Although there is a tendency to jump right into it new matter as soon as the client gives the go-ahead, that is the wrong thing to do. Not only from the standpoint of adequately serving the client and meeting client expectations, but it could end up being a financial disaster for the law firm (Read: client imposed discount/lower realization rate).

Patrick Lamb had a post on Legal Rebels this month that talks about a two-day program at which in-house and outside counsel addressed what each interprets their job to be in a legal relationship.  He then provides a number of bullets on what “some of the notes on the ideal future state from the inside counsel group” viewpoint included.

It struck me that the highlights of the two-day program covered by Lamb in his post were really all about project management. My colleague Jim Hassett, founder and president of LegalBizDev, has written the definitive book (3rd edition will be out next month) on the eight key issues that comprise legal project management.

So, what does the future look like?  Some of the points mentioned by Lamb are in quotes (with Hassett’s relevant key issues in parentheses):

  • “Detailed, succinct quality communications” (7. Manage client communication and expectations);
  • “Never having to review a bill/agreed fee and terms” (1. Set objectives and define scope, 4. Plan and manage the budget);
  • “Managing to a number” (3. Assign tasks and manage the team, 4. Plan and manage the budget));
  • “Both sides have skin in the game” (5. Assess risks [to client and firm] to budget and schedule);
  • “Outside lawyers understand what risks client is willing to except” (5. Assess risks to budget and schedule);
  • “Syncing legal approach with business perspective” (1. Set objectives and define scope).

The inside and outside counsel discussion mentioned by Lamb emphasized the importance of better planning, budgeting, execution and communications in their relationship. Legal project management clearly can do just that to improve the attorney-client relationship.

Food for thought.

This year at the Legal Tech conference the keynote address was by Jim Calloway, a law practice management guru, who serves as director of the Oklahoma Bar Association’s Management Assistance Program.  The highlights of his much heralded address on the future of law practice is now a podcast that is worth listening to. It runs less than 15-minutes.

Here’s a brief synopsis of what it contains:

  • Supply and demand is catching up with lawyers.  There are too many lawyers*, new law schools being created (with ABA scrutiny being “less than rigorous”) since they are money-makers for universities, and, most importantly, there aren’t enough jobs.  According to the upcoming book Failing Law Schools by Brian Tamanaha law schools are producing 45,000 new graduates annually, while it is projected that there will only be 25,000 legal jobs available per year through 2018; and
  • Technology is changing everything from online non-lawyer documents to virtual law firms.

So, what are smart lawyers to do?  According to Calloway:

  1. Pay attention to what is going on in the industry.  There is a new normal, and lawyers need to be tuned-in to trends (and reality I might add);
  2. Focus on legal project management and legal process management to be more efficient, and generate legal products/documents from “A to Z” to be at the ready— so lawyer time is spent on what is unique to a matter, rather than the repeatable routine; and
  3. Recognize and utilize the digital world in your workflow.  Although the paperless office never did (or will) happen, adopt more computer files on your network and Internet to be accessible to everyone who needs them, and so they are available remotely.

Bottom line: the legal world is changing in many ways, including downward pressure on fees.  Unless lawyers are more efficient (via project and process management), develop better systems to work smarter and in less time, and accept alternative fee structures (e.g., fixed fees) that work for clients and for lawyers, the new normal ain’t going to work so good.

And that’s where marketing comes in.  If lawyers accept the new normal and adapt to it, including with systems, document assembly and greater efficiencies, and let clients/referral sources/prospects know about it, they will be more successful in landing all the work they can handle.


*Sharon Nelson, president-elect, Virginia State Bar interjects that 22% of law students think it’s “a bad idea to be in law school” in light of the climate for jobs.

Lawyers have always done project management. They haven’t called it that nor done it in a systematic way. But if you’ve ever managed a legal matter (project) you have done project management, more so if you managed a team, worked within a budget, and on deadline. But, as I mentioned, it’s was likely done in less than an ideal or efficient manner.

Legal project management is more important today and needs to be more organized to meet client demands, and to increase value by creating greater efficiency, especially when working on a fixed fee.

