The rise of legal project management
There are few legal topics which have gathered as much regular attention in the legal press, blogs, at conferences, and even within the senior management teams of law firms themselves in recent years than the topic of legal project management (LPM) as law firms’ continue to wrestle with the need to improve matter efficiency, drive profitability, and deliver a better overall “client experience”.
In our first article of this three-part series on legal project management, I’m going to give a very brief overview of the rise of legal project management to help set the scene for our following articles on how you can implement good legal project management principles within your own firm. Indeed, the principles outlined below work equally well across all professional services, not just law – the only difference being you are more likely to be more familiar with them and be adopting them already.
At a more general level, project management has been around in its current guise at least since the mid-1950s in a wide variety of industries and professions. In 1969 the Project Management Institute was established, with its prime objectives being increasing greater communication and sharing best practices in the field.
Indeed, project management as a discipline is used as standard by other professional services organisations such as consultants, accountants, and architects but only more recently explicitly adopted within law firms.
Even in the legal world, it could also be seen as not that unusual, with Bruce McEwen (a noted legal commentator and president of Adam Smith, Esq.) observing that “every time you run a matter for your firm you are engaging in project management.” After all, lawyers do plan matters, they do (hopefully) delegate appropriate responsibilities, and they seek to deliver their matters to the appropriate level of quality, don’t they?
A number of key drivers also sit behind the increased visibility and need for legal project management, and which may be grouped into three overall themes:
- Those which are client centric, with increasing level of client demand for effective matter management and expectations around cost and efficiency (including the adoption of non-hourly methods of billing, such as fixed or contingent fees);
- Those which are market driven, given the increasing competition for legal work and more cost-effective approaches to not only managing the matter but the means by which a law firm delivers the matter; and
- Those which are internal to law firms themselves, with law firms looking for initiatives that will help drive - or at least sustain - acceptable levels of profitability given the reduced ability to have significant annual rate increases.
These themes have been around for a decade or more, but each is even more important when viewed in today’s current environment.
“In an effort to remain competitive, to be able to meet client requests, and fundamentally seek to reconnect the cost and value of legal services, LPM clearly has a critical role to play for today’s law firm.”
But how does legal project management (LPM) actually help? Well, the beauty of LPM is that when done well it benefits both the law firm and the law firm’s client.
When participants of early LPM surveys were questioned as to which benefits their firm had realised from their LPM efforts at that time (around 2013), nearly two-thirds identified having a “more productive relationship with clients” as being the main benefit realised. Repeating the survey today, and the same still holds true (followed by greater predictability of cost).
However, LPM has a much wider range of potential benefits, as outlined in the table below.
Table 1: The Benefits of LPM
Sample Client Benefits
Sample Law Firm Benefits
Greater predictability of cost, both at the individual phase level and also for the total matter
Greater client satisfaction
Enhanced communication and better management of expectations (the concept of “no surprises”)
Improved profitability (and realisation), through minimising write-downs/write-offs
A more managed and structured approach to legal work
Better risk management
Better predictability of (and improvement to) the eventual outcome (especially true for litigation-related matters)
Differentiation from competitors (although, arguably, this is now beginning to decline as more and more firms begin their own project management efforts)
Work delivered “on time, and on budget” (the concept of the ‘low delta firm’)
Better consistency across the firm’s offices and practice areas
Greater efficiencies (for example, the reduced need for “reinventing the wheel” on client matters)
Better teamwork/effectiveness among matter team members
Better quality and greater consistency of work product
Better morale/improved retention (due to the associated investment in training and personal development)
Protection of business with current clients
Delivers better know-how, precedents, and training
Sample Client Benefits
Greater predictability of cost, both at the individual phase level and also for the total matter
Enhanced communication and better management of expectations (the concept of “no surprises”)
A more managed and structured approach to legal work
Better predictability of (and improvement to) the eventual outcome (especially true for litigation-related matters)
Work delivered “on time, and on budget” (the concept of the ‘low delta firm’)
Greater efficiencies (for example, the reduced need for “reinventing the wheel” on client matters)
Better quality and greater consistency of work product
Sample Law Firm Benefits
Greater client satisfaction
Improved profitability (and realisation), through minimising write-downs/write-offs
Better risk management
Differentiation from competitors (although, arguably, this is now beginning to decline as more and more firms begin their own project management efforts)
Better consistency across the firm’s offices and practice areas
Better teamwork/effectiveness among matter team members
Better morale/improved retention (due to the associated investment in training and personal development)
Protection of business with current clients
Delivers better know-how, precedents, and training
In an effort to remain competitive, to be able to meet client requests, and fundamentally seek to reconnect the cost and value of legal services, LPM clearly has a critical role to play for today’s law firm.
Now is the right time to take out the mystery and put back the pragmatism as to what LPM is. What do I mean by this? Although LPM brings into play more formal processes, tools, techniques, and technologies, at its most fundamental level, it is about managing your matter well. Others have defined this as a process to help you define, plan, execute, and evaluate the matter that you are working on, strongly underpinned with effective communication and the setting and meeting of client expectations.
To me, it is about focusing on client outcomes, client value, and client business objectives, whilst also enabling you to protect your firm’s profitability. It is about doing what you as a lawyer or as a member of your firm’s professional staff already do but more deliberately and proactively, using existing management approaches and doing so using the language of business. Perhaps more simplistically, it is doing what’s right for the matter in the most effective manner.
So what are the key themes or elements of LPM we should consider? I would suggest the following six:
- Having a more upfront discussion of your client’s objectives and the expectations at the outset of the matter;
- Having a more detailed definition of scope to be addressed (and how to address any subsequent changes or variations in matter scope);
- Encouraging better and ongoing communication with the key stakeholders (or influencers) within your client’s team (within your own team) ;
- Being more structured in how we budget our matters;
- Having better and ongoing management of the matter throughout (including progress of budget cost to the actual cost for key phases or sections of the work); and,
- Capturing feedback on the matter at its conclusion to identify potential lessons learned and improvement opportunities (a theme often forgotten by law firms when implementing LPM).
We will explore each of these in a bit more detail in the two remaining articles in this series.
For law firms that have already embraced LPM (and there are now many who have), having both an organisational awareness and adoption of good LPM principles may act as a market differentiator in the immediate term and stand them in good stead for the times ahead. However, LPM is now rightly becoming viewed more as a “hygiene factor” by clients when seeking to select their external law firms and is now something which may dictate whether a law firm becomes appointed or not.
Now is not, therefore, the time to rein back on any LPM efforts, or be complacent if you have had an initiative in place for a number of years, but to move full steam ahead. And with this in mind, our next article in this short series looks at how you can get started with your LPM initiative or revitalise your existing one.
Stuart Dodds
Stuart is co-founder and principal of Positive Pricing, a professional services-focused pricing consulting firm. With nearly 30 years’ professional service firm experience, he was one of the first and longest serving pricing and LPM directors in the industry (with Linklaters and Baker McKenzie). He is the author of the first book covering law firm pricing, negotiation and LPM, Smarter Pricing, Smarter Profit by the American Bar Association), a frequent speaker at legal-industry conferences and is extensively quoted in pricing and project management publication and journals
https://positivepricing.com/about/case-studies/a-clear-focus-for-legal-project-management/
Positive Pricing will be presenting its ever-popular Professional Services Masterclass (virtually) in March. Further details can be found here.