The latest post from Jim Hassett’s blog Legal Business Development.
Inevitably, there will be times when competent and dependable team members will not meet your expectations, overlook an issue, or miss a deadline. The best way to respond to this is to provide corrective feedback: information about how behavior is perceived by, and is affecting, others. It is meant to lead to positive change. With it, you call their attention to what you expected versus what they delivered, and ask them to fix it now and improve next time. That way they learn, and you have helped them improve.
But, being human, it may be tempting for you to avoid the potential tension or conflict possible when you point out how another person can improve. You don’t want to seem picky or risk demoralizing another team member, and in some cases your current relationships with the other team members could be a complicating factor, particularly if they are senior to you. And no matter how sincere your intent is to help, it's easy for the recipient to feel personally attacked. This is compounded when you have some power over the recipient. Be sure to convey the message that you appreciate the good work they usually do, and approve of their basic attitude and skills.
When you see a need to correct someone, it is tempting either to:
Neither of those approaches is as effective as giving skillful corrective feedback so that they improve results next time and remain motivated, by following these guidelines:
Additional guidelines will appear in Part 2 of this series.
This information is being adapted for our online LPM tools and templates.
Law firm leaders who are interested in legal project management (LPM) should begin by focusing on these three central facts:
1. Clients want LPM
Any law firm that has responded to an RFP in the last few years knows that client requests for LPM are growing rapidly.
Even when clients fail to ask for LPM by name, the results that clients are looking for definitely fall under the term, including minimizing surprises and improving communication.
2. Experts disagree about the best way to implement or even define LPM
There is widespread agreement that clients want LPM and that it can pay off for firms by protecting business and increasing realization and profitability. But the field is so new that experts still disagree about exactly how it should be defined. These arguments have slowed LPM’s progress, as seen in this quote from an AmLaw 200 firm leader from one recent survey:
We were just at a board meeting last week where we were talking about whether we should do formalized project management training. My answer to that is obviously yes, we absolutely should. But first we need to agree on what legal project management is. (p. 89)
Here is the definition we’ve used for years: LPM increases client satisfaction and firm profitability by applying proven techniques to improve the management of legal matters. Note that this is a broad definition that embraces a very wide range of management techniques, including pricing, communication, process improvement, and much more.
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.
We argue that LPM revolves around improvements in eight key areas:
The key to success is to find the “low-hanging fruit”: The management tactics that are most likely to help each individual to increase value and/or profitability.
As Barbara Boake and Rick Kathuria summed it up in their book Project Management for Lawyers (p. 14): “project management is a tool box—choose only what you need to most effectively manage [each] project.”
This pragmatic approach is closely related to the Agile approach to project management, an iterative process that focuses on key 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:
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 complete 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:
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, Gantt charts, and tools like Microsoft Project software.
So, if anyone tells you that LPM is defined by five steps such as analysis, design, implementation, testing and evaluation, you should be aware that they are describing the traditional waterfall approach, not the Agile approach which we believe 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.
Another challenge in implementation caused by the controversy over definitions can be seen in the relative resources firms have devoted to two key questions addressed by LPM:
In a study based on interviews with 15 LPM directors we found that almost all of firms’ emphasis has been placed on the first question – pricing – rather than the second – management (p. 292). We believe this is a mistake. As we wrote in that study:
Interestingly, since completing that study we have talked to clients who have performed their own internal proprietary “gap analyses” to determine how to improve LPM, and reached this same conclusion: they need more emphasis on changing lawyers’ behavior. Of course, the financial side of setting budgets is important. But if lawyers did a better job of living within those budgets, and communicating with clients, the impact on the bottom line would be faster and more significant.
3. LPM is hard. Success requires long-term management support
In our LPM 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 fact, 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.
In our view, no law firm on the planet has achieved more LPM behavior change more quickly or more efficiently than Bilzin Sumberg, a Miami firm with about 100 lawyers.
Bilzin started several years ago with individual coaching for key partners aimed at creating quick wins. Based on their success increasing client satisfaction and new business, these partners became LPM champions who spread best practices throughout the firm. Practice group leaders are now required to report regularly to an LPM committee and to the managing partner about how they are applying LPM and what works best.
