LEGAL PROJECT MANAGEMENT 101: INTEGRATING LEGAL PROJECT MANAGEMENT INTO YOUR PRACTICE

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1 LEGAL PROJECT MANAGEMENT 101: INTEGRATING LEGAL PROJECT MANAGEMENT INTO YOUR PRACTICE Presented by the American Bar Association Law Practice Division and Center for Professional Development

2 American Bar Association Center for Professional Development 321 North Clark Street, Suite 1900 Chicago, IL Submit a Question Visit to submit a question on the content of this course to program faculty. We ll route your question to a faculty member or qualified commentator in 2 business days. The materials contained herein represent the opinions of the authors and editors and should not be construed to be the action of the American Bar Association Law Practice Division or Center for Professional Development unless adopted pursuant to the bylaws of the Association. Nothing contained in this book is to be considered as the rendering of legal advice for specific cases, and readers are responsible for obtaining such advice from their own legal counsel. This book and any forms and agreements herein are intended for educational and informational purposes only American Bar Association. All rights reserved. This publication accompanies the audio program entitled Legal Project Management 101: Integrating Legal Project Management Into Your Practice broadcast on May 18, 2016 (event code: CE1605LPM).

3 Legal Project Management 101: Integrating Legal Project Management Into Your Practice Wednesday, May 18, :30 PM Eastern Sponsored by the ABA Law Practice Division, Center for Professional Responsibility and the ABA Center for Professional Development ABA LP Division - LPM Committee Committee formed in the Spring of 2015 Chair: David Rueff, Baker Donelson Co-Chair: Susan Raridon Lambreth, LawVision Group Co-Chair: Micah Ascano, Ballard Spahr Members include in-house counsel, law firm and consultant representatives Committee identified 8 initiatives which includes educating ABA membership on LPM, pricing, operations and ebilling For more information, visit our webpage at: D1

4 ABA LP Division - LPM Committee Today s session is the 1 st of 4 sessions in a series titled: Legal Project Management Series: Basics and Advanced Techniques for Business, Litigation and Change Management D1 Faculty / Introductions Gil Renee Cubia Senior Group Counsel Johnson Controls, Inc. Nadine N.H. Miles Project Manager, Practice Innovations Department Chapman & Cutler LLP David A. Rueff, Jr. Shareholder and Officer, LPO and Innovations Baker Donelson G1 N1 D1

5 Objectives At the conclusion of this program, you will be able to: 1. Explain why LPM is needed and how it supports a lawyer s ethical obligations. 2. Describe how LPM can be integrated into the practice of law. 3. Implement LPM at the initiation of a matter in order to more clearly define objectives and expectations with the client. 4. Implement LPM as the matter is ongoing in order to control timelines, costs and expectations. 5. Implement LPM at the conclusion of a matter in order to continually improve the relationship with the client and the delivery of legal services. N2 Polling Question #1 We would like to get an idea of the professional makeup of our audience. Please identify the role you serve in your organization. a. Legal Project Manager b. Practicing Lawyer c. Pricing or Procurement d. Other Legal Professional G4

6 What Drives Clients Crazy? 1. Poor responsiveness 2. Poor communication 3. Unnecessary costs or billing surprises 4. Lack of innovation 5. Inconsistent and confusing bills 6. Overstaffing Why Are We Here Today? Recognize inefficiencies in the practice of law and their root causes Understand the client s perspective and needs Identify tools to improve communication with your clients Develop processes that help you and the client control legal expenditures

7 LPM: What is It? A proactive, disciplined approach to managing legal work that involves: Defining, planning, budgeting, executing, and evaluating a legal matter; The application of specific knowledge, skills, tools, and techniques to achieve project objectives; and The use of effective communication to set and meet objectives and expectations Source: LawVision/LPM Institute LPM: Why Do We Need It? Greater predictability of costs and services Transparency of process Accountability of all participants Improve communications Client satisfaction Attorney / Law Firm Protection Improve business efficiency Improve quality of services and manage risk Better meet ethical responsibilities

