Note: This blog series is based on one of our new “Work from Home™ Series” of LPM tools and templates. In a survey of nearly 400 project management professionals from a variety of industries, Dr. Penny Pullan asked participants to...
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LegalBizDev

The latest post from Jim Hassett’s blog Legal Business Development.


Five Ways to Increase Engagement of Virtual Teams (Part 1 of 3)

Note:  This blog series is based on one of our new “Work from Home Series” of LPM tools and templates.

In a survey of nearly 400 project management professionals from a variety of industries, Dr. Penny Pullan asked participants to identify the greatest challenges they faced when working remotely. Far and away, the single greatest challenge was “engaging remote participants” (76%).  When asked what actions would help virtual team members be more engaged and productive, survey respondents often gave the following answers:

  1. Regular, clear communications, without lengthy gaps in between;
  2. Clear roles and responsibilities;
  3. Improve virtual team meetings;
  4. An open team culture; and
  5. Shared vision, outcomes, and a sense of purpose.

CommunicationPlan_May 2020The rest of this article offers practical tips to address each of the recom­mended action steps identified above.  It draws on material from our extensive online library of LPM tools and templates.

Action Step 1:  Regular, clear communications, without lengthy gaps in between

Using a Communication Plan is critical when team members are working remotely to ensure regular, clear communications.  The Communication Plan shown at right, taken from our online library, identifies who on the team is engaging in the communication, and with whom they are communicating.  It also describes the information that is being communicated, and when and how that communication is to be delivered.

 

 

Matter Plan_May 2020 Action Step 2:  Clear roles and responsibilities

Using a Matter Plan is a simple way to determine who is responsible for which tasks and the deadline for each task.  The precise format of a Matter Plan varies depending on the needs and preferences of the users.  The Matter Plan shown at left is excerpted from our online LPM library.  Additional columns could be added to include each timekeeper’s hourly rates, estimate fees for each task, and estimate total fees. 

Many project managers find it useful to visualize project schedules in the form of Gantt charts, which are bar graphs that show the start and finish dates for each task of a project.  A Gantt chart for the example shown at left would look like this:

Gantt Chart_May 2020Note: This image was taken from our LPM tool “About Gantt charts.”  Many free programs can be found on the internet to generate charts like this. This sample was created with free software at www.tomsplanner.com. However, for legal projects it may be simpler to create a chart in Word or Excel or even on a handwritten document

A Gantt chart can be quite useful to team members, since it shows tasks and deadlines in a form that clarifies what must happen first, and when certain tasks might conflict with one another.

In Part 2 of this blog series, we will present valuable tips on how to increase engagement by improving virtual team meetings.

      


Case Study: The benefits of practice innovation (Part 2 of 2)

By Tim Batdorf and Jim Hassett

This post completes our interview with Paul SaundersStewart McKelvey's Practice Innovation Partner.

Q: In Part 1 of our discussion, we talked about your position at the firm and some typical LPM success stories. You probably know that in the most recent (2019) Law Firms in Transition survey (p. 22), Altman Weil found that the single most effective tactic for improving firm performance was “rewarding efficiency and profitability in compensation.”  So, in this next part of our discussion, I’d really like to focus on your firm’s new compensation system.  Changing compensation can be extraordinarily controversial, so I’d like to start by hearing about how you laid the groundwork.

A:  We actually started several years ago by creating a new committee that included members of our compensation committee, our partnership board, and other influential partners.  We made sure that we got a really good cross-section of different levels of seniority in our partnership.

That group then hired a compensation consultant who analyzed our financial data and interviewed over half of our partnership. They then brought all that information back to the committee to inform our strategy. 

At our partner retreat three years ago, we shared the results of the research interviews. The year after that we shared our new profitability model and financial dashboards.  At the most recent retreat, we launched new guidelines to align compensation with profitability.

Of course, there were some folks who pushed back and said, “Why rock the boat and create all this disruption and inevitable resistance for a system that's working great?”  The answer was simple: Just because we’ve been successful in the past doesn’t mean we’ll necessarily be successful in the future. It is better to align compensation with the behaviors we need for long-term success before we are forced to.