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.
As Bilzin Sumberg Executive Director Michelle Weber summed it up, “Applying LPM is a continual ongoing process. It’s all about modifying behavior one small step at a time.”
For a pdf of this post, plus additional related information, download our white paper The Keys to LPM success.
Five Questions Outside Lawyers Should Ask Themselves Before Submitting an AFA
In this third article in the series about AFAs, we discuss five questions that outside lawyers should be able to answer for themselves before submitting an AFA proposal for a litigation matter to a client.
First, outside counsel should ask herself why she is proposing an AFA for this matter. To be sure, AFAs are often beneficial—providing clients with predictability in litigation costs and simplifying the billing for outside counsel—but they are not without risk. For example, if assumptions underlying the AFA were not accurate, or if these assumptions change over time, the original AFA proposal may likewise be off base.
Thus, outside counsel should be able to articulate the reason for proposing an AFA as a pricing alternative. One common reason is client preference. Some clients, including many public companies, value stability and predictability in litigation costs, and seek to avoid unexpectedly high monthly bills. Other clients may prefer AFAs with success premiums to ensure that outside counsel has “skin in the game.” But if the client has not requested an AFA, this might not be a good case to propose one. Indeed, some clients prefer hourly-based billing. And some cases may be unusual or unpredictable enough to make an AFA inappropriate.
In short, outside counsel should discuss the AFA approach with the client, understand the client’s preferences and concerns, and structure the proposal to address those needs. While some clients are eager for AFA proposals, not all cases and clients are good fits for AFAs. If the client has not requested an AFA or the case is unusually difficult to budget with accuracy, this might not be the case to propose an AFA.
Second, outside counsel should ask herself how long she expects this matter to last. Outside counsel often has a sense of when or if a case might settle, depending, for example, on the litigation history of the opposing party and its counsel, and on the client’s historic preference for settlement versus trial.
Cases that are expected to settle almost immediately would probably not warrant an AFA. Cases expected to last longer, but to settle before trial, could be good candidates for AFAs. In those cases, AFAs provide predictability to clients without significant risk of diverging from the original budget estimate. Likewise, AFAs in cases likely to proceed to trial are often beneficial to the client, providing the desired predictability and stability of fees throughout the case. Those cases, however, present greater risk to outside counsel because over time, the budget assumptions underlying an AFA—formulated before litigation began—are more likely to prove inaccurate.
For all AFA cases, and especially cases expected to “go the distance” to trial, outside counsel and her client should discuss and document the original budget assumptions as well as the circumstances under which the AFA may be modified if the litigation diverges from those original assumptions. This will ensure that the AFA remains realistic and beneficial not only to the client but also to outside counsel.
Next, outside counsel should ask herself whether this proposal is a sustainable model for future matters with this client. Often AFAs are presented in response to requests for proposals. These are competitive bids, and, especially if this is an opportunity to work with a client for the first time, outside counsel might be tempted to present a low offer to beat out the competition.
If outside counsel hopes to build a lasting relationship with this client, however, it is important that the proposed AFA reflect a realistic case budget. Certainly, the AFA should reflect any discount the firm is willing to offer to obtain this matter, but it should not be unsustainably low. This proposal is likely to become a standard to which future proposals are compared. If the original AFA is unsustainably low, the client will be shocked when the firm presents a more realistic budget next time.
Thus, instead of presenting an unrealistically low proposal, outside counsel should talk through the AFA with the client to ensure that they are both working under similar budget and case assumptions. That common understanding, leading to a realistic AFA, will build trust needed for future engagements, and be more likely to lead to a long-term relationship.
Outside counsel should also ask herself how confident she is that the client will be reasonable in making adjustments to the AFA necessitated by changes in litigation circumstances. Unfortunately, litigation is not always predictable. A plaintiff may add claims or parties, and new issues may arise. If these circumstances were not accounted for in the original case budget, it may be necessary to alter the AFA. And if outside counsel is not confident that the client will cooperate in reasonably modifying the AFA, then an AFA may not be appropriate in this case.
To determine a client’s willingness to reconsider an outdated AFA, outside counsel should have a frank discussion with the client before litigation begins about the circumstances under which the AFA may be modified. Certainly, the outside firm should bear responsibility for meeting the original budget under the original assumptions. But if those assumptions change, for example if the plaintiff adds new claims, there should be a mechanism by which the client and outside counsel negotiate a modified AFA. If the client is not willing to include any such mechanism, or if outside counsel senses that the client will be unreasonably inflexible, an AFA pricing structure might not be the best approach.
Finally, outside counsel should ask herself whether she has a plan for building a team that will work within the budget. A good AFA is typically derived from an estimated case budget, calculated from the estimated number of hours to perform each litigation task.
To ensure success of the AFA, therefore, outside counsel should have a plan for building a team that can work within the budget. The plan should include training the team members about the budgets for each task, providing the team with tools for tracking their actual time spent and comparing it to the time allotted, and providing additional resources or skills to team members that have difficulty staying within budget. Counsel must also ensure there are tools to track the overall team’s progress as compared to the budget. These tools require mechanisms to track and report the hours expended versus hours budgeted.
Without a plan for building a team that can work within the budget and for tracking that progress, an AFA becomes difficult to manage and the risk of departing from the AFA increases significantly. Putting the necessary tools in place and training the team on the budget are essential prerequisites to entering into an AFA.
The authors are partners in WilmerHale’s Litigation/Controversy Department and IP Litigation Practice. This is Part 3 in a series of three related articles that have been adapted from Law 360 for the fifth edition of the Legal Project Management Quick Reference Guide. The Guide also includes three additional articles on this topic by the same authors.
Five Questions Every Client Should Ask Before Accepting an AFA
In-house attorneys routinely receive, review and compare Alternative Fee Arrangement (AFA) proposals and nearly all law firms regularly submit them, but the parties often do not follow a disciplined approach in developing a realistic budget. In this series of articles, we provide guidance to ensure that AFA proposals are meaningful and realistic to both the client and outside counsel. In this article, we discuss five questions that every client should ask the law firm before accepting an AFA proposal for a litigation matter.
The authors are partners in WilmerHale’s Litigation/Controversy Department and IP Litigation Practice. This is Part 2 in a series of three related articles that have been adapted from Law 360 for the fifth edition of the Legal Project Management Quick Reference Guide. The Guide also includes three additional articles on this topic by the same authors.
Five Questions Every Lawyer Should Ask the Client Before Proposing an AFA
Note: Most of the AFA principles described here also apply to transactional AFAs, but the details and examples in this series focus on litigation.
An Alternative Fee Arrangement (AFA) is frequently required as part of a law firm’s response to a client’s request for proposals to handle new litigation matters. In-house attorneys routinely receive, review and compare such proposals, and nearly all law firms regularly submit them, but the parties often do not follow a disciplined approach in developing a realistic budget.
The risks to clients of retaining outside counsel subject to a poorly constructed AFA are very real, while outside counsel have their own set of considerations regarding whether to submit a proposal. To help ensure that the interests and goals of outside counsel and their clients are properly aligned throughout a litigation matter—and stay that way—it is crucial that AFA proposals be intentional in their construction.
In this series of articles, we provide guidance on this issue to be sure that responses are meaningful to both the client and outside counsel. We will identify questions that lawyers, clients, and law firms should ask each other and themselves prior to proposing an AFA.
1. Why Is an AFA Being Requested?
Clients who request an AFA have various reasons for doing so, and it is the outside counsel’s role to understand their intentions. The first step in assembling an intelligent response to a request for an AFA is for outside counsel to be certain they understand the primary reasons that the client is making the request.
Most often, predictability is the key driver for the client. But, is it predictability regarding overall fees for the matter? Monthly fees? And/or both fees and costs? To correctly structure an AFA proposal, outside counsel must know the client’s primary focus, so if the client hasn’t articulated her intentions, outside counsel should not hesitate to ask.