8 LPM: What Are The Benefits? Linking to Value establishes a clearer link between the cost of legal services and the value those services add to the client s business Clarifying Expectations LPM techniques allow the client to define the successful outcome before work begins and enables the lawyer to design a more reliable estimate of the costs to achieve success LPM: What Are The Benefits? Staying Competitive the market places a premium on predictability, efficiency and cost control. Improved Front- End planning, estimating and management will help lawyers stay competitive Responding to Pricing Pressures value based fee arrangements threaten firm profitability unless they are properly priced and managed using a project management framework

9 LPM Sample Frameworks Baker Donelson Bearman Caldwell & Berkowitz PC s model Patent pending process and technology International Legal Technology Association (ILTA) Project of the Year award in August 2012 LPM Sample Frameworks Evaluating & Closing the Project New Legal Project Engaging the Client LawVision / LPM Institute model courtesy of Susan Raridon Lambreth Executing the Project Planning the Project Incorporated into an advanced training and certification program

10 Polling Question #2 When you engage with a client, how do you confirm your responsibilities? a. Standard engagement letter b. Statement of Work which includes out of scope c. confirmation d. Telephone conversation N4 Engaging: Prerequisites Engaging with the client prerequisites to an LPM implementation: LPM requires detailed information to be exchanged regarding the representation, so always complete conflicts clearance first if for new client, LPM evaluation should be conducted after conflicts clearance, but prior to the engagement if for an existing client, LPM evaluation will be a supplement to the existing representation if responding to an Request for Proposal (RFP) for legal services, LPM evaluation will be based upon any known information and included as a component of a response N1

11 Development: Stakeholders Who are the players at the Client: General Counsel or Chief Legal Officer Corporate Stakeholders Chief Financial Officer Business Unit Heads Senior Corporate Executives Compliance Function Procurement Function *** Consider those affected by the legal project AND those who can affect the project G.5 Development: Stakeholders Who are the players at the Law Firm: The Relationship Partner Responsible Partner Project Manager Associates, counsel, other legal professionals Non-lawyer professionals Financial stakeholders Technical & Administrative Support Staff G.5

12 Development: Stakeholders Collect basic information about stakeholders: Position Contact information Responsibility Level of authority Expectations G.5 Development: Stakeholders A more thorough analysis can be implemented for new clients or in large projects by using a Power / Interest Grid (Source: LawVision/LPM Institute): G.5

13 Development: Scope Why is scope so important? If the client is unsophisticated, they may need more information about the services, what to expect and the cost of services. Even if the client is sophisticated, they may make strategic or business decisions based upon your description of services and the estimate you provide. Without a clear scope statement, any estimate provided may be interpreted by the client as an all in estimate. Development: Scope ABA Model Rules of Ethics implicated: ABA Model Rule Scope [A] lawyer shall abide by a client's decisions concerning the objectives of representation and, as required by Rule 1.4, shall consult with the client as to the means by which they are to be pursued. ABA Model Rule 1.18(a)-(c) Prospective Client (a)... consults... about the possibility of forming a client-lawyer relationship (b)even when no client-lawyer relationship ensues, a lawyer who has learned information from a prospective client shall not use or reveal that information (c)...shall not represent a client with interests materially adverse to those of a prospective client in the same or a substantially related matter if....

14 Development: Scope A well defined scope should: 1. Describe the engagement 2. Identify the key tasks or deliverables of the engagement 3. Identify any time constraints or other contingencies 4. Identify whether or not there are there shared responsibilities 5. Identify whether or not any issues are out of scope Development: Assumptions Factual assumptions Facts assumed based upon information and statements provided by the agreements, pleadings or the client. Procedural assumptions Typical procedures that are customary for the case or transaction anything outside of these assumptions would not be included in the scope of work, such as appeals or new parties being added after discovery.

15 Development: Assumptions Administrative assumptions Matters outside of the lawyer s control such as the client providing timely and accurate information or third party vendors providing reasonable services. ** Assumptions should be communicated if the representation or an estimate is limited by the assumptions Development: Risks Foreseeable risks - common in standard practice: If not assumed by the lawyer, risks should be communicated to the client as qualifications on the representation or estimate and are typically referred to as "carve-outs. If assumed by the lawyer, they do not need to be communicated to the client, however, the lawyer may consider communicating assumed risks to the client in order to articulate the value the client is receiving through the representation or estimate.