So, right from the start we discussed possible changes with compensation.  We heard what they had to say, and factored that into the development of our new system.  Since then, we’ve continued to provide them with information, so none of this is coming as a surprise to anyone.

Q:  What advice would you have for other firms that want to change compensation to reward efficiency?

A:  Plan for enough time to build consensus, and start with a widely-shared model for measuring profitability. Learn the basics of change management. Anticipate resistance. Engage partners in the process. Don’t make them feel like the change is being forced on them but rather that they are part of the change.

Q:  How does Stewart McKelvey define profitability?

A:  Profitability is a very difficult concept to wrap one’s head around in a law firm. The issues largely revolve around the idea that partners are both workers and owners. Is partner income a cost or profit?  Any profitability model must answer that question somewhere in the middle if it’s going to make sense.

The precise details of our approach are proprietary, but the model effectively answers the question “What is your break-even point?” for every timekeeper. 

For example, suppose I look at a particular client or matter and see that we're having problems with a fixed price deal based on significantly discounted hourly rates.  One possibility is that partners with high hourly rates are putting in more hours than necessary.  If junior partners, senior associates or paralegals might be just as capable of doing that work at a much lower price point, that would indicate that more effective delegation is required. But we don't want to be obsessive about using this one metric in every situation, because all the metrics have flaws. We think of our profitability model as a framework that helps drive better decisions, but it isn’t the only consideration.

If you look at the compensation submissions that partners have prepared and the feedback they provide on other partners, as well as financials, you can get a pretty good picture of how effective somebody is at client matter management and project management. It's not perfect, but it is a step in the right direction.

Q:  Can partners keep track of their personal profitability in real time?

A:  Yes, we’ve just launched a new automated compensation app along with a highly flexible financial dashboard system that we developed in-house that is uniquely customized to our needs.  Each partner can log into at any time and within a few clicks have instant access to eye opening trends and patterns that can lead to better decisions.  I had several IT developers working with me, and this will be the conduit for managing LPM activity, smart goals, and all relevant metrics.

Initially, partners build a practice plan in the app that tracks all matters a partner is involved in.  This goes beyond matters where you are the billing lawyer or the responsible lawyer.  It also includes matters that you’ve referred to colleagues or matters where you helped develop the business in some other way. Our compensation committee can also view your practice plan at any time with a click of a button on our home page.

In the past, compensation was based on dozens of different data points and written submissions.  This made it difficult for a partner to track their contributions in practice, and difficult for the compensation committee to assess their performance at the end of the year. Now it's all packaged up into a single application.

I'll also be able to work with partners in developing their plans and then check in with them throughout the year to see how they're doing. If our goal is to improve realization, revenue, or profit for a particular client, I'll be able to track in real time how they're doing with a couple of clicks.

Q:  Do you think this new app will change the way lawyers behave?

A:  Yes, I do.  I think too often what happened in the past was lawyers were just so busy doing the work and sending their bills out and writing off fees, that they didn’t understand the impact it had on the firm. And it's been an eye-opener to have these dashboards now that can be used to instantly diagnose a problem.  It is built around very compelling visuals showing downward and upward lines. 

I think a big part of becoming more profitable is not just about my team working directly with lawyers in LPM, although that definitely helps.  But, it’s also about building an increasing awareness of the impact of a reduction in fees.  In the past, lawyers too often thought, “What if I offer a 5% discount on a $100,000 matter?  It's just $5,000 off the total, so no big deal. The client gets a little value-add and a little reduced cost.”

But that $5,000 might eliminate half the profit on a particular matter. If partners don't understand the economics behind it, they’re probably going to make less than ideal decisions. And so, I think increasing the awareness of profitability metrics through this app will make a real difference.  We're talking about percentage increases in firm-wide realization as a result of these initiatives.

Q:  What do you have planned to further accelerate your LPM initiatives?

A:  This year we plan to follow the process recommended in one of the templates in the online fifth edition of your LPM Quick Reference Guide.  We’re going to organize a panel discussion of lawyers that have already experienced the benefits of LPM first-hand. We are targeting specific Client Service Team Leaders with large clients and asking them to sign up for our LPM coaching program.   Then we’ll get these people to champion the program and speak about the benefits that they've seen. And we're hoping that will drive even more usage of the app as we move into year two of this new compensation system.

