If you see you’ll blow through a deadline or budget, let us now immediately; don’t wait until damage is done.
  • Send over a budget before we have to ask, and give us timely updates without having to be asked 10 times.
  • Interoffice conferences should be billed, if at all, to the single lowest billing rate of the attendees.
  • Use the right attorney – in terms of level and expertise – on our matter. Don’t just throw the work to someone who needs hours or happens to be available.

About Those Fees and Fee Arrangements

  • Good idea:  offer alternative fee arrangements right off the bat, before we have to ask.
  • We really liked it when a firm proactively suggested special billing arrangements for a large document review.
  • Please re-use previous work product and then only charge us for updating or changing it.
  • Do not charge us a geographic fee penalty.

About Those Associates

  • Stop training your associates on our dime.
  • We don’t want to use first and second year associates, much less pay for them.  Their work is immature and their judgment poor.
  • Associate work should be evaluated on our satisfaction with the work product, not on how many hours they spend on it. Billable hours do not correlate with work quality.

For these 35 chief legal officers, their dominant priorities seem clear:

1) Walk a mile in our shoes.

2) Treat the law firm-client relationship as a partnership. To team with us, really get to know us and don’t demean us or take advantage of us. Collaborate better. Try harder.  Show respect – to everyone, at all times, in all situations.

3) Expend more effort – much more effort — on better communication.

4) Think and act proactively; don’t make us do all the heavy lifting.

5) Work efficiently, mind the deadlines and respect the budget.

 

© 2014, Edge International US, LLC. All rights reserved. No part of this article may be copied or reproduced without prior written approval.

Making Your Net Work

Posted in Business Development

When we hear business development-oriented lawyers talk about all the wondrous things evolving social media technology can do to their (or their firm’s) market visibility and reach, we’re reminded of the story of the backwoods recluse who wins a new automatic dishwasher in a contest. When a neighbor runs into him in town and asks how he likes this life-changing bit of modern technology, the rustic shakes his head and scoffs, “well, it ain’t worth a tinker’s damn.  I’ve had it for two weeks now, and so far it hasn’t even cleared the table.”

Skilled social media navigators frequently brag about all the people they are “networked in” with –  scores, hundreds or even thousands of LinkedIn connections, Twitter followers or FaceBook friends. And you have to admit that the multiplier-effect potential of today’s digital technology is pretty astonishing. Social media certainly does seem to bring the entire world within reach.

But once you get it in reach, what happens then?

For many introverted, autonomous lawyers, the answer is…absolutely nothing. We cultivate these lovely long lists of contacts, and we think and act as if having a bunch of electronic synapses means that the nerves are firing and meaningful message content is actually being communicated among all the cells.  Not true. 

Those who gauge networking success by the sheer number of contacts they can cultivate digitally need to get this through their heads: You are not “networked” unless you make your net work, which is to say, unless you work your net.

A Relationship Game, Not a Numbers Game

Particularly when you are using networking for business development, your networking efforts must extend beyond simply reaching out and touching someone (or a lot of someones). All networkers – whether zealous or reluctant – must remember this: Contact Does Not Mean Impact. 

A robo-caller may succeed in contacting me when I pick up my phone, but has no chance whatever of impacting me before I hang up. Or I may say yes to your LinkedIn request (and I usually do; what harm can saying yes do?), but that contact does not mean we have forged a functioning relationship.

It is far more important to know how to trigger an interpersonal impact, and in successful networking, impact – positive, actionable impact — comes from one activity in particular: following up on initial contact.

Okay, I See You.  Now What?

Yeah, yeah, we know you’re going to tell us that powerful, positive impact also comes from visibility. All those articles you write, blogs you post, your Super Lawyer award (six years in a row), your year as Chairman of the Bar Association. Yeah, they count.  They do help bolster your brand, your image, your rep, your cred.  But truth to tell, they generally do not translate directly into business — into new client relationships, into client trust and rapport – into mutually interdependent interactions. Those things come most and best from the impact that results from face-to-face interactions, from relationships that have a nuanced personal dimension.

FU Means…Follow Up

Word of mouth may open the door but it does not close the sale. You must follow up! Personally. Frequently. Repeatedly. Appropriately. Effectively.  This is the part where lawyers’ self-marketing efforts most often crater, because all this following up stuff is, by and large, a huge time suck that drives socially standoffish lawyers nuts.  Lawyers hate all that follow-up stuff: the calls (and repeated calls), the banal lunches lubricated with humdrum pleasantries, the articles, the speeches, participation on conference panels, rubber chicken dinners and attendance at various events. All those things that take them away from practicing law, billing hours and showcasing their substantive legal expertise.

