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the bottom line volume 33, no. 2 APRIL 2012

Our website can be found at www.calbar.ca.gov/lpmt

OFFICIAL PUBLICATION OF THE STATE BAR OF CALIFORNIA LAW PRACTICE MANAGEMENT AND TECHNOLOGY SECTION

ISSUE FOCUS: LEGAL PROJECT MANAGEMENT AND PRODUCTIVITY

MCLE SELF-STUDY ARTICLE: HOW LEGAL PROJECT MANAGEMENT IS RESHAPING THE LEGAL PROFESSION

By Pamela H. Woldow and Douglas B. Richardson

Partners, Edge International

(Check end of this article for information on how to access 1.0 self-study credits.)

If you had suggested to a global conference of lawyers five years ago that Legal Project Management (LPM) would transform the face of the entire legal profession, you would have been met with blank, uncomprehending stares. If you had floated the term three years ago during the depths of the “GFC” – the global financial crisis – you’d have heard that a few AmLaw 100 firms were experimenting with LPM programs to respond to the demands of large, financially-challenged clients for more manageable and predictable outside legal spend.

If you had “Googled” LPM in 2010, you

would have learned that prominent law schools were already instituting LPM as part of their core curriculums, clearly a bellwether of the direction legal educators thought legal service delivery would head. You would have also read that scores of large firms were embarking on LPM initiatives of varying intensities, working overtime to identify and implement LPM best practices, and train their lawyers in basic LPM practices.

If you followed the trade literature and legal blogs in 2011, you should have seen LPM in there with convergence, profitability, more demanding client RFPs, and increased use of alternative fee arrangements (AFAs) as the hottest (and closely interrelated) topics. And

From The ChairPAGE 7

Productively Managing Knowledge

for Client ServicePAGE 9

Delegation – Using Others to Get More

DonePAGE 12

Using Technology to Coordinate Lawyer

& StaffPAGE 17

Leveraging Technology for

ProductivityPAGE 22

Book ReviewPAGE 29

Our Mission:To Improve the Quality of Law

Practice Through Effective Management

and Technology

Reprinted with permission from the State Bar of California Section of Law Practice Management and Technology.

Legal Project Management

law practice management & technololaw practice management & technologygy

service delivery.

continued from page 1

on the global front, if you followed the international legal press closely in early 2012, you’d have read how Mallesons Stephen Jaques, a 1,000-lawyer Australian firm, had committed fully to LPM implementation at the same time its partners voted to merge with a 1000-lawyer Chinese firm. Now, firms in Hong Kong, Singapore, New Zealand, and Thailand are adopting LPM, even as the trend escalates further in the UK, Canada, and the US.

LPM is going places and moving in a lot of different directions. It is expanding, morphing, maturing, spreading globally, and becoming part of the common parlance of legal service delivery. A couple of years ago, there was lively debate about whether LPM was merely a fad – a flash in the pan – or a trend that would eventually change the way all lawyers “think and do.”

Let’s be clear: LPM is a trend, and the firms, practice areas, and clients it has not yet impacted are few and far between. It is a trend driven ever more assertively by client needs and client demands, and it is evolving rapidly as firms big and small – as well as an increasing number of legal departments – pursue ever more practical approaches to LPM implementation. In the legal profession’s post-GFC “New Normal,” law firms that want to retain client loyalty, build business, and remain profitable have to make – and deliver on – some tall promises to their clients: Leaner budgets. More efficiency. More predictability. Better communication. Overall, greater value conferred.

The ABCs of LPM

At its core, LPM is rooted in three common-sense precepts:

- Front end planning beats damage control.

- Keep all of the stakeholders in the loop all of the time.

- If it can’t be measured, it can’t be managed.

LPM is not one-size-fits-all; above all, it is both scalable and adaptable. Depending on its application or context, it can be elegantly simple or extraordinarily complex. Regardless of where and how applied, however, LPM includes five cascading stages:

1. Effective law firm-client collaboration to set project Objectives and Scope; that is, defining the outcomes the client wants and agreeing on the breadth and depth of legal work the firm will provide.