Q:  So, between the new app and the new compensation system, your firm has created a huge incentive for lawyers to talk to you and your team and ask for LPM assistance.

A:  Yes, that's absolutely right.   We will be providing more coaching and rigor around LPM best practices.  This will be a critical part of effective matter management. And now lawyers will be compensated for changing their behavior, so the firm can continue to meet client demands in an increasingly competitive marketplace.

Q:  Are you currently seeing an increase in lawyers coming to you and looking for LPM advice?

A:  There’s no question about it. We’ve seen an increase because everyone knew these changes were coming.

Q:  Are you confident that the combination of LPM training, tracking profitability in the app, and changing your firm’s compensation system will boost profitability for the firm?

A:  Totally confident. Just the idea that we have successfully been able to realign our compensation system to reward certain behaviors is a hugely positive outcome for our firm.

I think we’re well positioned now to be able to drive more and more LPM activity, now that it’s factoring into compensation decisions.

      


Case Study: The benefits of practice innovation (Part 1 of 2)

By Tim Batdorf and Jim Hassett

This post is based on a recent interview with Paul Saunders, Practice Innovation Partner at Stewart McKelvey, which is Atlantic Canada’s largest regional law firm with over 200 attorneys in six offices throughout Nova Scotia, New Brunswick, Prince Edward Island and Newfoundland and Labrador.  His role includes planning, developing and implementing innovative technologies and systems that increase efficiency, profitability and client value.

Q: Let’s start with the big picture of your role and your team.

A:  I spent my first seven years at Stewart McKelvey practicing corporate law.  In 2015, I accepted the newly formed position of Practice Innovation Partner.  I report directly to our CEO and oversee our Legal Project Management and Pricing functions as well as our Practice Re-engineering Program.  I also support our Compensation and Profitability Alignment Strategy. 

Five full-time employees report to me:  two practice innovation lawyers, two IT developers, and a document automation specialist.  One of the practice innovation lawyers just joined our team a few months ago to focus on our RFP process, and we’ve already seen an increase in the number of RFPs that we're winning.   I also oversee dozens of process improvement and LPM projects involving approximately 60 of our practicing lawyers.

Q:  Have your initiatives had any measurable successes beyond RFPs?

A:  Yes, quite a few.  Easiest to see is our increase in realization.  When I look at a graph of realization at our firm over the last 8 years it looks like a “V.”  At a macro level, the firm-wide increases in realization began right around the time we started pushing LPM and increasing awareness of the impact that realization has on firm profitability.  I can also point to examples of specific client service teams that have seen improvements in their numbers as a result of our working together.

Q:  What other kinds of benefits have you seen from your approach?

A:  Overall, we’ve become far more creative in customizing our pricing to the needs of each client. We've recently developed a new profitability calculator tool that works hand-in-hand with our budget template. So, for example, we might estimate the amount of time Partner A is required to spend under simple, moderate, and complex scenarios.  But then we go on to ask, “What's our margin?  How much can we negotiate this fee given the history of volatility and variability with similar work? How can we use effective delegation, LPM and process improvement to increase profit?”  This enables us to realistically offer clients the fixed fees and cost certainty that many are looking for. And this, in turn, has led to more success in business development.

We've also developed automated documents and streamlined processes to reduce our costs.  In some cases, we proactively approach a client and say, “We’ve developed some efficiencies in this particular work area.  Are you interested in having us perform this work for a fixed fee of X?” Of course, in order to make sure that we make money on those fixed fees, we need to include the project management side of things. We track expenses and watch for situations where we are spending more than we bid.  When that happens, we diagnose what's happening and why, and then streamline our process.

While we have been offering ad hoc support to lawyers in Project Management for a number of years, we're now beginning to create more structure around LPM support in conjunction with some changes to our partner compensation system that have just taken effect this year. 