The ole curmudgeon, Otto Sorts, tells a story over on Attorney at Work about a client who, – early in Otto’s legal career when he was explaining the many vagaries of practicing law due to uncertainties caused by the judge, court calendars, opposing counsel, and so forth – simply stated: "Son, that’s just plain bullshit" and went on to say that "life itself is complex and uncertain, but we live it every day, anyway.” In other words, stop whining and proceeded to show him how to “manage the damn project.”

So, Otto shares with us six logical steps he learned for doing so: (Our terminology is somewhat different at LegalBizDev for legal project management and is in parentheses)

  1. Define the project by identifying what the problem is through to the end result. (that is, what is the scope of the project and the client’s goal for the successful result);
  2. Identify steps from beginning to end. (specify activities with subtasks down to the lowest level resulting in a deliverable (e.g., draft document, complaint, interrogatories etc.));
  3. Determine the interrelationship and dependency for all the tasks and their deadlines. (which tasks could be performed concurrently, and which are dependent on completion of earlier tasks and thus sequential);
  4. What is needed in terms of information and resources (involving the team early in planning process to determine what is needed and to get team buy-in, assigning tasks and scheduling them based on team members capabilities);
  5. Eyeball what effort, expertise, and likely schedule the project will take. (using past experiences and lessons learned on earlier matters, involve your team in planning the timeline necessary for the project); and
  6. Periodically review and update the schedule and tasks due to changes in the circumstances. (watch for changes in scope that may impact the timeline and budget adversely).

At LegalBizDev, we would add a few additional factors; to wit:

  • A greater emphasis on estimating a budget based on the likely costs for each task;
  • More thorough analysis of the potential risks that could impact the project, and how they will be dealt with;
  • Greater communication and consultation with the client at all stages of the project from beginning to end; and
  • When dealing with fixed fees, greater emphasis on quality control.

According to Otto "(E)verybody’s talking about project management for lawyers these days. And I think it’s about damn time!” Amen, Otto.

Legal project management really is for real.  

Obviously, pricing is an important part of marketing your legal services. There is no question that price sensitivity is real; and that clients, particularly in these economic times, are feeling the pressure to minimize legal costs.

Some argue that the cost of legal services should be driven solely by what the client is willing to pay. That unfortunately is only part of the pricing equation. On Attorney at Work last week, there is an article that provides excellent insight into value pricing by Toby Brown, the Director of Pricing for Vinson & Elkins. His proposition is that there are three critical bits of information that a law firm should determine prior to pricing a particular piece of legal work.

  1. Understand the clients price sensitivities. Clearly one size (or fee) does not fit all situations. As Brown points out, a given piece of legal work may have a high value for one client, and lower value for another. I would agree with him that "the only effective way to understand the client’s value priorities is to have a direct conversation with them." The client is the only one that will know what the particular legal issue(s) means to them, or about the internal pressure they are under to reduce legal costs;
  2. Know what your costs (better still, your desired profit margins) are. Some would contend that it doesn’t matter what your costs are. The only thing that matters is what a client is willing to pay. That is total baloney. If law firms price their services under that reasoning, without knowing what their costs are, they won’t be in business very long. It may be correct that a client simply will not hire you for the fee you quote, but if you don’t know what your costs and profit margins are, you won’t how much you will gain or lose by taking the work. There may be good reasons for taking some work at a loss, and there are firms that do that to get their foot in the door for future work. But, without knowledge of your costs, you cannot make an intelligent decision as to whether to take the work or walk away; and
  3. Do some risk and reward analysis utilizing project management techniques. After you understand what a client’s price point is, what your costs are, and what your margin needs to be, the firm should then do some "risk and reward" analysis using project management tools that include risk assessment, understanding the scope of the work (what’s included, what’s not), the client’s goals, and a client communication plan for starters. As Brown says, “[T]he main point here is that the decision to take the risk and make the investment should be made with knowledge and awareness…”

The bottom line is that pricing should not only match the client’s value proposition, but the firm’s value proposition as well. A firm can’t “just accept the clients’ definitions of price and value absent your own costs and risks,” according to Brown. Concur in spades!

One of the key issues involved with Legal Project Management (LPM) is “assigning tasks and managing the team.” An integral part of that involves pulling your team together as early in the process to explain the goals and objectives, and plan the tasks involved in an assignment. [For more on the 8 key issues in LPM visit my colleague Jim Hassett’s web site and blog at].

