LegalBizDev

The latest post from Jim Hassett’s blog Legal Business Development.


LPM at Stinson Leonard Street – A course on defining scope and much more (Part 2 of 3)

By Jim Hassett and Jonathan Groner

After Matt Wahlquist, the director of practice management at Stinson Leonard Street,observed the course “How to Define Legal Scope and Negotiate Changes,” he noted that:

The course was extremely practical. We have had conceptual training before from other companies, but our lawyers are always looking for something they can use on a day-to-day basis, and that is exactly what this workshop provided. Some people put their lessons into practice that very day. After all, if we can decrease our write-offs as a result of improved upfront conversations on scope, those results flow through directly to the bottom line. A proactive five-minute conversation with a client can pay for itself very quickly from a return-on-investment perspective.

Co-managing Partner Lowell Stortz said that before the course was offered:

I was somewhat skeptical of the results, because we chose people for the workshop who already had some interest in and/or knack for scoping. It’s always easy to show progress when you start with someone who’s at zero; it’s much harder to show progress when you start with people who are already pretty good at something. At the suggestion of the course leader, three weeks after the course I sent an email to this group of accomplished, busy, successful lawyers and asked them to respond as to how they’d used it, if at all. Virtually all of them responded (and in a law firm environment that alone is amazing) with good insights.

One participant reported to Stortz that:

I have one client that I thought just wasn’t interested in LPM or scoping. But as a result of the workshop, I reached out to the client and engaged them in a conversation and it turned out that there really was a place for this. The training led me to give it a shot, not only from my side, but also inviting the client to think about it. This yielded some benefits right away.

Another participant, Scott Hecht, is an insurance litigation partner at the firm and head of the insurance department. He explained that at any given time he is responsible for managing dozens of matters pending for a particular client, although a group of other attorneys do the bulk of the work. He took the class because he wanted:

To enhance my ability to manage those matters, communicate effectively with the client, and maximize efficiencies in billing and other areas.

Each of these matters is a litigation matter or an administrative investigation. They are all somewhat similar in scope on the surface. The variation is based on the number and nature of opposing parties, counsel, witnesses, and documents in each case. What I took away from the scope course is the need to have a constant sense of the client’s expectations in each matter and the way in which external factors sometimes only known by our defense attorneys handling the matters can still substantially affect the scope of each matter. It’s a question of getting and keeping your ducks in a row for each of dozens of similar matters.

In this client organization, there are 30 or more people who are my points of contact; they all have different personalities, levels of experience, and expectations, and I need to be very responsive to all of them. I expect LPM techniques to translate to a better experience for my client contacts, which differentiates our law firm from others.

Course participant Paul Hoffmann, a bankruptcy partner, pointed out that the office of the U.S. Bankruptcy Trustee, which supervises bankruptcy matters nationwide, recently set forth a rule change that requires advance budgeting in all larger bankruptcy cases. Therefore, bankruptcy lawyers have a legal obligation in many of their cases to develop budgets in advance.

I took the course because I wanted to improve my ability to estimate fees and to draft engagement letters. This will help to reach agreement in advance with clients on nontraditional billing matters and also help clients draw up budgets on traditional hourly billing matters.

There are so many ways in which a lawsuit can change as it unfolds. There can be a change in parties, a change in issues, or there can be the need to document a settlement or an appeal.

The course did a very good job of telling us how to explain budgetary changes to clients so as to minimize any client concerns that might arise. And it also did a very good job of showing us how the billing attorney must meet with the entire team to discuss the budget and to discuss any budgetary changes that may arise as time goes on.

Tracey Donesky, still another course participant, represents employers in many types of matters, particularly both federal and state wage and hour suits under the Fair Labor Standards Act and other various employment discrimination claims brought under various state and federal employment laws. According to Donesky, the single most important fact about LPM is that:

Clients want LPM, so law firms will have to use it to increase client satisfaction and better manage their cases. LPM needs to be integrated into every aspect of every case. The course helped solidify in my mind the need for LPM from a client expectations standpoint.