As a firm, we felt a need to put our money where our mouth is and say, “If you're embracing LPM, then you're effectively managing client relationships.  So, you will get paid for that, and here's how.” I think that’s going to be significant for many firm partners, and that’s why I think they’ll be reaching out to our LPM team for support.

Q:  Can you give me some current examples of a group you worked with recently and the kind of benefits they’ve seen as a result?

A:  Of course.  We do a lot of work with insurance clients who are particularly sensitive about fees.  They often require fixed fees and matter budgets, and in the past, this has sometimes led to high write-downs.  This is the area where we’ve gotten the most LPM traction to date.

Team leader Colin Piercey was an early adopter of our approach, and we put in place a standard budget with a prebuilt scope of work.  Colin and I worked together to create budget forms that his team could use, for example, for a relatively straightforward motor vehicle accident, a moderately complex one, and a more complex one.  It was a real success story in the sense that Colin was able to help billing lawyers in other offices change their behavior.

This is a great example, too, of where our firm has seen improvements in realization as a result of LPM.   I think that’s directly attributable to the fact that we're better at scoping.  We're not writing our fees off at the time of billing because we’re clear about the scope of the work, and whenever change happens, as it often does, we're reaching out to the client proactively.

Q:  It sounds like the group was developing budgets before, but the key to success was carefully setting the scope, tracking time, flagging changes, and then proactively talking to clients.  

A:  That’s right, LPM is not all that complicated.  It’s just a matter of paying more attention to details like scoping, which lawyers have traditionally ignored as they jumped right into the details of legal work. 

It’s also an example of how much I've bought into LegalBizDev’s approach.  As you know, I recently completed your Master Certified LPM Coach program, and I agree that it’s important for lawyers to use LPM to solve real-world problems.  Start small, get some wins, and always focus on addressing specific issues with specific clients.  Once key lawyers work with some simple new LPM tools and see the benefits, they become LPM champions who share their stories and lay the foundation for firm-wide benefits.  Don't expect that a day-long CLE-type LPM seminar will change behavior.  Don’t expect that lawyers will automatically become more efficient because they attended a seminar.  Work with them directly.  That’s the key.

      


What exactly is LPM? Here’s our definition

Though it is relatively new to law firms, project management has long been used by businesses to protect profits through predictability and efficiency. Their projects—from the design and production of a new line of jet engines to the acquisition and integration of a billion-dollar company—can reach nearly unimaginable levels of complexity, variability, and risk.

Professions from engineering to investment banking have developed a rich and deep body of knowledge about how to manage projects on time and within budget. Legal project management adapts these proven techniques to the unique challenges of managing unpredictable legal matters and disputes.

By our definition, legal project management (LPM) increases client satisfaction and firm profitability by applying proven techniques to improve the management of legal matters. Thus, we see LPM as an umbrella term that embraces a very wide range of management techniques, including pricing, communication, process improvement, and much more.

Others disagree. For example, the field of knowledge management (KM) identifies useful intellectual property created during past matters and then leverages that knowledge inside the firm through increased access and sharing. In some firms, LPM and KM are entirely separate departments. In others, LPM staff are part of the KM department, or KM staff are part of the LPM department.

However, if a management technique can help lawyers accomplish their goals, we say it is part of LPM. We believe that hair splitting over what is and is not LPM can become just another excuse to avoid action. Instead, law firms need to move as quickly as possible to the central problem addressed by LPM: What must we do today to meet client needs while remaining profitable?

We also include personal time management in our definition of LPM.  This field is not mentioned in many project management courses and texts, nor is it listed in the index of the Project Management Institute’s Guide to the Project Management Body of Knowledge, the bible of the field which is used to certify project managers in other industries. But for some lawyers, personal time management is a vitally important skill which can increase value and profitability. That’s why we include personal time management in our definition of legal project management.

Like Barbara Boake and Rick Kathuria, the authors of Project Management for Lawyers, we argue that “project management is a tool box—choose only what you need to most effectively manage [each] project.” (p. 14).  The key to success, we believe, is to find the “low-hanging fruit,” the management tactics that are most likely to help each individual increase value and profitability.