What is the point?, you may ask. One of the benefits of LPM is that it can do wonders in avoiding the “vague assignment” problem in law firms. Bill Melater, who is the resident Dis-Associate on Attorney at Work had an entertaining piece last month about his vague assignment experience.

He was summoned to a partner’s office and told to “breakdown” a file. Without further explanation, he really didn’t understand what he was suppose to do with this task that was thrown at him with a three-hour deadline. Worse, the partner promptly went into the “Do Not Disturb” mode by closing the door and turning off his phone. That behavior may not be a problem for the partner billing by the hour (although clients’ attitudes are rapidly changing on that topic), but I can assure you that it is a BIG problem for a firm on a fixed fee. That behavior is a money loser!

First, Melater wasted time trying to figure out what to do and most likely didn’t get it right through no fault of his. Time wasted is a guaranteed profit killer, especially with fixed fee work. But, even with hourly billing the invoice may need be reduced (written down) or a portion written off due to the client’s refusal to pay for the excessive time spent on a file review – which BTW is the client’s way of imposing their own version of an alternative fee. See my post “Has the Hourly Billing Model Become An AFA?”

Project management is not only real in the world of industry and thus to many clients, but in the law world’s “new normal” it can and will drive law firms to be more efficient eventually. If your firm is not ready for legal project management, partners at least ought to understand the need to reduce write-downs and write-offs by being more thorough, and efficiently assigning work to younger lawyers. With clients demanding more efficiency, the more efficient a law firm becomes, the more successful they will be at getting more business.

In a telephone conference earlier today with a client talking about legal project management and alternative fee arrangements, I was struck by a statement by one of the partners on the call. Although he recognized clearly that AFAs, especially fixed fee matters, makes project management more urgent in today’s legal world. He went on to say that that even if the firm was billing on an hourly basis, the client was treating the fee as an AFA. WHAT? I was thinking, and then he explained: “With write-offs and write-downs, the client is imposing a fixed fee.” The client simply will not pay more than the figure she or he thinks is right. That fact shows up in the realization rate.

Today I also ran across a post on In Search of Perfect Client Service by Patrick Lamb that raised the question about how the realization rate according to Hildebrandt’s Peer Monitor Index (PMI) continues to decline. It seems that law firms merrily go about raising rates, while clients summarily go about paying less.

In part, here is what Lamb gleaned from the PMI:

“But that increase (in billing rates by 3.5 percent from a year ago) is marginalized by the fact that firms’ ‘realized rate’ — the rate they are actually paid by the client — reached an all-time low this quarter. Net collected realizations fell slightly, to 85.4 percent, which also represents an all-time low.”

He suggests that it would be better for a firm to have a sit down with clients and talk about NOT raising rates or even lowering them, if the client will help the firm with their realization.

Another option is for the law firm to become more efficient – whether on hourly billing or a fixed fee. That’s where legal project management comes into play. It can increase value for the client, and improve the firm’s bottom line.

As Lamb concludes: “But whatever firms do, simply doing what they used to do (increasing rates) is a fool’s errand.” Not to mention poor marketing.

Do you procrastinate in your practice by delaying drafting that motion, or answering those interrogatories, or reviewing your pre-bills? If so, then I’ll bet you aren’t doing much better with your marketing activities either. Right? Then you beat yourself up at the end of the day for failing to progress on many of them.

Well, Bill Jawitz has a simple tip or two over on Attorney at Work that may just help you to stop putting things off:

  • Take 15 to 30 minutes at the beginning of each day to plan your activities (actually, I prefer doing it the night before) and prioritize them. I favor doing my “To Do” list in mind mapping software. It is easy to move things around, including to the next day when I find I’m dragging my feet. I do find that I put things off less when I print out my map each day;
  • Break larger tasks down into smaller pieces. Many years ago I remember some advice suggesting breaking tasks down into fifteen to twenty minute segments as they were more likely to get done with shorter timeframes. For some things, that has worked for me. Further, it is good project management when you do break your work down into as many separate tasks as you can think of and that make sense; and
  • Another suggestion I personally recall learning some time back was to tackle the priority items first. However, in my case, especially when I am procrastinating, I have found that if a do a simple task first, it actually helps turn that small success into the motivation to undertake the tougher stuff. Hey, it works for me. Each to their own as the cliché goes.

