by
5 Essential
Legal Project
Management
Metrics Every
Law Firm
Should Track
The Jackson Reforms have not only impacted
on how litigation cases are run but have
brought into sharp focus the need for Legal
Project Management (LPM) of all legal matters
within the industry. LPM is aiding the shift
from the practice of law in the abstract to its
practice in the context of a business, whether
that is a firm’s profitability or a department’s
budget. It has become less about the letter
of the law and more about how cases are run
and costed, which can often predetermine the
success of a case nowadays!
Well, even before you consider the law behind
the case the following LPM metrics need
to be considered. We call these The Early
Questions…
And now with the industry focus on
client value and alternative fees, matter
management is being employed to maintain
service level commitments and key
performance metrics (KPIs) for both clients
and firms.
As a legal case can follow many paths due to
unknown changes and with few guarantees,
how can you the firm determine the most
efficient way to run a case?
www.newlands-horizons.com
The Early Questions
How can I conduct my client’s work efficiently?
How can I focus on my client’s business
needs?
How to avoid work the client does not
want to pay for?
I need to control and predict my costs!
I need to devise and meet schedules!
I need to manage the risks each projects
presents!
You will need to provide answers to the above
questions at the same as providing effective
legal services to your client!
© NEWLANDS HORIZONS (UK) LTD 2015. ALL RIGHTS RESERVED
by
Budgets &
Fixed Fees
Alternative (AFA) and fixed fees now mean
lawyers are faced with the need to be more
efficient in how they deliver legal services.
Firms are learning that succeeding without
cost overruns in AFAs means treating the
cases as projects, transferring project
management concepts into the legal world.
The good news is that within the scope of
AFAs there is enough variation to cover most
needs, and enough to provide firms with both
great incentives and risks. However, budgets
and fees/chargebacks, and their related
tradeoffs, can be a difficult conversation
without a structure to guide the discussion.
What every lawyer needs at their fingertips is
the following:
Your firm’s services accurately priced and
know exactly how much it costs to perform
those tasks.
Be armed with the right information to
price with confidence.
By automating pricing with LPM software it
can instantly solve AFA allocation per case.
By offering the client a range of pricing
options law firms can continue to make a
profit in spite of fees being fixed.
Have to hand the firm’s work/tasks/phase
codes.
Look at the corresponding hours and fix a
price to that type of work.
With a large enough population prepare a
probability curve. If you’re no statistician
the legal software can create this for you
when you input the correct data.
www.newlands-horizons.com
© NEWLANDS HORIZONS (UK) LTD 2015. ALL RIGHTS RESERVED
by
1
Cost Control
Law practices face mounting cost pressure.
Firms are now forced to manoeuvre within
the borders of a fixed or flat fee arrangement
whilst in-house counsel face reducing
budgets and growing needs from internal
clients. So, how to ensure costs do not
spiral?
www.newlands-horizons.com
Determine in advance with your client
a clearly defined scope in terms of costs
estimates.
Constant management of client
communication and expectations will
avoid the relationship being at risk later
on down the line when the case runs over
budget.
Use your client relationship skills to
negotiate what’s called changes in scope
rather than a hard cap. If the client is
insistent on capping the budget then you
will know to limit your work to within
those parameters.
© NEWLANDS HORIZONS (UK) LTD 2015. ALL RIGHTS RESERVED
by
2
Lowering
Risk
Professional liability insurance is one of the
most expensive overheads for most firms. When
underwriters set the rates for individual practices,
one factor they take into account is how well the
firm manages risk. LPM can reduce professional
liability risk in a number of ways:
Maintaining quality control of the work the
lawyer is performing
Meeting critical deadlines
Avoiding or quickly resolving fee disputes
with clients
Maintaining active, open and timely
communications with clients on all aspects.
It’s nigh on impossible to eliminate risk, so
the key objective here is to lower project risk
i.e. minimise the impact of unplanned events.
Risks will occur, however, what matters is how
you mitigate them and deal with them. It’s also
important early on to have a frank discussion
about what could possibly go wrong and the
steps to deal with each eventuality.
www.newlands-horizons.com
With that in mind you need to obtain absolute
clarity on the following questions immediately
following your first consultation with your new
client or case:
What is the client’s business problem?
What does it look like when solved?
What are the two or three critical success
factors?
What steps will most likely get me to the
solution?
How long will those steps take?
What is the client’s desired timeframe and
what is realistic?
What external factors such as court dates will
delay the case?
What are the conditions driving the client’s
satisfaction which will influence their
repurchase intent?
© NEWLANDS HORIZONS (UK) LTD 2015. ALL RIGHTS RESERVED
by
3
Time
We all know the phrase “time is money”
but did you know that as a commodity time
has become ever more valuable? Solicitors
cannot afford to misuse time and this is where
LPM comes into its own:
Delivery on schedule is critical and LPM
helps lawyers control or predict the time
spent, both cumulative time (hours) and
running time (schedule):
1. How long will each stage of the case take
to reach resolution?
2. What external factors such as court dates
will delay the case?
3. What is the client’s desired timeframe and
what is realistic?
www.newlands-horizons.com
Delivering the value that the client seeks
on schedule is also important.
By understanding the client’s business
needs and by asking key questions early
on, you the lawyer can increase the
timely value of legal services and increase
the value that the client perceives in your
firm or department.
© NEWLANDS HORIZONS (UK) LTD 2015. ALL RIGHTS RESERVED
by
4
Profit
Pricing strategy has become the buzz topic at
most partner meetings and protecting profits
is paramount. So how can you utilise LPM
to gain and maintain market share whilst also
getting your pricing management right?
Focus on what the client needs and the
client’s perception of commercial value.
What does the client plan to spend on this
legal matter?
Who has a stake in the outcome, and are
there clients within the client’s business
not directly visible to the case?
Keep an eye on who is doing the work. For
example, a matter may become less
profitable because a partner performed
some of the work instead of a junior
lawyer. Following LPM-related processes
will ensure that such situations
are accounted for within a firm’s case
management.
Always make a distinction between
a partner’s profitability to the firm versus
the partner’s client’s profitability to the
organisation.
www.newlands-horizons.com
© NEWLANDS HORIZONS (UK) LTD 2015. ALL RIGHTS RESERVED
by
5
Resourcing
(scheduling)
Once the cost and value of a matter has
been determined then the lawyer project
manager can assign appropriate resources
(staff) to the project and define a suitable
schedule. Resource allocation, scheduling of
critical tasks and regular reporting to all key
stakeholders can all be worked out with LPM.
This increased transparency increases the
likelihood of timely corrective actions being
taken should things start to unravel.
www.newlands-horizons.com
So, how do I execute LPM?
The most important tool of Legal Project
Management besides the framework for
organising the project and getting out in
front of its issues, is the automation
software.
With automation software, LPM guides
and builds on the tools and skills
experienced solicitors already have,
without expecting them to become
professional project managers.
As cost budgeting becomes ever more
complex the tools that software provide
and the speed with which they can be
employed cannot be substituted.
LPM systems are particularly valuable
for managing risk, sharing knowledge and
communicating within the team. In this
respect, they add both fiscal value and
timely value to any case.
© NEWLANDS HORIZONS (UK) LTD 2015. ALL RIGHTS RESERVED