December 04, 2019

lpm

As we approach the New Year, many of us make resolutions that we tell ourselves we’re definitely going to accomplish in the coming year to make ourselves happier, healthier, and wealthier. But all too often, we end up finding the time or energy to do only one of those things – or even worse, none of them. We tell ourselves, “It’s okay, I’ll definitely get to this next year,” but then somehow five years go by and we still haven’t joined a gym or even set foot in one!

Similarly, leaders within law departments and law firms are finalizing their plans (and resolutions) for 2015. According to the 2014 Altman Weil Chief Legal Officer and Law Firms in Transition Surveys, many priorities on both sides relate to the inside-outside counsel relationship – more specifically, efficiency and effective project management. According to the Chief Legal Officer survey, when Chief Legal Officers were asked what service improvements and innovations they would most like to see from their outside counsel, this was the response:

“…[A]t the top of the list are ‘more efficient project management’ chosen by 57% of CLOs and ‘improved budget forecasting’ selected by 56% of the top legal officers. The top improvement, selected by 58% of respondents, is greater cost reduction.”

Law departments say this is what they want, but ultimately, the onus is on the law firms to make this happen. If this were stated as a 2015 new year’s resolution for law firms, it would read something like: “Get LPM In Shape.” But what does that really entail? And what components should be the focus of an LPM “get fit” program?

Here are four steps for making sure that your firm successfully “gets LPM in shape.”

1. Clearly define what LPM means to the firm

LPM means several different things to different stakeholders within the legal ecosystem. To some, it means the initial process of planning out a matter, evaluating profitability and setting up a budget (a.k.a., pricing). To others, LPM means gaining transparency into matter-related data or performance (a.k.a., analytics). And to others it means defining the broader lifecycle of how matters should be defined, priced, managed, closed and reviewed – which is how we at Elevate tend to see it.Whichever way you see it, the following key components will need to be part of your firm-wide definition of LPM to gain successful buy-in from both your lawyers and your clients:

• Define the LPM framework and who will use it.
• Define what results/goals you plan to achieve – internally and for your clients.
• Define the software tools that will be used to support LPM.
• Identify and understand any potential impact(s) the LPM solution will have on your lawyers’ approach to their work.
• Define how success will be measured, the timeline/path for reaching it, and how success will be reported both internally and, as appropriate, externally to your clients.

If any of the above are absent in your initial definition and communication of LPM to the firm, chances are you will face significant challenges implementing LPM.

2. Develop and communicate a simple LPM Framework for your lawyers and clients

Think of your framework as being a simple 4 or 5 bullet checklist of what needs to happen on every matter where LPM will be applied. Yes, there may be details within that framework, but most lawyers will want to see a simple summary first. If they agree with the framework – and believe it is practical – they will be much more willing to explore its use and application.

Typical frameworks include the following “stages” for project and matter management:

• Define – the process and steps associated with defining the scope, goals, complexity and risk of an engagement.
• Plan – the process and steps associated with defining the who, what, how and pricing for the engagement.
• Manage – the process and steps associated with monitoring progress, risks and variables and escalating and resolving risk associated with each.
• Communicate – the process and steps associated with communicating key status, milestones or issues to internal teams and/or clients.
• Close – the process and steps associated with completing a matter and reviewing what worked and what didn’t.

3. Integrate an easy-to-use LPM software tool that does just enough to support your LPM Framework, and which the lawyers actually use

It’s often said that lawyers always have a hard time adopting technology. I think it’s the reverse: lawyers seem to have no problem adopting consumer technologies such as iPads, Dropbox, and Evernote, but ‘legal technology’ has a hard time adapting to lawyers. Simple is the new sophisticated; lawyers want to be in and out of technology as quickly as possible and expect it to do just enough – and no more than that – to help speed them through their day.

We recently saw the news that Thomson Reuters decided to pull the plug on Engage, one of the market-leading LPM software solutions. (Before I continue, let me say that we tip our hats to the Engage team for breaking down initial industry barriers and paving the way for innovation around LPM.) We have yet to learn what led to Thomson Reuters’ decision, but we imagine it may have had something to do with adoption rates among lawyers. No lawyers, no LPM.

LPM technology for any firm should meet the following minimum criteria:

• Supports all phases of the LPM lifecycle just enough to easily develop matter budgets and scenarios for pricing, keep track of status of the work, and escalate risks to the right people promptly
• Is easy to present, reflecting positively on the firm’s philosophy of practical LPM
• Is easy to use for both lawyers and clients alike
• Can grow and scale with the evolution and learning experience of practicing LPM

An interesting read on this concept is Antony Smith’s recent post on the perceived disconnect for LPM tools in the legal market. We agree that the disconnect may not necessarily be in the products but rather in how the products are being used at this stage of the game. For example, a sophisticated pricing tool may be fabulous for the pricing director but may not meet the status tracking and reporting needs of the firm. If it was purchased to support the pricing function as a piece of the LPM framework, such a solution may shine like a star. If it was positioned to support the full LPM framework, however, it will fail miserably for lack of lawyer adoption.

4. Demonstrate commitment, seriousness, and care

It’s important that the LPM initiative is sponsored by the most senior firm leadership. In addition to telling your lawyers (and clients) that your firm understands the importance of and is committed to LPM, they should make it clear that the firm is taking a serious and careful approach to successfully implementing LPM.

To pilot the framework, technology and results, focus on a specific scope of matters within a few selected practice groups. The pilot should last approximately 6 months and should be used to test, observe the challenges, then learn and adjust. In our experience, law firms that ask clients to participate and give feedback are generally more successful.

The firm’s internal communications should reflect its seriousness about the importance of LPM to its lawyers and clients. Frequent updates from senior leadership with specific milestones and wins from the program will let stakeholders know that “LPM is important to us” and that it’s not going away.

Are some projects still going to go over-budget? Probably. Is staffing always going to be perfect from start to finish of a project-managed matter? Unlikely. But effective project management initiatives at law firms have demonstrated that attempts to fix those issues during the course of engagements (i.e., before it’s too late) tangibly improve results for both the firm and its clients.

Now where did I put that gym membership application?