The Change Management Challenge of Legal Project Management

Andrew Terrett (Director of Knowledge Management, BLG) and Joshua Fireman (VP and General Counsel, ii3) presented a full-day workshop on legal project management (LPM) at the Ark Group Legal Knowledge Management Conference (October 26, 2010). Here are my notes.

The presenters ran out of time — after a busy, information-filled day. So we ended the day with a brief discussion about Change Management and the other challenges of legal project management (LPM).

Change Management for LPM (courtesy of John Kotter)

1. Create a sense of urgency
2. Build commitment
3. Develop a sense of urgency
4. Communicate the change vision
5. Develop an organization to effect change
6. Deliver short-term successes
7. Consoliate wins and produce more wins
8. Institutionalize change.

Eight Common Errors & Their Consequences (courtesy of Andrew Terrett and Joshua Fireman)

1. Allowing too much complacency
2. Failing to create sufficiently powerful guiding coalition
3. Underestimating the power of the vision
4. Under-communicating the the vision
5. Permitting obstacles to block the vision
6. Failing to create short-term wins
7. Declaring victory too soon
8. Neglecting to anchor changes in the corporate vision

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The Role of KM in Legal Project Management

Andrew Terrett (Director of Knowledge Management, BLG) and Joshua Fireman (VP and General Counsel, ii3) presented a full-day workshop on legal project management (LPM) at the Ark Group Legal Knowledge Management Conference (October 26, 2010). Here are my notes.

Your Knowledge Management Department and Legal Project Management

It is not a given that legal project management (LPM) should automatically be handled by a law firm’s knowledge management department. In fact, there may be other departments in the firm that have an equal claim. Much depends on the kind of KM team you have — do they have the skill sets necessary to manage legal projects?

Issues to consider:
– Where is your KM team located?
— are you part of IT? Part of professional development?
– Who is on your team?
— legal drafters?
— legal researchers? librarians?
— professional support lawyers?
— content managers?
— internal consultants?
— change management experts?
– Does KM have a good reputation within the firm?

What are the economic drivers?
– To save money for our clients
– To improve law firm profitability
– To use law firm resources more efficiently

What does the future look like?
– Is there (or should there be) a “unified theory” of LPM, Lean Six Sigma, KM and Professional Development?

In the discussion that followed the presentation, it became clear that while KM can be useful in LPM, it’s not clear that KM would by right lead a firm’s LPM effort. At the end of the day, much depends on your firm’s structure and the KM personalities and skill sets involved. In most firms, KM can be very helpful to provide the materials and resources that help the lawyers meet a project plan more efficiently. However, unless your KM team includes the right legal matter expertise and the right personalities, you won’t be able to actually provide LPM services.

One practising lawyer in the room asked why were having a “philosophical, rather abstract” discussion about KM and LPM. My response? That desperate knowledge managers are searching for
a raison d’etre and hope that Legal Project Management will provide that.

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Typical Objections to Legal Project Management

Andrew Terrett (Director of Knowledge Management, BLG) and Joshua Fireman (VP and General Counsel, ii3) presented a full-day workshop on legal project management (LPM) at the Ark Group Legal Knowledge Management Conference (October 26, 2010). Here are my notes.

Typical Objections to Legal Project Management (LPM)

#1. Issues always arise in the course of a matter that result in scope creep.
– While this undoubtedly is true, LPM advocates say this highlights why it’s important to agree in advance what “done” looks like.
– It’s also very important to agree with the client upfront on a process for changing the scope of the project – how can it be done to ensure project integrity and a reasonable commensurate increase in cost and time.

#2. Legal matters don’t lend themselves to planning from beginning to end.
– Don’t try to create a comprehensive plan that covers everything from soup to nuts.
– Work with a much shorter planning horizon. For example, plan the work that must be done between now and the next milestone.
– Create plans for phases of the work, based on the firm’s experience of this type of matter.
– Be prepared to throw away the plan when the matter takes a sharp turn in an unanticipated direction.

#3. We’re already doing a lot of this…
– You may be doing all of this, but the planning process brings this to the surface. It makes implicit things explicit. In so doing, it eliminates the risk of problems arising from poor communication or training.
– Planning adds structure to what you are already doing and provides a common vocabulary for participants.

#4. Everything I do is unique… every deal is different
– REALLY?????
– As far as the presenters are concerned, this is a knee-jerk reaction from people who have not really spent enough time analyzing their work.
– Even if every detail is not identical from deal to deal, there is a good chance that there are common tasks (e.g., due diligence or closing mechanics). Identify those common phases/tasks and make sure you have processes to document and manage them.

#5. Project Management cannot be done int he context of a law firm/client relationship.
– Consider whether your client is already using project management techniques. If so, they will understand (and applaud) any efforts by their outside counsel to move towards project management.
– Find out if your client has an established project management methodology. That will help you understand better client work methods and expectations.

#6. There’s no suitable project management software for lawyers…
– Project management is not about the technology. In fact, there are lawyers who have successfully implemented LPM using nothing more than a series of Excel spreadsheets.
– Some tools to consider:
– MS Project, Primavera, Liquid Planner, On it, Swiftlight
– Budgeting software – e.g., Budget Manager, Engage, Feesability
– eBilling software – e.g., Serengeti
– Matter Management – Needles, Prolaw, Amicus Attorney

– “Use software as a tool. It should not replace critical thinking.”
– “The Apollo moon landings didn’t have MS Project….”

