Above and Beyond KM

One of the presenters is showing us a website his firm created. Originally it started as a knowledge management project in which they wrote a treatise and put it online on a subscription basis. This website includes links to and summaries of regulatory decisions, coupled with an excellent search function. In fact, the search engine is so good that lawyers working for the applicable regulator have stopped using their own system and now prefer to use this law firm’s subscription website instead.

The firm has recently moved the updating/maintenance of the site offshore. Lawyers in India now create the summaries of the regulartory decisions. The firm estimates that the cost of doing this offshore is about 20% of what they spent on comparable activities at home. While they had to do a fair amount of work in the beginning to ensure that the offshore lawyers produced high quality work, they are now very satisfied with the standard of work produced.

The firm considers this website to be a good means of generating revenue from a classic knowledge management activity.

Lessons Learned:

* They created the treatise in a very linear fashion. They have since abandonned this approach because they learned that their users prefer nuggets of information easily accessible by search.

* They installed Google mini to index the site and found this to be a stunning success.

* Search analytics show a huge variety in the search terms users employ. And, the most popular search queries are not what the law firm expected.

* The firm has used website analytics to understand better what their subscribers want and how they are using the site. They have then modified the site to meet subscriber needs.

In this session two seasoned law firm knowledge managers talked about how they bring KM to legal project management (LPM).

* LPM can be a Trojan horse. You may start by “just putting a little structure around” your work processes, but you end up by radically changing how we work, as well as the culture of the firm.

* LPM presents an interesting opportunity for KM. Start by focusing on the legal process and its improvement. Next, integrate KM content (templates, models, checklists, practice notes, etc.).

* One of the presenters has just shown us their truly impressive effort to (i) identify their low-hanging, repetitive, high volume work; (ii) document the matter workflow; and (iii) automate that workflow, with dashboards to facilitate good supervision and quality control. They have found a way to staff this work with flextime attorneys who work from home (on a different compensation scale), supervised by full-time associates and partners. Further, they have provided a dashboard that allows their client real-time access to see how the matters are being managed 24×7. To sweeten the pot, they are doing this work for the client on a fixed fee basis.

* When you bifurcate the high-end work from the low-end work, you may need different KM approach to support each type of work. That said, even high-end work can benefit from KM content and LPM practices that improve efficiency, reliability and quality.

* Practice Support Lawyers can play a crucial role in helping identify/document workflow and then provide content to make that workflow more efficient.

Some skeptical lawyers have wondered if Legal Project Management is a conspiracy created by law firm consultants. A few have used this as an excuse to bury their heads in the sand in the belief that legal project management is just a passing fad. For those of you who are willing to take a closer look, here are my notes from a presentation by two large law firms about their experiences to date with legal project management. While I’m not at liberty to identify these firms by name, I’ll call them Firm #1 and Firm #2 to help organize the notes below.

How Firms Implement Legal Project Management

* There is no single best way to start a legal project management effort. Firm #1 appointed a partner to do the early due diligence and planning for bringing legal project management to the firm. Firm #2 had a project management office sitting outside their IT department. (This is a key distinction.) Therefore, Firm #2 took advantage of the existing autonomy of their project management office by adding former practicing lawyers to its staff and focussign them on both legal process improvement and project management.

* Firm #1 undertook legal project management as a strategic initiative before its competitor firms in response to changes they saw in their clients.

* Firm #2 starts by identifying the components of a project. They also gather and maintain a great deal of matter data that they then analyze to find inefficiencies in their business processes that can be removed. Throughout, they focus on the client’s perspective of what constitutes “value.”

* Firm #2 has created a series of business flow diagrams/ timelines that indicate the tasks and phases of a matter. Each task is linked to resources in their document management system such as checklists, templates, etc.

* Firm #1 focused on one practice area that was particularly susceptible to fee pressure. This had the benefit of creating a prototype and good outcomes data that could be shown to other practices.