Making Networking Work

Online technology is not going to rescue you from life in the networking trenches. Just as social media freaks fall in love with their contact numbers, mindless networkers buy into the old salesman’s numbers myth: if I get one sale for every 10 rejections, I should go out and try to get as many rejections as I can, right? Okay, laugh, but when you only have a limited amount of time for self-marketing, there’s no possible way to follow up with all the names in your LinkedIn list, Facebook page and Twitter account (and a lot of them, frankly, are junk anyway).

Therefore, when leveraging your networking efforts – your follow up activity — setting efficient priorities becomes Job One. At the outset, you have to distinguish Tier One impacts from Tier Two contacts. That is, unless/until you have a lot of time available for mining low-probability leads, take the time to identify the people with whom you can hope to cultivate high-leverage, high-traction impact. Who are the people with high impact potential?

People you have justifiable reason to believe (because you have done thorough research) may be

  • Potential Clients because their needs and priorities fall in your legal sweet spot.
  • Referral Resources: People who respect you enough to be willing to open doors for you, as well as knowing others’ needs and what it takes to address them
  • Centers of Influence: Well-connected, high-torque people who can make things happen
  • Connectors: Those social extroverts who delight in bringing like-minded people together

Keep Your Eye on the Prize

Unless you are into affiliation for affiliation’s sake, you have to keep reminding yourself that social media, like the rustic’s automatic dishwasher, is a tool that requires human intervention in order to produce results. And to keep your networking interactions from devolving into a dull, daunting and ultimately disappointing numbers game, we suggest that you remember the fundamental characteristics of Christopher Columbus’ successful voyages: 1) They had purpose. 2) They had direction. 3) They maintained momentum. 4) They rewarded perseverance. Put another way, effective networking is a human activity, not an electronic passivity.

© 2014, Edge International US, LLC. All rights reserved. No part of this article may be copied or reproduced without prior written approval.

Cutting Corners, Part IV: The Readers Speak

Posted in Legal Project Management

If one purpose of a blog is to provoke spirited debate, we surely succeeded in our recent posts on whether client-driven pressures for greater efficiency and cost control compel outside counsel to “cut corners” in legal service delivery.  Our premise that “an inevitable dog fight erupts whenever lawyers try to discuss quality and cost in the same sentence” proved to be true.  Passionate and pointed comments filled our email inbox.

So now it’s time take the microphone out into the audience and let you hear different voices first hand.

On Guard, Sir

Unsurprisingly, we heard from law firm lawyers who took umbrage at the idea that their clients might think them guilty of overlawyering and overbilling. As discussed more fully below, one large firm partner specifically rebutted the suggestion that firms’ level of service delivery is keyed primarily to profit motives: “There are real issues here greater than Firm greed or ego…”  

Over on the client side, a General Counsel expressed equal indignation at law firms’ suggestion that they, the law firms, are uniquely qualified – on the basis of both their ethical responsibilities and their legal acumen — to weigh risks against legal costs (that is, to unilaterally make scope-of-service judgments): “Today our cost-benefit analyses are very sophisticated…When we consider various forms and levels of service delivery, we are definitely not blind to the stakes and the risks.”

Who Bears the Risk of Curtailed Scope?

For one GC, the answer to the “who should assess risk?” question was clear:

We, and only we, should determine acceptable risk because we are the experts on our companies and business strategies.  Our company takes risks every day, and we understand how to evaluate when to dig deeper and when it’s time to move on.  When we don’t want more research or memos or depositions, we have made internal decisions about cost and benefit. 

Sounds good, but who bears the responsibility for the consequences of those risk decisions?

Predictably, several law firm respondents immediately focused on the worst case scenario – the risk taken proves unwise, bad things ensue, and the law firm gets blamed, or even sued.  Of law firm lawyers tweeting or emailing responses to our posts, not one thought that clients make wise decisions regarding risk.

Law firm responders suggested that they find themselves on the horns of a dilemma: clients limiting the scope of work (and therefore escalating risk) for cost-management’s sake on one hand, coupled with their willingness to sue their outside law firms if/when things blow up in everybody’s face.

The solution, several lawyers suggested is simple: if clients agree to a certain level of risk, they should not later be heard to complain if the poor risk decisions lead to problems.