2. Building the Project Plan which includes identifying phases and tasks, the project team and stakeholders, building the project budget, creating a communications plan, and analyzing potential risks.

3. Executing the Plan as a framework for legal work, including delegating tasks appropriately and managing the “people dimensions” of legal performance.

4. Monitoring the project which includes both measuring progress against agreed timeframes and, particularly important, tracking budget-to-actual expenditures of time and dollars.

5. Post Project Review with both the project team and client, to identify strengths and develop-mental needs, consolidate learning, and provide consistent information capture to support ever more sophisticated “knowledge capture” and Knowledge Management (now commonly known as “KM”).

Before and After

Initially, LPM was widely misperceived by many lawyers as a complex, highly-quantitative system of processes and procedures with a steep learning curve that would exponentially increase demands on their

2

LPM is going places and moving in a lot of different directions. It is expanding,

morphing, maturing, spreading globally, and becoming part of the common parlance of legal

Reprinted with permission from the State Bar of California Section of Law Practice Management and Technology.

Legal Project Management

3the bottom line volume 33, no. 2 APRIL 2012

continued from page 2

Old Days, Old Ways New Days, New Plays

Firm determines scope of engagement in its sole discretion, and no stone is left unturned – provided the meter stays running.

Intensive collaborative scoping discussions between firm and client to define project deliverables, phases, and tasks, as well as anticipate possible risks, unexpected events, and their likely costs and consequences.

Relationship partner gives client a “wet finger estimate” for entire engagement, and then the firm goes off and does all the work (“We’ll let you know when it’s done”).

Comprehensive project plan allocates task responsibilities between firm and client (thus sharing risks previously borne entirely by the firm), prepares budget for each phase and task, selects most efficient/effective project team, and defines communication pathways and responsibilities.

“Hub and spokes” relationship between responsible partner and team means partner is sole repository of all engagement-related knowledge and budget information. Team members operate on a “need-to-know” basis.

LPM support tools provide integrated real-time description of all project parameters, deliverables and budgets, accessible to all team members and stakeholders at all project stages.

Matter is automatically staffed the way it was for the last similar engagement – based on who is available but not necessarily on who is most suitable.

Efficient delegation of tasks is accorded highest management priority.

Associates do not know overall engagement scope or overall project budget, so they often “get it wrong” and/or “overlawyer” tasks, resulting in do-overs and write-downs/write-offs.

Project progress is closely and constantly monitored and communicated to client, with special emphasis on actual-to-budget time and cost figures.

Client often surprised by crises, cost overruns, and unexpected events, which trigger frantic and costly damage-control efforts.

Communication among all stakeholders is transparent and task-specific. Client and team kept are kept in loop at all times. Unexpected events – and their budget impact – are addressed as previously discussed in scoping discussions.

Firm eventually “finishes the job,” sends final bill, and immediately moves on to next matter.

Post-project review of each engagement with team and client identifies strengths and areas for improvement, and provides knowledge capture that is aggregated into a cumulative knowledge management (KM) capability.

Reprinted with permission from the State Bar of California Section of Law Practice Management and Technology.

Le

4the bottom line volume 33, no. 2 APRIL 2012

gal Project Management continued from page 3

“We are always looking for ways to strengthen our relationships with clients, and we believe

LPM will help us deliver legal services with greater efficiency

and certainty of cost. Inherent in LPM is an

increased level of communication between

attorney and client which allows clients to monitor progress on their matters

in a way that helps limit surprises. Our use of

LPM will give our clients a level of confidence

which will be especially beneficial for public

agencies during these tough and uncertain economic times,” said

Eric Garner, managing partner of Best Best &

Krieger, a 200-lawyer firm with offices in California

and Washington, D.C.

time. Others thought LPM would operate as a push-button machine, a set of lock-step marching orders mandated by software-driven methods and metrics.