16 Development: Risks Unforeseeable risks not anticipated Issues that neither party could have anticipated or predicted and are subject to the good faith of the parties to revisit the scope of the representation or estimate. Development: Out of Scope Issues or tasks that are outside of the lawyer's responsibility which may include: components of the legal representation, oversight of third party vendors, non-legal tasks or administrative responsibilities ** Out of scope has a correlation to assumptions and risks - i.e. additional work may be required outside of the proposal if an assumption proves to be untrue or to respond to risks that have been identified as carve-outs. When these issues occur communication is key!

17 Development: Success What is the client s definition of success? litigation (quick resolution, settlement or establishing precedence) transactions (expedited closure, negotiation, reduction of risk) staying within the client s legal budget predictable costs and no surprises transparency on-going communication metrics (cost per matter for a portfolio, appropriate mix of shareholders to associates, timeline to complete) G1 Development: Pricing What is the pricing arrangement with the Client? Hourly (or discounts, blended rates) Budget estimate (or collars up or down) Retainer (time frame) Not to exceed fee (strict budget) Fixed or Flat fee Success fee Volume discounts For more information on these models and when they should be used, see Chapter 7 of the ABA book The Power of Legal Project Management. N1

18 Development: Statement of Work A clear delineation of scope should be converted into a Statement of Work: Describe matter with detail Identify Client objective(s) / expectation(s) Identify high level tasks, key deliverables and milestones Identify shared and out of scope responsibilities Clearly identify any timekeepers involved or vendors required Identify assumptions, risks and constraints Identify the pricing arrangement and any parameters N2 Development: Client Reqs. Other matters to be considered from the Client perspective: Engagement Letters does the client require anything specific Guidelines for Outside Counsel provided by some clients to further define the parameters of the engagement Master Service Agreements agreement with additional terms governing the relationship Business Associate Agreements agreement with third party vendors (typically ediscovery) Ebilling vendors G1

19 Development: Communications Communication Planning: who on the client side should receive updates identify the content of periodic reporting method dashboard, telephone, , reports identify the frequency of reporting bills or otherwise clarify how to address emergency decisions how will changes be addressed consider the use of a RACI chart Responsible, Accountable, Consulted, Informed LACI Charts (Leading, Assisting, Consulted, Informed) D1 Development: Statement of Work ABA Model Rules of Ethics implicated: ABA Model Rule 1.0 (e) Informed Consent "Informed consent" denotes the agreement by a person to a proposed course of conduct after the lawyer has communicated adequate information and explanation about the material risks of and reasonably available alternatives to the proposed course of conduct. ABA Model Rule 1.1 Competence A lawyer shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation. ABA Model Rule 1.2 (c) Scope [A lawyer may limit the scope of the representation if the limitation is reasonable under the circumstances and the client gives informed consent. D1

20 Development: Statement of Work ABA Model Rules of Ethics implicated: ABA Model Rule 1.4 Communication (a) A lawyer shall: (1) promptly inform the client of any decision or circumstance with respect to which the client's informed consent, as defined in Rule 1.0(e), is required by these Rules; (2) reasonably consult with the client about the means by which the client's objectives are to be accomplished; (3) keep the client reasonably informed about the status of the matter; (4) promptly comply with reasonable requests for information; and (5) consult with the client about any relevant limitation on the lawyer's conduct when the lawyer knows that the client expects assistance not permitted by the Rules of Professional Conduct or other law. D1 Development: Statement of Work ABA Model Rules of Ethics implicated: ABA Model Rule 1.4 Communication (cont) (b) A lawyer shall explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation. ABA Model Rule 1.6 Confidentiality (a) (b)... (c) A lawyer shall not reveal information relating to the representation of a client unless the client gives informed consent, the disclosure is impliedly authorized in order to carry out the representation or the disclosure is permitted by paragraph (b). A lawyer shall make reasonable efforts to prevent the inadvertent or unauthorized disclosure of, or unauthorized access to, information relating to the representation of a client. D0