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ARK: Key Project Management Concepts

Andrew Terrett (Director of Knowledge Management, BLG) and Joshua Fireman (VP and General Counsel, ii3) presented a full-day workshop on legal project management (LPM) at the Ark Group Legal Knowledge Management Conference (October 26, 2010). Here are my notes.

Key Legal Project Management (LPM) Concepts

SCOPE:

– Scope is the work that must be performed. And, the key challenge is managing scope so that it doesn’t expand without specific agreement from the parties involved. In identifying the scope, distinguish between the “must haves” from the “nice to haves.”

– To identify the scope, start by breaking down the project proposed into its constituent parts: the phases/stages of the matter you’ve been engaged to complete. Then for each phase/stage, identify all the tasks that must be completed. And, importantly, identify those tasks that must be completed before other tasks can be started.

– Be sure you identify and understand risk points arising in your project.

TIME MANAGEMENT:

– Using prior experience, estimate how much time is required to complete each task. Then build in a cushion since necessary resources are not always available at the point the task must start. As part of this process, chart the “critical path” of the project. This means finding the longest path from beginning to end, assuming all subordinate tasks are completed.

COST PLANNING:

– To create a budget from scratch:
— Step 1: break the project into its component parts
— Step 2: assign resources to the project (each resource has a cost)
— Step 3: consider contingencies and then account for them

– Be sure you can access to historical data, because it can provide guidance on how your firm, your lawyers work.

– Be wary about providing “ball-park” estimates. They are notoriously inaccurate and lead to client unhappiness.

COST MANAGEMENT:

– Step 1: determine at what level of detail you will manage the budget.
– Step 2: ensure timekeepers enter their time regularly and in sufficient detail. (You need to be able to identify the individual tasks.)
– Step 3: compare estimate, cost to date, and remaining work.

RISK:

– Start by identifying the risks involved in the project.
– Then determine the probability and severity of the risk.
– In terms of risk planning, understand what must be done to mitigate, avoid, transfer or accept each risk.
– Realize that some risks may be hidden or unclear because the project’s requirements are unclear. In this case, can you identify likely risk triggers?

COMMUNICATION:

– Start early to plan for good communication — not only good communication with the client, but also good communication within the client organization and within the law firm.
– Understand upfront who needs to know what, when and how,
– Ensure there is a project sponsor
– Identify who is responsible, who is accountable, who needs to be consulted and who needs to be informed. Then, construct a communications plan accordingly.

QUALITY:

– There may be an inherent tension between how traditional project management defines quality (e.g., meeting requirements) and how lawyers and their clients define quality. What does this mean for LPM?

– Project managers are bedeviled by the “Iron Triangle” or “Triple Constraint.” There are three factors that we have to balance in every project — Time, Scope and Cost. You can’t increase scope without having to increase time and cost. Impose upon this triangle the incidence of risk and varying (and perhaps poorly articulated) definitions of quality, and then it becomes even more difficult to balance Time, Scope and Cost.

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ARK: Project Management

Andrew Terrett (Director of Knowledge Management, BLG) and Joshua Fireman (VP and General Counsel, ii3) presented a full-day workshop on legal project management (LPM) at the Ark Group Legal Knowledge Management Conference (October 26, 2010). Here are my notes.

Definitions:

Six Sigma = “a rigorous and disciplined methodology that uses data and statistical analysis to measure and improve a company’s operational performance by identifying and eliminating `defects.””

Lean = a set of principles, concepts and techniquest designed for the relentless pursuit of the elimination of waste. Toyota made this management approach famous.

Lean Six Sigma attempts to identify an efficient way to complete a set of repeatable deliverables.

It is very hard to apply these processes to an inherently unique task – although you can bring project management principles to bear.

Project Managment = “the application of knowledge, skills, tools and techniques to project activities to meet project objectives.” (Project Management Institute)

The practice of law is part art and part science:

– Art: people, management, negotiation
– Science: scope, time cost, risk communications, quality

Why doesn’t Project Management appeal to Lawyers?
– they weren’t trained for project management in law school
– lawyers feel that there are so many variables in the practice of law that it is hard to impose structure on it
– lawyers have not traditionally looked to the business world to find best practices to adopt
– lawyers enjoy the autonomy that comes with subject-matter expertise

The drive to LPM is accelerated by several forces, starting with the client’s need for budgetary certainty. In-house counsel are getting increasingly concerned about costs. They want value and they want budgets that are agreed in advance and then met or improved. They definitely don’t want cost overruns. Further, as law firms shift their focus from revenue to profitability, LPM will be an essential tool to ensure client satisfaction with appropriate margins for the firm.

LPM is not a magic bullet. Most projects do not meet the goals of on-time and on-budget delivery. However, without LPM the participants won’t know what exactly on-budget delivery means.

Planning is key. However, it isn’t a one-time effort. You don’t plan once and then just execute against your plan. Instead, you create a plan, begin to execute, manage and monitor, and then use your monitoring data to improve the plan as necessary.

At the end of the project, you produce not only the project deliverables to your clients, but also your project records, which become the project assets that remain after the client has moved on.

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The Role of KM in Legal Project Management

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.

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Real World Legal Project Management

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.

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Early Stage Legal Project Management

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.

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Legal Project Management Overview

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.

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