These apprehensions are misplaced. In reality, LPM is not primarily about software, systems, processes, and metrics. It’s about people. It’s about the way lawyers practice their craft – not the content of that craft. It’s about how all stakeholders communicate and collaborate. In short, LPM should be thought of as a logical, flexible framework for driving better planning, management, and communication into the myriad ways lawyers employ their knowledge and deliver service.

Well and good, you may say, but can you give me an example of what well-implemented LPM looks like? Okay, imagine a side-by-side comparison between the “old way” a typical matter was handled and its LPM-enabled counterpart--see chart on page 3.

A New Role for Firm Lawyers

From this comparison, it is evident that efficient and effective service delivery does indeed expand the role of today’s top-performing lawyers: Superior performance will not relate solely to the application of legal knowledge and experience to produce excellent legal work; it will include both superior lawyering and superior management of legal matters.

Like it or not, in most cases, this implies that lawyers at all levels will be accountable for enhancing their own practice. They will have to be trained, initially in basic LPM precepts, and subsequently in ever-evolving LPM best practices. Relationship partners and those heading projects will have to improve their planning, management, and communication skills to foster full-team collaboration. In addition, pretty soon all firms, regardless of size, will have to invest in LPM-related tools and training to allow lawyers to discharge all these new responsibilities.

Non-Lawyer LPM Support

Rather than imposing LPM responsibilities solely on their lawyers, a few larger firms have hired or developed experienced non-lawyer internal project management staff to work alongside the lawyers and shoulder much of the heavy lifting when it comes to scoping, pricing, and planning. Many have considerable in-depth substantive knowledge, and many also serve as liaisons between a firm’s financial function and its legal practitioners. These internal experts also are becoming invaluable repositories of experience, as well as day-to-day advisors to firm lawyers on many ongoing projects.

The decision to employ non-lawyer LPM experts requires an unflinching cost-benefit analysis, because it imposes a layer of

Reprinted with permission from the State Bar of California Section of Law Practice Management and Technology.

5the bottom line volume 33, no. 2 APRIL 2012

Legal Project Management continued from page 4

In addition to being a pathway to greater productivity, LPM

can serve as a powerful “communication engine” that fundamentally realigns the relationship between client and law firm – historically, a rich source of tugs-of-war about strategy, balance of

power, and, of course, money.

overhead and at present, the majority of clients won’t pay costs allocable specifically to project management. This may change in the future as LPM matures and proves itself, but right now LPM overhead must be offset by compensatory increases in client business, revenue, and profitability.

The Trickle-Down Effect

LPM has moved past the pioneering efforts of the “first-adopters” and probably past those of “first-followers,” as well. Today, LPM is no longer a unique marketplace differentiator for law firms; it is becoming the ante firms must pay to get into the game. As noted above, we are seeing a dramatically increased number of client RFPs demanding that firms demonstrate LPM capability as a baseline selection criterion.

Transitions in Tools

LPM is not driven by software. It is, however, being supported by an increasingly user-friendly set of tools that speed and integrate project scoping, planning, budgeting, and management. Many lawyers found first-generation LPM software tools, and templates cumbersome and overly complex, but in response to marketplace demands and opportunities, many new and elegant tools are being developed. Some created by outside vendors, some are home-grown. Some of these tools are absolutely superb: Clear, simple, fast, easy-to-learn and manage. Rather than adding to lawyers’ work management burdens, they are proving their ability to dramatically speed many matter-management tasks – a fact that, of course, bears directly on profitability.

A New Perspective on the Law Firm – Client Relationship

In addition to being a pathway to greater productivity, LPM can serve as a powerful “communication engine” that fundamentally realigns the relationship between client and law firm – historically, a rich source of tugs-of-war about strategy, balance of power, and, of course, money. Whether the client needs a Rolls Royce or whether a Toyota will suffice. Primarily because it so strongly promotes front-end collaborative discussions about objectives, deliverables, budgets, and unexpected events, LPM

substitutes foresight for post-hoc damage control. Its emphasis on early and open communication provides clients with greater predictability and fewer surprises.