For one commentator, this took the discussion into the realm of power politics as played out in the world of insurance:

No doubt this series of posts strikes a very sensitive nerve. Missing, I think, is the issue of 1) law firm E&O [ed: Errors and Omissions insurance coverage], and 2) the tripartite relationship dynamic of an insured (brand and loss run concerns), the primary insurer who usually finances Legal, and excess who plays back seat driver and questions unturned stones.

When we first received this comment, we wrote back privately:

…When a client is well-informed and is an active part of deciding how it chooses to proceed, is it not less likely to bring suit, since it was actively deciding and instructing the firm how to proceed?  Of course, such discussions should be memorialized, and the client should be well informed of the potential risks the firm can foresee.

To all the law firm lawyers who raised concerns about being sued if they didn’t look under every rock, we asked:

In light of the fear of being sued, why not just proceed with the work that you believe is necessary to assess/reduce the risk, and simply bear that as a cost of doing business if you can’t bill it to the client?

After all, we reasoned, if you really want to be protected, wouldn’t that additional research, contract review or investigation be like your own insurance protection in case things go badly later? For example, you would be able to say, “we read every one of the 500 contracts (even though you only paid for us to read 25), and we now know there are no significant risks or, in the event you do find something,  that there is an environmental nightmare in agreement 852 that could really cost the client.”  Wouldn’t you sleep better if you turned over all the rocks even if some of that rock-turning was at your own expense? And, if you did, wouldn’t the E&O and excess carriers be prevented from second guessing you?

You carry fire insurance even though you usually don’t have fires.  Isn’t this similar?  Should you do the extra work just in case it will save your bacon someday  if a matter goes sideways because your ignorant client didn’t follow your recommendation to expend more time and effort?

These intentionally provocative questions were not popular with law firms, and not one said they would choose to perform the extra work on their own dime.

The Profitability Argument

Moving away from wounded pride and risk management, and focusing instead on the dynamics-of-profitability issue, one respected consultant suggested that we “overstated the case” when we raised the possibility, as he paraphrased us, that “if a firm does less work it will derive less revenue on the matter, thus cutting into profits.”  His reasoning focused less on the scope of work performed than on the efficiency of service delivery:

These days, most firms have write-offs or write-downs on most matters. To the extent a firm’s efficiency improvements reduce write-offs/write-downs, then every dollar of write-offs or write-downs that can be avoided improves firm profits on a dollar-for-dollar basis.  Efficiency improvements that reduce write-offs/write-downs are among the most powerful profit improvements a firm can make – more powerful than cost-cutting to reduce the firm’s expense ratio, and even more effective than increasing leverage (which is hard to do these days).

True enough, but here we run into a stumbling block – or at least a huge asterisk – in the form of this respondent’s qualifier, “… to the extent there is enough new work to which saved lawyer hours can be applied.” Hold on there, we thought.

The respondent continued in this vein, assuming arguendo, unlimited manna from client heaven:

In fact, as long as new work is available [emphasis added] (admittedly not always the case), even a firm with no write-offs/write-downs will not reduce its profits by a single dollar by becoming more efficient.

That’s Not How It Looks to Us

Ah, but therein lies the rub.  We know of many firms that don’t have full plates and lots of work pouring in the door.  And plenty of the lawyers in those firms are being told – directly or indirectly – that they must fill those billable hour targets no matter what.   The message is clear: don’t bother being efficient, just fill up those timesheets.

Everything we see these days suggests that in fact, for many lawyers, enough new work isn’t available – that we have too many lawyers, too little work, and too many new technologies and new service delivery modalities that will exacerbate the work scarcity problem going forward.  There just seems to be no getting around the fact that client demands for efficiency and limits on scope have the real potential to impact law firm revenues and profitability. To us there seems little doubt that finding practical ways to re-establish a stable and sustainable law firm-client economic equilibrium is the biggest elephant in the room these days.

Reasonable Folks Agreeing

At the end of the day, what we think is the proper collaborative tone was struck in the response of the Chief Operating Officer of an 800-attorney firm with offices nationwide:

I believe the challenge for us, in developing a competitive differentiation, is…to address the GC’s continued focus on value. Needless to say, education and communication with both our clients and our colleagues will play a major role in accomplishing this goal.

Another large firm partner put even a sharper point on addressing the cost/risk/benefit issue:

Law firms cannot behave like a restaurant that does not include prices on the menu and presumes what should be served to the guest.

© 2014, Edge International US, LLC. All rights reserved. No part of this article may be copied or reproduced without prior written approval.

Skilled Scoping Diminishes Discord: Cutting Corners, Part III

Posted in Legal Project Management

 
Note: Due to the numerous and passionate responses to the first two posts on Cutting Corners, we have added Part IV to the series in which we will highlight the insightful (but profoundly divided) points of view we received from In-House Counsel and Law Firms.

 

In the first two posts in this series, we considered the typical law firm complaint that such efficiency-producing disciplines as Legal Project Management (LPM) and Legal Process Improvement (LPI) may actually encourage legal “corner-cutting.” Does this complaint reflect a valid concern about threats to quality of service, or is it mainly the cry of pain of firms now caught in a billing squeeze?

Who Defines the Bottom Line?

The hard truth is that the quality-versus-cost debate actually is over. In the aftermath of the global financial crisis and its draconian impact on legal budgets, almost all clients are re-evaluating their definitions of value and quality – with a constant eye on costs.

ln all manner of engagements clients wield the whip hand: they are imposing unprecedented direct constraints on legal spend, as well as pursuing new avenues for addressing basic legal needs more cost-effectively, including alternative fee arrangements, expanded use of technology, convergence programs, pulling more work in-house and sending more work to alternative service providers.  As just one example, the latest BTI Consulting Reportnotes that for IP work in 2015, in-house counsel can be expected to aggressively turn to settlements, alternative fee arrangements and efficient new work processes to keep costs in check. The result? A lot less IP-related revenue for law firms, which obviously does not make them happy.

Front End Scoping Beats Damage Control Any Day

However, firms will not improve their profitability by complaining about client-driven approaches to improving productivity and value.  Trying to position LPM as a scapegoat by claiming it erodes quality will neither improve service quality nor enhance client relations.  The parties will be better served by learning to work collaboratively to define the scope of work and the degree of risk that scope implies. This definition, in turn, will frame the amount of lawyering, billing, and overall legal costs the client will tolerate.

Rather than suggesting that the parties blithely ignore risk assessment in the name of cost savings  – now that would be cutting corners — what LPM suggests is that client and law firm jointly scope and prioritize potential risks both at the outset and during an engagement.

After instituting mandatory scoping discussions whenever the legal department assigns work to outside counsel, the General Counsel of a global hotel company found that outside counsel really focused on the client’s goals, chased fewer rabbits, concentrated work to advance the goals, and provided significantly more useful advice.  And, not insignificantly, there were fewer billing disputes.  The GC noted, “law firms did not take the reins with scoping even when we asked them to.  Instead, we decided to lead the way because upfront scoping is the best practice for effective use of our budgets.”

Once law firms accept that today’s rules of legal engagement no longer support carte blanche lawyering except under extraordinary circumstances, LPM provides a bridge for aligning all parties’ content, cost and quality expectations. Time spent at the outset defining in-scope and out-of-scope activity will both diminish the likelihood of scope creep and result in less surprised and angry client responses if unexpected events threaten the budget later on.  And, BTW, it reduces those pesky write-downs and write-offs that erode profitability.

Houston, We Have a Problem

The problem is that most law firm lawyers are pretty dreadful at scoping. Sophisticated scoping involves intensive front end engagement with the client. It also requires the courage to embrace change and examine alternative service delivery approaches, rather than defaulting to the-way-we-did-it-last-time pricing and planning. Yes, good scoping may require a considerable investment of front-end time and effort, but it helps avoid charges of either overlawyering or corner-cutting down the road.

This is because the parties have taken the time to discuss not only project phases, tasks, costs/budgets, and desired outcomes, but also how the client will define quality and value at every step of the engagement. The client – now fully informed – can make informed decisions about what work should be deemed in or out-of-scope.  If nasty things happen down the road, a fully-informed client is unlikely to allege malpractice.

Any risks incurred by initially limiting which tasks are undertaken and which are bypassed can be diminished by carefully discussing both the likelihood and the potential impact of alternative courses of action or various unexpected events. Indeed, we know of several instances where firms expressed concern that omitting certain activities might create malpractice exposure, and the clients agreed to indemnify them or hold them harmless for any consequence deriving from leaving certain T’s uncrossed or I’s undotted.

All in all, it makes little sense to blame Legal Project Management either for today’s dramatically altered legal landscape or for the realignment of the bargaining leverage between clients and law firms.  LPM is a response to these changes, not their cause. The best way to align issues of quality and cost is to discuss them in detail early and often, rather than have the parties sling great handfuls of mud at each other.

© 2014, Edge International US, LLC. All rights reserved. No part of this article may be copied or reproduced without prior written approval.