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7.14.20: Council of Luminaries CLIENT-SIDE

Updated: Aug 21, 2020

The LVN Council of Luminaries is comprised of veteran thought leaders and pioneers in the business of law community. The objective behind assembling this group is to establish a brain trust of recognized, experienced and progressive leaders who can help interpret developments in the market, provide advice on how to successfully approach and navigate challenges, predict future trends and changes to prepare for, and to participate in targeted special projects to benefit the legal industry as a whole.

The below meeting was conducted primarily with the client-side group.

Legal Project Management

The first half of this week’s call was to answer the following two questions, which were posed by a member of the LVN Law Firm Luminaries:

  • Why is legal project management important to you, as a buyer of legal services?

  • What types of project management activities provide the most value to you?

Luminary 1 – There are different types of LPM. 1) Case related – where there is a project manager assigned to a particular litigated matter or a class action. 2) Or one who is attached to a longer-term project you might be co-owning with outside counsel.

We primarily use them to do project work, not so much litigation. Since we rethought our legal ops function a few years ago, nothing has been a bigger accelerator to close the gap between strategy and execution than LPM. Lawyers are not good at this. So when you bring in a professional in it’s a big accelerant, for example: Overall CCPA compliance and readiness. Sometimes they are embedded in the practice areas to manage particular projects on an ongoing basis.

On the case side, when law firms attach the function, it’s pushed matters to resolution faster than the lawyers themselves. When we set agreed upon timetables (ones that are not court-directed but are in our control), bringing matters to resolution works better when someone is incentivized and rewarded for doing so.

Luminary 2 – It would help to hire a firm for all the reasons L1 said. It’s more efficient, fewer gaps, less risk. But I need to see evidence that the firm is actually using the project manager effectively. Many times they say “we have this project manager,” but it’s more like they are proud they have it, but no evidence they are working on your matters.

Luminary 3 – It shows alignment. Many law departments have been pressured to run more like the other of the business units. That means a focus on project management., timelines, deliverables. So it shows an understanding of the client and that you are on the same page. Just like the pricing function: it’s becoming table stakes. But it’s also important to know how effectively they are using or managing this function. When we are pushed for tracking and budget, certainty, can they provide? Can they help us see a material change coming, so we can brief our finance folks and have our reserves set accurately, etc.?

Luminary 1 – LPM can be powerful on individual matters. Especially: 1) if we empower them to manage the budget and 2) empower them to keep the matter on track. A constant frustration with law firms is scope creep – when they get outside the lines of what I asked for. Good PMs protect against scope creep.

Also, we don’t always have insight into external factors or material changes that might require a change in scope. An LPM can set realistic goals and communicate.

Luminary 4 – It’s important to have documentation all laid out. If we can do scope of work for buying tires and oil and consulting services, law should no longer be an exception. A contractor at your home will be able to tell you what will happen when they’re remodeling your kitchen. There will be contingencies, and there will be surprises – something behind a wall. But you need to have a starting point.

Luminary 1 – If I want to do an after action review, I have documentation to see what went well and what went off track. Also, same if I want to go to the GC to show why fees shifted, what happened, etc. We can put together a nice capstone deck. PMs are much better at documenting that. A PM can also help to encapsulate the value delivered by the law firm in a representation.

Luminary 3 – They can tie the matter back to what was originally agreed upon allowing the PM to show the delivered value versus what was initially expected/agreed upon. They can provide this information that is infinitely shareable.

Luminary 4 – if the dollar amounts being spent is very high, sometimes even the law firm can’t explain why. They don’t document. So you have the initial starting point documented from the beginning.

Luminary 1 – And if you don’t do that at the outset and wait until the end of a matter, it becomes revisionist history.

Luminary 4 – Part of the problem in estimated cost is that there is no standard structure to track costs over time. The UTBMS codes are horrible. That’s what’s being used but it’s not being used consistently. Moneyball worked because the system was there, but it’s not in law.

Luminary 2 – I think it is but they don’t really use it. Because they don’t hire LPM and data miners.

Luminary 5 – I generally agree to what all have said, but I haven’t seen any proactive LPM that’s been meaningful. Every once in a while I get a great paralegal. I haven’t been impressed with what I’ve seen. We try do it in house.