Perhaps the most important recent change in effective LPM implementation was sparked by firms that chose to focus LPM training on specific practice groups or client teams rather than conducting broad-band full-immersion workshops and by those that decided to include client-side participants in their LPM training. Recently, for example, one global firm, Mallesons Stefan Jaques, launched its LPM initiative with joint workshops with its four largest clients, and saw striking improvement in collaboration: LPM not only resulted in improved functional interaction between firm and client lawyers, it promoted a climate in which the firm could ask for – and was assured it would receive – more business.

The LPM Implementation Challenge

Right now, firms are trying many different roads to better implement project management, and best practices already are emerging, still led primarily by large firms with large clients. Increasingly, however, smaller firms will either have to adopt and adapt the LPM implementation approaches of larger competitors – an expensive proposition – or develop their own scalable cost-effective LPM approaches and tools.

Reprinted with permission from the State Bar of California Section of Law Practice Management and Technology.

6the bottom line volume 33, no. 2 APRIL 2012

Legal Project Management continued from page 5

It seems ironic that for all the remarkable developments

LPM is going through as it matures, before long it will cease to be remarkable. In

perhaps as soon as 18 months, LPM will stabilize, settle on best practices, become lean, elegant, user-friendly, and

transparent.

Competitive pressures within their own market segments will prohibit them from opting out of LPM and hewing to “business as usual,” simply because within several years, their vision of business as usual will no longer exist.

In 2012, the firms farthest along the LPM implementation learning curve are now working to translate their initial efforts, successes, and pratfalls into fully-functioning firmwide LPM platforms. Profession-wide, the learning curve is flattening.

Equally important, a body of LPM knowledge and best practices is rapidly emerging, with the salutary effect of demystifing LPM, minimizing false starts, streamlining LPM planning, and avoiding trips down costly and unproductive rabbit holes. Managing partners and managing directors are comparing notes, the technology experts are collaborating with lawyers to develop streamlined, elegant integrated software support tools, and LPM seminars and articles abound.

What the Future Holds

It seems ironic that for all the remarkable developments LPM is going through as it matures, before long it will cease to be remarkable. In perhaps as soon as 18 months, LPM will stabilize, settle on best practices, become lean, elegant, user-friendly, and transparent. At that point, first-adopters will be history,

first-followers will have caught up with best practices, and middle-of-the-pack followers will have adapted and scaled LPM to their clients and their work. While cultural and local market differences certainly will continue to differentiate local and global law firms, because LPM is infrastructural, LPM best practices can be adopted relatively easily across cultures.

Those firms whose LPM efforts are moving through adolescence to maturity report that although initial implementation was noisy and sometimes painful, their efforts are clearly gaining momentum, internally and with clients. LPM has become accepted as part of who they are and how they operate. As pioneers, their experience will make it easier for others to follow as they move from Introduction to Initial Implementation to long-term Institutionalization.

Pamela Woldow's diverse career has included roles as a practicing attorney, senior in-house counsel, and consultant to major law firms and legal departments worldwide. Over the last several years, she has earned widespread recogni-tion for her pioneering work in transforming law firm-client relationships, including Legal Project Management, Alternative Fee Arrangements, RFPs and law firm selection and convergence programs. The ABA has designated her as a "Legal Rebel" - a change catalyst leading innovation in the practice of law.

Douglas Richardson is a partner of Edge International, spe-cializing in legal leadership, communications and culture. A former large firm lititgator and federal prosecutor, he also served as Director of Communications for the Pennsylvania Department of Public Welfare and as a senior executive in two of the world’s largest career management consulting firms. He has been an award-winning Dow Jones columnist since 1984.

Reprinted with permission from the State Bar of California Section of Law Practice Management and Technology.