21 Polling Question #3 When you provide a client with an estimate of your fees, how do you develop the estimate? a. Prior experience and provide a lump sum figure (Top down) b. Evaluating similar engagements and provide a lump sum figure (Top Down) c. Develop a phase level budget (Top Down) d. Develop a task or resource level budget (Bottom Up) N3 Polling Question #4 If the client does not require a budget, will you develop one for internal use? a. Yes b. No N2

22 Development: Budgeting Budgeting objectives: Clients are more informed customers and are unwilling to accept cost overruns & over billing Clients want to be consulted before making changes that affect budget Delivering low delta actual-to-budget performance is a key driver of client satisfaction Accurate baseline budgeting is an important way of showing the client that you are delivering what you ve promised Legal Project Management in One Hour for Lawyers by Pamela Woldow & Douglas Richardson p.54 G.5 N.5 Development: Budgeting Budgeting approaches: Comparison budgeting Evaluating historical matters to identify the customary price charged for the services Assumes that the matter is comparable, all time was necessary and that the appropriate level of time keepers were utilized Phase and task code data can assist with comparative analysis D1

23 Development: Budgeting Budgeting approaches: Top down budgeting Developing a budget based upon a high level estimate for the matter or phases of the matter Requires experience to accurately estimate or guesstimate the cost of the engagement Less reliable than bottom up budgeting N1 Development: Budgeting Budgeting approaches: Bottom up budgeting Developing a budget by starting at a granular level to identify the tasks, activities or deliverables required Once tasks are identified, the resources and time estimates for the completion of the tasks are identified All task level estimates are then rolled up into an overall estimate for the engagement Requires more time to develop N1

24 Development: Budgeting Developing a budget: Should be complete and thorough Based on: Scope of the engagement / work Anticipated risks, assumptions & constraints Assignment of tasks: Appropriate resources Time estimates Should include collaboration with the client N1 Development: Budgeting G1

25 Development: Budgeting Developing a Work Breakdown Structure (WBS) Describe project tasks / phases in terms of the WBS Breakdown project into component tasks Orders and arranges tasks to maximize cost & time efficiency Shows dependencies tasks that cannot be started until prior task(s) are complete Development: Budgeting Developing a Work Breakdown Structure (WBS) Build a schedule of work Identify each component of the project State project milestones, activities & deliverables Consider using phases to manage workload Allocate resources for the plan Designate Human Resources Allocate Materials and Services Available tools: Templates Checklists

26 Process Improvement Lean is a process improvement methodology: Focuses on the identification and elimination of waste and non-value-added activities Promotes a process that provides: what is needed, when it is needed, and in the amount needed, with only the minimum materials, equipment, labor, and space. D0 Process Improvement The objective of Lean is to reduce legal waste: Legal waste is anything which does not add value to the client under an hourly billing model or which undermines a law firm's profit in a fixed or flat fee model Examples: Gold Plating - Overworking a matter or spending more time than is necessary on an issue or activity. Parkinson s Law - The amount of time necessary to complete the task is the amount of time available to complete the task.

27 Process Improvement Examples (cont): Overstaffing - The needs of a legal matter are not evaluated prior to assigning resources Incorrect assignments - Assigning a higher rate (or cost) resource to a task or activity that could have been completed by a lower rate (or cost) resource Unnecessary tasks - Tasks/activities are duplicative of work performed by other team members; conducted in error or due to lack of instruction; or team members make mistakes due to an error in judgment. Development: Pricing Converting a budget to a price: Regardless of the technique, lawyers must consider the value the client will receive before arriving at any estimate Select the type fee structure Identify assumptions Evaluate risks and whether they are a limitation on the proposal Confirm client preferences early in the engagement For more information on different types of pricing models and when they should be used, see Chapter 7 of the ABA book The Power of Legal Project Management. G3 N1 D1