I hope the pointers above can help you minimize procrastination in your law practice, AND in your marketing efforts. In planning your day, include a business development task or two among your action items. If you were thinking about taking a client or referral source to lunch, the easy first task is simply to pick up the phone and set a date. 

Many lawyers are reluctant to discuss money with clients upfront. I know when I practiced, it was a topic I would shy away from as much as possible.  But, in this day and age, that is less of an option. Clients are more demanding regarding what they will be charged.

Bob Denney has an article on Attorney at Work that talks about what you should do to assure that you get the fee you deserve. He states that most “fee challenges occur with either fixed or hourly arrangements…” With either arrangement, there is less likely to be challenges, if the law firm approaches client engagements utilizing legal project management (LPM) techniques.  What struck me about Denney’s article was how closely his suggestions come to the principles that I and my colleagues over at LegalBizDev offer as part of LPM training.  Accordingly, I have included LPM terms in brackets following Denney’s suggestions on how to avoid fee challenges:

  • Define the Desired Result [LPM: draft a Statement of Work (SOW) that includes the specific work to be done, what is not covered, and what client hopes to have achieved];
  • Determine the Fee Expectations [LPM: After identifying work tasks and budgeting for each, arrive at budget for the legal project];
  • Define the Steps Involved [LPM: create a work breakdown structure (WBS) to include each task and subtask and timeline for each];
  • Quote the Fee [LPM: plan and manage the budget for each aspect of the project, and discuss with client]; and
  • If Challenged, Never Cut the Fee [LPM: review all of the above with the client, and if questioned, explain more fully the SOW, WBS and reasoning behind the budget].

Of course, there is a lot more to LPM than just talking about fees, but it is an important part. To read more about LPM, visit and see how it can help your marketing efforts, as well as your bottom line.

It comes as no surprise that legal project management is a hot topic. What did surprise me was the emphasis it got in the recent 2010 ACC/Serengeti Managing Outside Counsel Survey Report released last week. The summary/press release I saw mentioned project management or matter management 12 times.

“Controlling spending on outside counsel remains the top priority for in-house counsel,” is the lead in. It goes on to say under highlights of the key findings:

“As controlling law firm costs has continued to grow as a top priority for corporate clients, in-house counsel are now requiring project management techniques and systems to obtain better value from firms, even as a condition for hiring and retaining them.” (emphasis mine)

Therein lies the marketing potential for those law firms that adopt legal project management techniques early on. So, what does LPM entail? In a nutshell, it involves:

  • Laying out the scope and tasks required in handling a matter in collaboration with the client;
  • Identifying specific tasks to be completed and by whom;
  • Planning and managing a budget throughout the process; and
  • Managing the quality, process, risks and changes while keeping the client informed.

It should be obvious that such management tools will help your firm be more efficient and provide greater value to the client. The end result, if this is all explained to clients and prospective clients upfront, is that your firm will be the one hired and retained over the competition.


P.S. A brief summary of the other highlights of the survey can be found either in the link above or in the Financial Post.

Patrick Lamb has this week a post about project management on his In Search of Perfect Client Service blog. Specifically, he comments on the Legal Project Management Quick Reference Guide written by my colleague Jim Hassett of LegalBizDev.

Pat reviewed a copy of the guide and endorses not only the importance of project management (particularly in light of alternative fees or what he calls “Value Fees”), but points out how badly lawyers traditionally have managed their matters. He is right of course, and the billable hour is the main culprit. Simply put, lawyers under a billable hour system don’t have to management projects efficiently. They only have to log their time, and the more they work, the more they make.

He goes on to conclude that the guide “is an exceptional piece of work that you will want to examine.” I concur of, course; and unashamedly (since I had no role in writing it nor share in the proceeds) recommend it to you for your firm.

Oh yeah, I almost forgot, my main point here is that with better project management, you will have a bunch more time to get out there “focusing on low hanging fruit and seizing early wins to demonstrate the value of this skill set.” Now, that is a business development idea worth pursuing.