Luminary 3 – That’s a miss for law firms. They should at least be able to offer After Action Reviews

Luminary 5 – But they shouldn’t bill for it.

Luminary 3 – Are we willing to pay for it?

Luminary 6 – It should be a cost of doing business it is equated to the library costs, access to the best technology tools a firm can have.

Luminary 3 – This is a big miss for law firms not to be out there and selling this value add.

Luminary 1 – It’s a two-way street. While firms need to be a lot better at documenting and applying the resources and saying, look this is what we’ve accomplished for you, it needs to start with us (clients) as we could be far better about setting what our objectives and our goals are in the beginning. If the PM resources are there in the beginning it helps to create a little more discipline on our side to clearly articulate what we are trying to do with this engagement and what success looks like for us because we rarely do that with enough accuracy for our law firms. So there is a little culpability there on both sides.

Luminary 6 – I agree. We don’t do a good job of articulating what our expectations are on the front end. But, I also agree on the concept that LPM is a cost of doing business, and if I’m ever paying for it, it would never be on an hourly basis. If I was in a position to convince a firm to add this type of offering, I would think the value add would be tremendous. For a firm to be able to articulate to its clients that we actually scoped this project, kept it within the defined perimeters, and this is the value we brought… I as a client am going back to that firm in the future and saying, “because of your ability to articulate your value, we are going to use you again.”

Luminary 3 – I have experience in the past with requesting 1 pagers from our firms – a brief summary of the engagement of a matter. They include: Our objectives, what we want to accomplish, the unique value proposition/why you should hire us as your law firm, and If possible, provide the quantifiable value that the firm is going to deliver to the company. The idea is to try to get to the ROI. It didn’t work well at the time. Part of the reason that the ROI delivered by law firms is dwarfed by that of a lot of management consulting companies because they are way better at telling us how great they are and what they delivered. I think LPM can help bridge that gap and get law firms on par. It only helps to showcase how valuable you are to that business client.

Luminary 4 – Law Firms that I have engaged with in the past are only willing to make these investments when there is a serious relationship between the firm and the corporation. When there is less of a relationship and the corporation has 10 firms bidding on work, firms are less willing to make serious investments in the relationship. When there is a solid relationship, we did have dedicated PMs working with us, dedicated platforms, dedicated metrics—we traded volume for support. It wasn’t billed separately – because the firm knew the volume of work involved and the firm was willing to make that investment.

Luminary 1 – Another thing we may want to point out to the firms is that there are times when firms say they are having with a difficult time controlling clients expectations or working with a difficult client, so when a LPM is involved, that LPM should look to get sign off on each the firm side and the client side. So, If I am signing off on that project plan, the LPM can come back to me and say, “this is your sign off, if you want the scope to expand, then let’s talk about what that looks like. Because you are saying we didn’t meet expectations and I believe we did based upon this project plan that you signed off on.” Again, there is accountability on both sides and firms can benefit by having these positive conversations with clients by holding clients more accountable.

Luminary 6 – It is absolutely beneficial to the firms to be able to say, “we were all on board.” And it’s not only important to sign off in the beginning but also when scope changes dramatically. That way the firm can come back and be able to say, “here is how the scope has changed and here is how that impacts timelines, fees, etc.” It’s the LPMs role to be able to point that out.

Luminary 1 – Absolutely, the LPM should be raising the issue if there has been a material change in the plan so we can reset and everybody needs to sign off on the plan again. That’s why periodic check-ins are important. It’s a win-win on both sides. I think we are preaching to the choir here but one point we need to make to firms is that this process is not all just for us (clients) - it is for the law firms, too.

Budget Issues and Timekeeping for In-House Counsel

We are entering budget season. What new challenges are we facing this year?

Luminary 5 – Budget is status quo – and as always, it’s hard to predict litigation. We have historical data but what’s coming in in two o months is impossible to know. It’s an interesting challenge we are facing this year – not truly related to the budget but conversations about the budget create this issue. The GC’s boss is now looking to have better insight into the internal costs to provide legal services to this business unit. In the past we’ve used org charts and you could come up with some numbers but the boss wants to understand on a per matter basis what are our costs. That’s new. Two years ago, we implemented a time tracker and we have about 80% compliance. I believe I can come to a solid number using the data I have.