Donesky has recently begun to use LPM techniques on a number of matters, including several for one firm client where she is lead counsel. She seeks to budget for each case 30 days in advance, working with partners, associates, paralegals, and other timekeepers on the file to identify what litigation activities are anticipated for the month ahead and then allocating estimated hours expected to complete such activities. This provides the clients who use LPM an estimated budget, which helps increase predictability and manage expectations in advance. While there is some level of trial and error to the process in these beginning stages, the hope is that over time and as similar cases begin to work through the LPM system and historical data is gathered, the budgeting and estimating process will become more predictable and precise. 

As Donesky summed up the experience to date, “The firm is only going to get better at this process as time goes on and more data is analyzed.” 

Part 3 of this series (coming March 11), will focus on additional efforts in the firm currently underway to improve LPM.

      


LPM at Stinson Leonard Street – A course on defining scope and much more (Part 1 of 3)

By Jim Hassett and Jonathan Groner

Stinson Leonard Street has nearly 500 attorneys in 14 offices, with major operations centered in Minneapolis and Kansas City. It was formed in January 2014 by the merger of two firms that had previously made independent commitments to legal project management (LPM), including educational presentations by several leading consultants, hiring LPM staff, developing a task code system to track the cost of work, and more.

When he became one of two co-managing partners of the newly combined firm, one of Lowell Stortz’s top priorities was to accelerate this progress:

LPM is a great tool to provide more value and predictability to clients. From the time I started practicing law over 30 years ago there have always been lawyers who were good at this. But we are now devoted to spreading these practices throughout the firm. For example, thinking through how you are going to break a matter into phases, how you are going to charge the client for each phase, and whether an alternative fee arrangement is in order really helps clients to see more clearly the value you can deliver. LPM also encourages us to strategically participate in a little risk sharing now and then, which only makes sense to the client and to us if we’re really transparent about what’s going on.

For example, we had one client that looked at multiple transaction opportunities every year, although not all of them proceeded to a closing. So we agreed to perform due diligence, up to the “go/no go” phase, on a fixed fee basis. We know that we did not recover our rates on the transactions that did not go forward, so there was a clearly identified value to the client when a transaction didn’t proceed. They spent less and had a lawyer’s help in figuring out whether to proceed. From our side, however, we had the opportunity to get a look at every new deal. We feel like we had more deal flow because we were willing to help them on the front end. What does that have to do with project management? We could not have set a reasonable fixed fee unless we properly analyzed our internal data and accurately defined the scope for the project.

The firm’s other co-managing partner, Mark Hinderks, explained the importance of this new area in a similar way:

Project management is just a term for some things that are pretty basic on the wish lists of clients. Clients want to know what something’s likely to cost and how long it will take. Assuming we continue to do good legal work, the better we are at those things, the happier clients will be. Lawyers have notoriously avoided being pinned down on cost and time, due to the potential existence of factors beyond their control. But in other businesses, such as construction, there can be delays or disruptions from matters beyond a contractor’s control, such as material shortages, unanticipated site conditions, poor weather, and more. Yet, professionals in that arena have learned to project time and cost in a reliable way while accounting for risk. Increasingly, we as lawyers need to do the same whenever possible.

A few months ago, when LegalBizDev announced a new half-day workshop entitled “How to Define Legal Scope and Negotiate Changes,” Stinson Leonard Street became the first firm to sign up.

The reason we developed this course was that in interviewing chairs, managing partners, and other leaders of AmLaw 200 firms for the book Client Value and Law Firm Profitability, we had heard over and over that defining scope was the single most important factor in LPM success. As one chair put it:

The critical issue is sitting down with the client at the beginning and deciding what their goals are with the matter. Is it getting it done quickly? Is it getting it done so that nobody ever brings a matter like this again? Is it getting it done in advance of the big merger on the books a year from now? There are all different considerations as to what will lead a client to think this was a successful representation. And the more you push your client to think through what they care most about, the better off both of you are.

And when scope changes as a matter proceeds, as it so often does, lawyers need to know when and how to talk with the client about the best way to proceed, rather than just jumping ahead now and sending a bill later. As a senior executive at another firm we interviewed put it:

We have people who recognize that the scope of a project has changed, but you would think they were 15 years old again and asking a girl to a dance. They never get around to making the phone call.