By our definition, any lawyer who has ever planned a budget or managed a team has served as a legal project manager. But what was “good project management” for lawyers a few years ago is no longer good enough. Clients are now choosing law firms based on their ability to apply a more systematic and disciplined approach that delivers more value more quickly.

      


The Top Four Facts Law Firm Leaders Need to Know About LPM (Part 2 of 2)

Fact 2: Experts disagree about the best way to define LPM (cont. from Part 1)

In defining LPM, we believe that lawyers must take a systematic approach that is closely related to the Agile approach to project management.  Stated simply, we encourage lawyers to use an iterative process that focuses on key LPM issues, one at a time, in their order of importance.

In an article entitled “Agile: A Non-traditional Approach to Legal Project Management,” Kim Craig, then SeyfarthLean’s global director of legal process improvement, and Jenny Lee, a senior project manager with Seyfarth, explained why Agile is particularly relevant to the legal profession:

Traditional project management focuses on robust, comprehensive, mandatory project documentation with lengthy project charters, detailed project plans, complex status reports and rigorous, formal change control logs… [But] the world of legal service delivery is fast-paced and unpredictable. In legal matters, we cannot possibly know everything that will be involved with litigation at the outset. Developing an overall strategy is generally common practice, but detailed, cradle-to-grave planning is impossible.[1]

Agile contrasts with the more traditional approach to project management which holds that every project should start with a well-defined plan.  Only after that is completed and approved do you begin working your way to the end, one sequential step at a time.  

The traditional approach is also known as the “waterfall” approach because progress is seen as flowing steadily from the top to the bottom (as in a waterfall).  It typically sees projects in terms of five key phases or steps such as:

  • Analysis
  • Design
  • Implementation
  • Testing
  • Evaluation

In some cases, firms have hired LPM Directors based on their “waterfall” project management experience in construction, government contracting, and other areas where traditional techniques are used and Agile techniques are not.  This has led to many stories of LPM Directors who could not or would not adapt to a legal environment, and who ended up working with the very small group of partners that were interested in project charters and Gantt charts.

So, if anyone tells you that LPM is defined by five steps such as analysis, design, implementation, testing and evaluation, beware.  They are describing the traditional waterfall approach, not the Agile approach which applies better to lawyers. As the old cliché says, “you won’t get a second chance to make a first impression,” and attempts to apply the traditional waterfall approach have set back the cause of LPM at many firms.

Fact 3:  LPM success requires long-term managerial support

In our work with hundreds of law firms, we’ve seen the importance of follow-up over and over again.  In every single case where we have seen a firm make significant LPM progress, it was led by influential partners or members of the executive committee who were strong believers in LPM.  In a few cases, we’ve seen LPM programs make an enormous amount of progress when they were led by a powerful internal champion, and then slow to a crawl when that decision-maker left the firm.

Many firms have individual lawyers or practice groups that are quite advanced in LPM, but in our opinion not a single law firm in the world can yet say that LPM has truly taken hold across the entire firm. LPM aims to change habits that have been reinforced over decades, and to help firms constantly adjust to evolving client demands.  Having long-term managerial support is critical to success.

Fact 4: Law Firm Partners Don’t Know What to Do Differently

According to Altman Weil’s 2019 Law Firms in Transition Survey (LFiT, p. 44), most law firm partners (60%) don’t know what to do differently, and that’s why law firms aren’t doing more to change the way they deliver legal services. That might also explain why most law firm partners (69%) resist most change efforts (LFiT, p. 44).

If you’re a law firm leader who wants to make positive changes at your firm, you absolutely must be able to demonstrate how things can be done differently, and with positive results. At LegalBizDev, we have been successfully coaching lawyers in LPM over the past decade. In this way, we help law firm partners become internal LPM champions who advocate for LPM by sharing their success stories with other lawyers at the firm.

This blog series was adapted from the fifth edition of the Legal Project Management Quick Reference Guide, an online library of LPM tools and templates which is updated twice a year.


[1]   Kim Craig's article originally appeared in the International Legal Technology Association’s (ILTA’s) December 2013 white paper titled, “Business and Financial Management: Wrangling the Wild Ride.”

      



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