* Firm #1 works on a project at a time. They haven’t yet tried try to change business processes of the firm across the board. They aren’t as far along as Firm #2 and haven’t realized the same wholesale cultural change that Firm #2 has achieved.

* Firm #1 understands that lawyers have to overcome their reluctance to use task codes in their timekeeping. Task codes are important for clients, so it has to be important for lawyers. Firm #2 noted that task codes are critical for their legal project management efforts and to meet client e-billing requirements. Therefore, Firm #2 has made task codes mandatory.

Early Learning from Legal Project Management Efforts

* Focus first on your process and then think about the tools. While professional project managers may be accustomed to using MS Project, it rarely is a good choice for a lawyer facing tool. Both firms acknowledged that MS Excel can do a credible job for legal project management. In addition, there are some newer budgeting/project planning tools that can be purchased.

* There are several key benefits that Firm #1 has realized from legal project management: (i) it imposes a helpful discipline on the sometimes chaotic reality of matter management; (ii) it brings useful learning from other industries to the legal industry; (iii) it forces clients and their external counsel to have early, frank and continuing conversations about project scope and expectations; (iv) this dialogue improves the relationship between client and external lawyer.

* In Firm #1′s experience, legal project management done well can improve law firm profitability through leverage, volume and better processes. Firm #2 is finding that they now have the data necessary to provide accurate fee estimates. Further, their estimates often are lower. Critically, their profitability has improved despite these lower fees because they have been able to remove inefficiencies from their matter processes. This is a powerful result.

* Both firms understand that they ultimately need to tie compensation to process improvement. Neither firm has yet figured out how to do this properly, but are working on it.

Change Management Efforts

* Firm #1 started with a small planning group that had management committee support. Once they had a pilot, they consciously decentralized the process, brought in more experts (e.g., knowledge management) and pushed it out to other parts of the firm. They also have had participating partners tell their partners about the benefits of project management. These presentations are bolstered by the good data they have been able to gather. Further, their senior most partners have been very supportive and speak publicly about the benefits of the effort.

* Firm #2 confirmed that the key to their efforts has been been “support from the top” that has allowed them to “drive it through the firm.” The firm as a whole has adopted legal project management as a core competency for lawyers in the firm.

* Get as much feedback as you can from clients and then broadcast that within the firm. This helps emphasize that legal project management is here to stay and is not just a passing business fad.

The Role of Knowledge Management

* The first efforts at legal project management in Firm #1 were focused on translating traditional project management principles and methods for a law firm environment. This involved primarily professional project managers and partners. In retrospect, they should have involved their knowledge management lawyers earlier since they are skilled at preparing templates and checklists, identifying and improving business processes, linking existing firm resources into project documents, developing naming conventions that help bring order to matter materials, etc.

* Firm #2 has non-practicing lawyers in their IT department who help translate legal process and technology for the lawyers and technologists. They aren’t driving the legal project management effort at Firm #2, but are an important part of it.

[For more information on this topic, see my notes from a subsequent session on the role of knowledge management in legal project management.]

A Parting Thought: Susan Raridon Lambreth told the story of a presentation to a group of lawyers who clearly were resisting change and didn’t want to adopt either business process management or legal project management. One of the presenters told them that by failing to try to systematize their work, they were consigning themselves to living “as if they have a head stuffed full of post-it note reminders of small details.” You don’t have to be a devotee of David Allen’s Get Things Done to understand how stressful and inefficient this way of living can be.

Over the last few weeks, I’ve had the pleasure of hearing two presentations by Susan Raridon Lambreth of Hildebrandt Baker Robbins on the subject of legal project management. Her most recent talk was an overview of the state of legal project management, now that we are — according to economists — on the other side of the recent recession. Here are my notes on part of her most recent talk.

What’s Happening in Legal Project Management?

To be honest, it’s still early days for law firms. While many lawyers would like to treat legal project management like just another business fad (remember the total quality movement?), some firms are beginning to see the opportunities rather than the burdens in legal project management.

So what are firms doing?