Defining scope and negotiating changes had always been important parts of our introductory workshop, “How to Increase Client Satisfaction and Profitability with Legal Project Management,” but after analyzing our research results, we decided it also needed a course of its own.

LegalBizDev Principal Gary Richards took on the task of developing a highly interactive workshop built around six hands-on exercises, leading up to an action plan designed to immediately change behavior in each lawyer’s practice.

At the time of the merger that formed Stinson Leonard Street, Matt Wahlquist, the director of practice management at the firm, had been charged with accelerating LPM progress and building LPM principles into lawyers’ day-to-day practice. When he heard about LegalBizDev’s new scope course, Wahlquist thought it was a great example of the “very practical approach” he had been looking for, and he helped arrange the first session, which was held last fall in Kansas City.

Fourteen attorneys actively participated in the workshop and 10 firm leaders sat in as observers. Their presence was living proof of the importance the firm places on LPM.

Both co-managing partners were among the observers because, as Mark Hinderks noted, the concept of “defining expectations clearly right from the start of each matter is critical. Very often, when there is friction between law firms and their clients, it is based on a disconnect between expectations and what actually happens.” This course was designed to minimize that friction by helping to clarify expectations upfront.

The post-workshop evaluations were extremely positive, with one participant calling it the “best presentation by a consultant that I can remember.”

Next week’s post will describe the specific benefits several participants achieved from the course.

 

      


Business development best practices: Work with others

This is one of a series of occasional posts summarizing the most important best practices from my book the Legal Business Development Quick Reference Guide which is now also available in a Kindle edition.

Business development is difficult, and it helps to work with other people who provide support through the losses, and help you celebrate the wins. One way to do this is to form a business development group. It could be your entire practice group, a formal committee including people from your marketing department, or just two or three lawyers who meet for breakfast once a month.

Keep the agenda simple. At the first meeting, each person should commit to action items for the next meeting. Then at every subsequent meeting, go around the table and have each person report what they accomplished since the last meeting and what they have planned before the next one.

Working with a group provides social support, increases accountability, and leads to steady progress. No one wants to go to a meeting and report that they have failed to follow up on all their action items. The simple fact that you know you have a meeting coming up will help spur you to action.

The results can be summarized in a simple report after each meeting. The fact that a report is being circulated will create a friendly competition and increase compliance. Nobody wants to be the person who has all zeros in their business development report.

The most reliable systems often put a staff person in charge of collecting the data (say, every Monday by noon), and publishing the results every week at the same time (such as Mondays at 5). The report should never be delayed to wait for an individual’s results. This week’s missing data can be filled in next week. And the phrase “missing data” in the report will help to ensure that the information will be supplied, sooner or later. Ideally, the reports should start with a clean slate every few months. Without this fresh start, once people fall behind, they are likely to stay behind and just give up.

But whether you decide to have written reports or not, the biggest challenge here is to simply make sure you keep meeting. Life is sure to intrude with your meeting schedule, and it is easy for these meetings to fade away after a few misses. Therefore, it can be extremely useful to include a non-lawyer (e.g. your marketing person) who takes responsibility for reminding everyone of the next meeting, and do everything possible to maintain a quorum. In a nice way.

For many lawyers, an even better way to proceed is to work with a professional legal business development coach.

On the other hand, working alone may not be as good as working with a coach or a group, but it’s a whole lot better than doing nothing. If you are one of those rare individuals who will continue to follow-up through sheer self-discipline, go for it. The important thing is to find a system that works for you, and to sustain it over the long term.

      


Tip of the month: Be cautious about sharing budgets

When some lawyers begin developing detailed budgets, they get so enthusiastic about their new approach to estimation that they immediately show these drafts to clients.  This can lead to problems.  Some clients immediately start challenging the hourly estimates line by line and use them to negotiate the total price downward.  Others treat this preliminary budget as a fee cap and refuse to pay bills that exceed the initial estimate.