Luminary 3 – How receptive were your internal lawyers to making this time tracking change? This topic came up here years ago and there was a borderline mutiny.

Luminary 5 – There was reluctance – but because we built an easy-to-use tool and revamped how the department looks at matters – we became matter centric – and we drove people to matters. We are working on 100% compliance. Now that we have management asking for this data, we are going back to those who have dug in their heels and saying that the process should only take seconds each day. If you wait and track your time weekly, it should take no more than 15 minutes in a week. We don’t ask them to track time in line-item, 6 minute increments, we are looking for data about what each attorney is generally working on. You can do it by hours or you can do it by percentages – we are not looking for uber precision.

The main things we need to do to drive consistent compliance are 1) provide more guidance on what is a matter and how granular we need to be to track time and activities and creating matters. There’s still confusion there but we’ve learned a lot in two years. 2) We have to provide context…there are some folks in the department who believe this is a “big brother” exercise, and it was NEVER that. It was always about transparency and trying to understand what people are doing to make smart business decisions. People need to know how to use the tool for their benefit.

During self-assessment time, our attorneys can pull their own data that recorded their various work products. During managers’ meetings, we can pull data to understand what the team has done overall and use it to define triggers for questions to ask the team. There are lots of other uses for this data that we are just beginning to understand. Now that the boss is asking for the analytics, we need 100% compliance so we can assign value to the work. We are working to provide context to the group in Q3-Q4.

Luminary 2 – When we did this, we explained that this process is not about job security, this is about making their jobs more valuable, and for career development.

Luminary 5 – This allows me to respond to managers who ask what an individual has been working on. And it allows the manager to allocate resources to create bandwidth for others. This is how it’s valuable to people.

Luminary 2 – We were able to use this data to move work to lower cost locations and the mid-level lawyers were able to become managers and they were able to do more complex work. Everyone loved it.

Luminary 4 – We tried this and the resistance was that the process it too administrative and takes too much time and I wasn’t able to tie it to performance reviews or bonuses.

Luminary 5 – We need to figure out a way to create incentives for folks.

Luminary 4 – Tie it to outcomes. What did you deliver? Did you help bring in revenue?

Luminary 5 – Once we have full compliance, we should be able to show the value of the individual to the corporation.

Law Firm Value

With the state of the economy, how can law firms deliver greater value under new ways of working?

Luminary 6 – How much can firms derive in savings if they start making some of the changes permanent? For Example, deposition prep. I think if I am managing a law firm, I would be thinking about how making depo prep and even actual depositions virtual can decrease costs. Also, do I still need 10 floors of office space? Can we continue with reduced travel? How do we use what we’ve learned during COVID 19 and carry that forward?

Luminary 3 – Are you asking, “How are we managing our law firms now? or How are we practicing law differently in this new environment?” What does it mean if we are doing virtual depo prep, etc., and how does that reduce costs? How are firms leveraging this new reality?

Luminary 6 – Not so much focus on how they are practicing law – if you feel as outside counsel that you need to conduct depo prep in person, you make a case for it. But we are doing full mediations virtually now. We have proven that we don’t need to meet in person every time and there are a lot of legal fees tied up in the logistics of how you practice law. So, it’s the logistics side that has changed dramatically. We have proven we can do this in a different way.

Luminary 3 – The clients are going to start asking “why” a lot more on things like if travel is necessary for example. I find that interesting that this touches on general expectations that we are setting for our law firms. It impacts billing guidelines.

Luminary 6 – If on the firm side, clients are requesting that you do things differently, will they reduce fees in some respects? What are they doing to reduce their own overhead? Such as office space and travel.

Luminary 3 – And, how are firms leveraging the additional time that they have because they’re not on a planes, trains, and automobiles. I was on a call yesterday where a firm was talking about how they are having their lawyers create more “touch-points” with clients. How often are you talking to your clients? How this is changing both the way law firms are interacting with clients and what questions clients are now asking of firms about what is necessary, what is nice to have, and what do we absolutely need.

Luminary 6 – We have a virtual pitch session recently and we did not have to pay for time and expenses to meet with the lawyers during this pitch. There are a lot of thoughts to be had post-pandemic.

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