* Demystifying legal project management — understanding that they have been doing some elements of good project management for years.
* Obtaining formal training on the basics of legal project management for partners and associates.
* Learning project management terminology so that lawyers can discuss matter management in a manner that accords with how their clients think about matter management.
* Adopting matter budgeting tools and, more radically, actually managing a matter to the agreed budget.
* Taking a look at some basic processes within a matter and finding ways to achieve incremental improvements.
* Hiring professional project managers to help partner manage their matters.

The big takeaway is that we don’t have to approach this subject as if legal project management is from Mars while law firms are from Venus. Rather, we should approach it as a more formalized way of doing better what effective law firms have been doing all along.

Over the last few weeks, I’ve had the pleasure of hearing two presentations by Susan Raridon Lambreth of Hildebrandt Baker Robbins on the subject of legal project management. Her most recent talk was an overview of the state of legal project management, now that we are — according to economists — on the other side of the recent recession. Here are my notes on part of her most recent talk.

Why Legal Project Management Now?

So what’s driving law firms to take a closer look (and even try) legal project management? First and foremost, increasing client demands for greater efficiency on the part of their external lawyers. Given the economic pressures on their clients, law firms are being asked to provide services “better, cheaper, faster.” In fact, Ms. Lambreth reports that many clients now expecting lower costs — not higher — year on year.

A second reason for increased focus on legal project management is the changing profit equation for law firms. Hildebrandt reports that there has been lower demand for traditional legal services and an inability to rely on rate increases to maintain profitability. Coupled with this, there has been increased price competition. Ms. Lambreth gave recent examples of unnamed major national firms that underbid much smaller regional firms in order to win a client engagement. Granted, these may be loss leaders, but they may well indicate a willingness of larger firms to be more creative with their pricing.

There has also been a major change in the role of procurement offices within companies. Law firms are reporting a shift to dealing more with procurement offices, as well as a significant difference in the way client procurement offices request legal services as opposed to how the general counsel requests those offices. In fact, some companies are electing to have chief procurement offices managing both the initial engagement and well as the ongoing management of the cost of an engagement.

This issue of management goes further. Clients are becoming more involved in the management of a matter. Many are insisting that legal services be disaggregated and then “right-staffed” accordingly. For example, start by breaking down a mergers & acquisitions matter into due diligence, Hart-Scott-Rodino issues and strategic counseling. (Obviously, you could break this down further, but this is sufficient for the purposes of the example.) Once this is done, the client might insist that the due diligence portion or HSR portion be handled by lower cost and/or specialized lawyers (inside or outside the firm).

What’s the Upside?

While these trends may be frightening, Ms. Lambreth was swift to point out some of the opportunities. For examples, the “lower value” work may be more amenable to leverage and standardized processes, resulting in improved profits based on lower costs and higher volume. Further, the increasing scrutiny of the components of matters can expose sources of risk that may have been hidden by traditional work methods. Now, we have an opportunity to see these risks clearly and then improve law firm processes in order to minimize these risks.

The emphasis on non-hourly billing (alternative fee arrangements) and legal project management also opens up opportunities for law firm knowledge management. As lawyers take a closer look at how they management their matters, they should begin to understand that enhanced lawyer training and better knowledge management should allow firms to deliver services in a more efficient, effective and safe manner.

Scientists have been warning doctors and patients alike about the dangers of over-using antibiotics. One of the biggest problems they see is that improper use of antibiotics has led to the development of drug-resistant bugs. Because these super bugs are becoming increasingly difficult to treat, they bedevil modern medicine.

Similarly, we find that there is a phenomenon that bedevils many law firm knowledge management personnel: change-resistant lawyers. These are the lawyers who really aren’t interested in learning about new ways of doing their work. They are comfortable in their routines and don’t want to budge. Even if you wax rhapsodic about the multiple benefits of the new thing you are proposing, they are likely to tell you why they would rather stick with the old thing they’ve been complaining about.

What makes lawyers so change resistant? Nothing as simple as too many antibiotics. Rather, I suspect it is a combination of some of the following factors: