“He’s about as predictable as a wasp on speed.”
This statement was made by legendary British sports commentator Sid Waddell about an erratic darts player, but it echoes the sentiments that general counsel have expressed about the law firms that work for them – especially when it comes to estimating the costs of legal matters. How many GCs have slept poorly before a board meeting at budget time? What must it be like to sit in that room and listen to fellow department heads present highly researched and detailed figures all the while knowing that the numbers in their own spreadsheets amount to little more than an educated guess?
Fortunately, things are changing. For the first time since the mid-1940s, Corporate Legal as an industry has united in demanding accurate budgets from outside counsel for services to be rendered. That is an important distinction, and a radical departure from previous thinking. Until recently, outside counsel have relied on the billable hour with little thought for estimating in advance the number required for a particular task or matter. In response, the industry has developed an arsenal of weapons, such as matter management and e-billing systems for reviewing cases and hours billed, but as Monte Malone, chief of Practice Management at Fulbright & Jaworski, observed at the recent Engage Legal Project Management Client Retreat, “all of these systems are rearward facing.“
And it’s true. Until recently, the industry has been focused on dissecting, examining and learning from actions that have already occurred, bills already submitted, settlements already made. How then are we to achieve predictability and transparency in matter budgeting and planning if we are concentrating on the past? How are we to look forward with certainty and stride confidently into the boardroom with solid facts instead of estimates?
Analyzing the past is very important, but with the increased demand for alternative and fixed-fee arrangements, the industry is finally taking those lessons learned and creating new, legal-specific software and business processes that provide numerous benefits, including:
- Predictability – Firms are utilizing previous matter history and/or precise matter templates to create very accurate plans for the complete lifetime of a matter, and as a result, very accurate and predictable budgets.
- Transparency – A thorough matter plan provides GCs with transparency throughout the lifetime of the matter. They know with certainty what activities will be undertaken during a specific timeframe and the expected run rate for that period. They can therefore make intelligent, informed decisions about the company’s legal spend.
- Structure – Repeatable, logical templates for various matter types have been developed in some parts of the industry and specific software/content providers. These allow for more straightforward and realistic comparisons within both law departments and law firms.
- Collaboration – Firms can offer GCs a window into their matter planning and budgeting process. New tools let them work directly with clients to make decisions about how the matter should be conducted, and offer insight into how certain trade-offs and choices affect not only the budget but also the progress of the matter over its entire lifecycle.
- Evaluation – Law departments may apply the same rigorous standards to all RFP responses or entrants in a beauty contest to have a true apples-to-apples comparison of proposals.
The term Legal Project Management or LPM has come to stand for the majority of these new tools and processes. In fact, LPM as a discipline has been evolving rapidly since 2007, and there are a number of consultants offering training in the principles of project management as applied to the specific needs of the legal industry. A growing number of firms have adopted LPM in some form, and several actively promote the use of project management techniques for budgeting and matter management on their corporate websites or in promotional materials.
In addition to improved business processes, a new class of software has emerged that links to a firm’s financial system, or to a law department’s matter management system. It serves as a central point of access to managers or attorneys. Dashboards, calculators and templates allow these managers and attorneys to quickly create detailed matter plans and budgets; assign personnel and even third-parties to various phases or tasks; and track progress on those assignments against budget and schedule.
All this has come about as firms struggle to meet the demands of corporate counsel, and in fact it is primarily law firms that are moving in this direction. However, general counsel understand the benefits of LPM, and some will use it to improve the service they get not only from outside counsel, but from their internal staff as well.
And so, with our new tools and techniques, we may not stop that pesky wasp from flitting hither and thither, but we may now accurately predict where he is going, and when he will arrive.
Published August 20, 2012.