The implication is obvious: Most budgets should be limited to internal circulation for as long as possible. This is especially true for lawyers who are just getting started on detailed budgets and are still learning how to increase their accuracy.   Share budgets voluntarily only after you have developed a track record of accurate predictions, and only when you have a trusting relationship with a particular client.

 

The first Wednesday of every month is devoted to a short and simple tip to help lawyers increase efficiency, provide greater value to their clients and/or develop new business. This month’s tip was adapted from the third edition of my Legal Project Management Quick Reference Guide.

      


A new alliance to improve pricing and legal project management

Press Release: January 28, 2015
Media Contacts: Scott Rosenberg, srosenberg@projectleadership.net, (312) 258-5318
  Jim Hassett, jhassett@legalbizdev.com, (617) 217-2578

Project Leadership Associates and LegalBizDev Announce a Strategic Alliance to Structure and Improve Visibility into Law Firm Pricing and Legal Project Management

CHICAGO, IL and BOSTON, MA.  Project Leadership Associates, specialists in legal business operations and technology solutions for more than 500 law firms and legal departments, and LegalBizDev, a leader in the emerging field of legal project management (LPM), today announced a new strategic alliance.

The two companies will collaborate with law firms to identify changes needed to succeed in today’s highly competitive marketplace. Through improvements in pricing, project management, and enhanced use of technology, law firms will be better able to provide their clients with increased value while protecting sustainable profit margins. 

The challenges that law firms face in this area have been documented in LegalBizDev Founder Jim Hassett’s recent book, Client Value and Law Firm Profitability, based on research interviews with 50 chairs, managing partners, and other leaders of AmLaw 200 firms.

To address these challenges, the two companies are now introducing Pricing Visibility℠ and Project Visibility℠ programs designed to standardize best practices and identify the processes, people, and technology that best fit each law firm’s needs and culture. The primary deliverables will be the development of playbooks and systems to be used in preparing bids and/or outlining the steps lawyers must take to manage matters throughout their lifecycle.

“We believe that over the next few years, effective pricing and project management will be the difference between success and failure for many law firms,” said Project Leadership Associates Executive Vice President Dan Safran. “We conducted extensive due diligence to identify tools that lawyers will actually use in developing pricing proposals and managing matters, instead of creating plans and processes that will sit on a shelf. We selected LegalBizDev as our partner in this venture due to their proven track record in helping lawyers to change their behavior and take action in these critically important areas.”

“People began talking seriously about legal project management just a few years ago, and to date our company has focused on getting firms started by producing internal champions and quick wins,” said LegalBizDev Founder and President Jim Hassett, Ph.D. “As the field began to mature, we were approached by a number of leading technology companies about forming partnerships. We declined them all, because we did not want to endorse a particular software solution at a time when both needs and products are changing rapidly. We were introduced to Project Leadership Associates through our joint relationship as strategic partners of Altman Weil. Once we learned about their history and approach and saw how they consulted to find just the right solution for each client rather than developing a single product which they attempted to sell to every firm, we knew that we had found the right partner for the next stage in LPM’s evolution.”

About Project Leadership Associates:  Project Leadership Associates (PLA) is the largest business and technology consulting provider focused on the legal market, in the United States. The company has consulted with over 500 law firm and corporate law departments in assessment and strategic planning, product selection, systems implementation, and operational improvement. With experience in all areas of legal practice and business operations, PLA’s seasoned consultants represent the “A-Team” of legal process and technology thought leadership and expertise. We are easy to work with, affordable to retain, practical in approach, and personally attentive. For more information please contact Project Leadership Associates at (877) 752-0451 or visit our web page.

About LegalBizDev:  LegalBizDev helps law firms increase client satisfaction and profitability by improving project management and business development. The company offers coaching, webinars, workshops, retreats, train the trainer programs, publications, and more to help each lawyer identify the action items that are most likely to produce immediate and practical results for their practice, their personality, and their schedule. Our behavior change processes help lawyers to make the best use of their limited time by quickly building on best practices from other law firms and other professions. For more information, visit our web page or call us today at (800) 49-TRAIN. 

      



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