28 Development: Budgeting/Pricing ABA Model Rules of Ethics implicated: ABA Model Rule 1.5 Fees (a) A lawyer shall not make an agreement for, charge, or collect an unreasonable fee or an unreasonable amount for expenses. The factors to be considered in determining the reasonableness of a fee include the following: (1) the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly; (2) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer; (3) the fee customarily charged in the locality for similar legal services; (4) the amount involved and the results obtained... G2 Development: Budgeting/Pricing ABA Model Rules of Ethics implicated: ABA Model Rule 1.5 Fees (cont) (b) The scope of the representation and the basis or rate of the fee and expenses for which the client will be responsible shall be communicated to the client, preferably in writing, before or within a reasonable time after commencing the representation, except when the lawyer will charge a regularly represented client on the same basis or rate. Any changes in the basis or rate of the fee or expenses shall also be communicated to the client... G1

29 Execution: Managing the Work Principle task of any Project Manager: creating effective teams and managing groups N0 Execution: Managing the Work To create a team that collaborates effectively, lawyers (as project managers) must ensure that: Members are clear about and agree with the team s goals Members know their roles and responsibilities within the group All members are allowed open communications Team receives, gives and uses the feedback provided N1

30 Execution: Managing the Work Monitor Budget to Actual spend: Avoid inefficient team members, duplication of effort, out of scope tasks, and client changes without approval Encourage use of daily tracker and activity logs Monitor and communicate assumptions and risks Available tools Dashboards Matrices N.5 Execution: Managing the Work Dealing with scope creep: Over the course of any engagement there will most likely be: 1. Client requests to change the original scope of the Statement of Work 2. Assumptions that prove to be untrue 3. Risks that will directly impact the Statement of Work N1

31 Execution: Managing the Work Controlling changes: Develop a strategy for managing change Changes in the scope of work Changes in the resources who are available Changes in the timing Tips for managing client expectations G.5 Execution: Managing the Work Using a change control log: Description of the issue Description of the team recommendation Client decision Decision implementation Project development plan updates N.5

32 Execution: Budgeting/Pricing ABA Model Rules of Ethics implicated: ABA Model Rule 1.5 Fees Any changes in the basis or rate of the fee or expenses shall also be communicated to the client... ABA Standing Committee on Ethics and Professional Responsibility This single reference does not mean that lawyers are free to change existing fee arrangements simply by giving notice to clients. ABA Model Rule 1.16 (d) Terminating any advance payment of fee or expense that has not been earned or incurred must be refunded upon termination of employment. Polling Question #5 What do you believe is the most important element of success for in-house counsel? a. Legal spend within budget b. Successful outcome c. Communication d. Avoiding surprises G4

33 Execution: Managing the Work Reporting or communicating progress: Is the billing statement all that is required? What information is required by the client or in-house counsel on a periodic basis? How will you communicate progress against the budget and changes? Be proactive! Are there any other metrics for success (mix, cost per matter, timeline, outcome)? G2 Closure: with the Client LPM calls for a systematic post-project review of: What went well What can be done better or eliminated Lessons learned What is worth knowing for other matters

34 Closure: with the Client Ask the client, How did we do? Elicit detailed feedback about the firm s performance Go beyond standard Client Satisfaction Surveys Systematically review the substance and process of the engagement Closure: with the Client Formal Informal Level of formality Quick conversation Lunch Written anonymous survey Formal sit-down Unfiltered notes exchanged Source: Aileen Leventon / QLex Consulting Inc. New / Distant Depth of relationship Deep/ Long-standing D1

35 Closure: with the Client 1. Quantitative Client satisfaction survey or evaluation At the conclusion, invite the Client to fill out an exit survey Use an online survey to encourage honest feedback 2. Qualitative - Client meeting re: lessons learned Best asked via interview Who should attend? Client, Lawyers, Non-lawyers, Other stakeholders D1 Closure: with the Client The evaluation can include questions such as: Did the legal team perform an early case/matter assessment and clearly communicate the goals and objectives of the engagement? Did the firm develop and provide a clear understanding of the scope of the engagement? Did the firm prepare a budget for the project and identify risks that could negatively impact cost? Did all team members return phone calls and/or s promptly? Did the lawyers resolve the key legal issues identified? Did the team deliver a high-standard of legal service? Did the firm provide appropriate staffing and resources? Did the firm deliver the required services in a timely manner? D1