In some cases, the client may be requesting an AFA simply to find the lowest possible price, putting the quality of the legal services on a lower shelf. Comparing AFA bids (particularly if they are fixed fee proposals) makes it easy for the client to obtain the lowest price service. If the client is accepting competing bids, that is helpful for the bidding parties to know. This insight is necessary for outside counsel to determine whether making the proposal is in the best interest of the firm. If submitting is not the right choice, the firm’s internal resources are saved; if it is the right choice, this information allows the firm to price the matter as attractively as possible to be competitive—again, making the process more efficient for both sides.
Other circumstances also exist: the client may be requesting an AFA to better align the incentives of outside counsel with the client’s own interests; or an in-house attorney may be requesting a proposal because it is required as a matter of policy by her employer, and she may not have a good understanding of the reasons for the AFA request.
Of course, and as is often the case, the reasons for requesting an AFA can include a combination of several of the above interests as well as others. No matter the circumstances, it is critical that outside counsel understand those interests prior to assembling an AFA.
2. Is the Client Able to Share Information Regarding the Value of the Matter?
Intelligently constructing an AFA proposal requires outside counsel to make numerous assumptions concerning what steps will be taken in litigating the case. Those assumptions should be based, in part, on the expected value of the case. If a case is expected to settle for a relatively modest sum, for example, the proposal likely does not need to assume that there will be significant motions practice during expert discovery. Further, the number of hours budgeted for written discovery should vary greatly depending on the stakes in the case.
3. What Outcomes Would the Client Consider a ‘Win’?
Learning what the client would consider a “win” is paramount in building an effective AFA proposal. Here’s why:
4. What Level of Involvement Does the Client Expect to Have?
A client’s level of involvement impacts not only the results of many litigation matters, but it also can impact the costs.
Sometimes clients can help to decrease the time that outside counsel must devote to a matter by undertaking certain responsibilities, thereby decreasing the budget used to calculate an AFA. For example, in-house counsel can add significant value, and decrease fees, by taking responsibility for developing the facts in a portion of the matter. Under such an arrangement, in-house counsel functions in part as another member of outside-counsel’s litigation team—and one who does not need to be budgeted for in an AFA. Similarly, some clients have robust internal procedures for collecting and conducting first-level document review or preparing first drafts of responses to written discovery requests. These capabilities should be accounted for when preparing an AFA.
On the other hand, while it clearly improves the team’s work product, frequent consultation with the client can also be expensive. Discovery correspondence with opposing counsel, for example, can take twice as long if every email is sent first to the client, revised based on client feedback, recirculated for approval, and then sent to opposing counsel. The drafting of motions and other papers likewise can take significantly more time when a client regularly suggests substantial revisions to drafts and/or there are multiple revisions prior to filing most documents. Finally, the time required for multiple calls with a client each week can quickly add up.
Whether a client’s desired level of participation in the litigation increases or decreases costs, it is important for both the client and outside counsel to understand the impact this has on an AFA.
5. Who Else is the Client Asking for a Proposal?
A last question that outside counsel frequently do not ask, but should, is what other firms are submitting proposals. There are key reasons for asking the question.
Asking who else is submitting a proposal may prompt the client to comment on her decision-making process for selecting firms as candidates for the matter. This can provide valuable insight into what the client’s goals are and how the client is viewing the matter at the outset.
In addition, knowing what other firms will be bidding can inform both the structure of the AFA that outside counsel submits and its packaging. If, for example, the other firms all have lower hourly billing rates than outside counsel, it may make sense to submit an AFA that proposes making a larger initial investment to obtain an earlier result, followed by a negotiated resolution, rather than an AFA that assumes the matter will be litigated through expert discovery.
There are, of course, many additional questions inside and outside counsel should address before accepting/submitting an AFA proposal for a litigation matter. Even with respect to the five questions above, there is significant complexity in translating the information received from the prospective client into a well-planned AFA proposal. We will touch on some of these additional considerations in the remaining articles in this series.
The authors are partners in WilmerHale’s Litigation/Controversy Department and IP Litigation Practice. This is Part 1 in a series of three related articles that have been adapted from Law 360 for the fifth edition of the Legal Project Management Quick Reference Guide. The Guide also includes three additional articles on this topic by the same authors.