36 Closure: with the Team Post-project team review meetings: Face-to-face brainstorming sessions Spark group discussion Elaborate key lessons learned N.5 Closure: with the Team Tips for Internal Project Debrief Who should attend? Lawyers Non-lawyers Other project professional and advisors? Other stakeholders? What points should be discussed? Tips for collecting & evaluating input Capturing reusable information N.5

37 Closure: with the Team Debriefs should review: Project challenges and issues What worked well and what didn t What areas should be improved Institutional recommendations Personal learning Identification of Knowledge Management opportunities N.5 Closure: with the Team Sample Questions for Debrief: What worked well on the project? How well did members of the team work together? What could each of us have done better? Were any of the client s expectations and goals not fully met? Why? Were project tasks completed in a timely manner? At completion, was the client satisfied with our performance? What templates, best practice documents, tools or techniques were developed that can be used in future projects? N.5

38 Closure: with the Team Sample Questions for Debrief (continued) Was the project properly scoped? How were changes in scope handled? Was the project properly staffed? Were there protocols for communication? Were the channels and modes of communications effective? Was the project completed on budget? Were could efficiencies be improved and cost savings been realized? N.5 Closure: Closing the Loop ABA Model Rules of Ethics implicated: ABA Model Rule 5.1 Responsibilities of the supervisory lawyer (a) A partner in a law firm, and a lawyer who individually or together with other lawyers possesses comparable managerial authority in a law firm, shall make reasonable efforts to ensure that the firm has in effect measures giving reasonable assurance that all lawyers in the firm conform to the Rules of Professional Conduct. N.5

39 Closure: Closing the Loop Review Client Feedback in a team meeting Who should attend? Lawyers Non-lawyers Other interested parties If the client was in any respect not fully satisfied, what should the firm do? Update resources and procedures Input reusable information to firm Knowledge Management system Formally close file N1 Is Technology Required? Project Management Information Systems Many larger corporate clients already implement software systems for ebilling and are now beginning to integrate LPM concepts Several web based project management systems are available for lawyers who are looking for a simple system Several software vendors have developed software applications which are specialized for LPM "No Tech" System Develop forms and templates which can be reused for project management implementation Scope statements / statements of work Budget templates Require periodic reconciliations to be provided against budget G.1 N.5

40 Summary of Our Objectives Objectives 1. Describe how LPM can be integrated into the practice of law 2. Explain why LPM is needed and how it supports a lawyer s ethical obligations. 3. Implement LPM at the initiation of a matter in order to more clearly define objectives and expectations with the client. 4. Implement LPM as the matter is ongoing in order to control timelines, costs and expectations. 5. Implement LPM at the conclusion of a matter in order to continually improve. What we covered 1. Identify a step by step approach and implement it. 2. Implement steps to collaborate with the client to clarify expectations. 3. Utilize a statement of work approach in lieu of an standard engagement letter. 4. Use a budget as a management tool to track progress and notify the client prior to making changes. 5. Spend a few minutes discussing the result with the client and identify areas for improvement; and communicate that information to the team. N1 Other Sessions in the Series Legal Project Management Series: Basics and Advanced Techniques for Business, Litigation and Change Management Session 2 - LPM Advanced - Using Legal Project Management In M&A and Other Transactions (Wednesday, June 29 th ) Session 3 - LPM Advanced - Using Legal Project Management In Litigation (Wednesday, July 20 th ) Session 4 - Legal Project Management Moving from Pilot to Adoption: A Change Management Process (Wednesday, August 31 st ) D1

41 More Information For more information about Legal Project Management, Budgeting and Pricing: Published in 2014 Authors are Susan Raridon Lambreth and David A. Rueff, Jr. Includes more in depth content, case studies from other law firms and software descriptions Questions? All attendees can submit questions via the chat feature on the webinar interface