The latest post from Jim Hassett’s blog Legal Business Development.
Just about everyone agrees that legal clients are demanding greater value these days. But what exactly do clients mean by “value”? As a senior executive from one AmLaw 200 firm summed it up in my research for the book Client Value and Law Firm Profitability:
While there will always be individual differences between clients, it is useful to start by knowing what clients in general mean. Altman Weil’s recently published 2015 Chief Legal Officer’s (CLO) survey provides significant insights into this issue based on answers from 258 CLOs. (Full disclosure: Altman Weil is a strategic partner of LegalBizDev, but I’d write about these findings even if we weren’t.)
From the law firm point of view, I think the most interesting question was “Rate the value to your law department of the following things law firms can do to better understand your organization.” Here are the results:
* On a scale from 0 (no value) to 10 (enormous value)
If you are involved in legal marketing, it would be interesting to rate the time and money that your firm devotes to each of these ten items. In my experience, most marketing departments are investing heavily in exactly the wrong things: numbers 8, 9 and 10 (the old marketing), instead of numbers 1, 2, and 3 (the new marketing).
Four of the top five items are examples of legal project management. As I noted in my recent article for Bloomberg BNA’s Corporate Counsel Weekly “Why Law Firms Must Change their Marketing Priorities”, a few firms are headed in the direction of putting more emphasis on LPM, but most have not yet adapted to the changing needs of the marketplace.
Another important question in this year’s survey asked: “Of the following [ten] service improvements and innovations, please select up to three that you would most like to see from your outside counsel.” The top three, according to 258 CLOS, were:
It is worth noting that this question has been asked for the last several years, and these have consistently finished as the top three. Since LPM leads to #1 and #2, and is the very definition of #3, I like to sum up the results by saying that what clients want most these days is LPM, LPM, and more LPM.
How well are law firms doing in meeting this client needs? Not very well. When CLOs were asked “In your opinion, in the current legal market, how serious are law firms about changing their legal service delivery model to provide greater value to clients (as opposed to simply cutting costs)?” On a scale from 0 to 10, the median rating (with half the firms above and half below) was 3. These results were almost identical to last year’s, so despite all the press releases law firms are putting out trumpeting their successes in increasing value, clients have not been impressed by the results.
The complete survey includes a great deal of additional information on law departments, and can be downloaded for free. Now that’s what I call value.
As noted in Part 1 of this series, every lawyer at Hanson Bridgett had the option of adding an extra month of coaching to the standard program. Catherine Johnson, who has more than 25 years of experience in environmental litigation, counseling, and compliance, took this even further in her coaching with Gary Richards. As part of Hanson Bridgett’s first group that experimented with several options, she completed just one month of coaching in 2013. Two years later, she applied for a supplementary program and ultimately completed five additional months with Richards.
Johnson says the LPM training has substantially changed her day-to-day practice of law.
“For every new client matter, I now develop a brief paragraph summarizing the strategic objectives,” Johnson says. “I give it to the client for review before I begin the project. For two matters now, through this process I have been able to identify different priorities that were not self-evident in my initial conversation with the client.”
Then Johnson develops a matter plan with detailed descriptions of the tasks involved, an estimate of the hours for each task, who will conduct the task, and when the task is due. She shares this plan with everyone on the team. Thus, she is better able to anticipate what steps must be taken to complete the project.
Johnson says this technique “is particularly helpful in working with others, since there is less misunderstanding about when projects are due and how it all fits in to the big picture. Additionally, team members can plan their own time better.”
In order to best take advantage of these tools, Johnson has been talking to the firm’s IT department about developing a simple “Client Toolkit” for each project so that she can have the Excel charts and forms in one place for each client. She is also looking into the most efficient way to consolidate her matter plans and develop a master schedule, ideally with a weekly schedule printed out at the beginning of every week.
In addition, Johnson says, Richards helped her develop a new AFA product for consultations for contaminated properties by showing her how to plan for it – identifying, for example, the tasks that must be done sequentially rather than concurrently, how to account for every significant piece of time that will be involved to minimize the possibility for error, and how to give a business perspective on a legal project.
“This product will be launching soon on a pilot study basis,” Johnson says, “and whether it is successful or not as an AFA product (and I think it will be) the planning and marketing can be used for other non-AFA products to provide more efficient service to our clients.”
In summary, Johnson says, the idea of LPM gets “a huge thumbs up from me.”
“Not only has this been useful to me, but it has really been fun,” she says. “I wasn’t expecting that. At a certain point, after almost 30 years of practicing law, I thought there wasn’t anything much new for me to do or learn. Now I have new goals and objectives, and every day I think about how I can improve what I do and offer better and more cost-efficient service. It is something new and something creative, so I feel energized and engaged.”
In our LPM programs for a wide variety of firms, ranging in size from eight lawyers to over 4,000, we have consistently found that the most effective way to change LPM behavior and build momentum is for motivated attorneys to directly experience immediate benefits and then become internal champions who spread the word, just as they did here.
Our most successful programs, like this one, have also had another factor in common: senior management made a continuing commitment to building on initial success and adapting the approach to the firm’s unique culture. For example, in a previous blog post, I described how Hanson Bridgett developed an application to identify the most promising candidates, based on their answers to this brief questionnaire:
As a result of this approach, clearly the lawyers described in this case study saw benefits to their clients and to the firm. But lawyers excel at skepticism, and some are sure to ask for more systematic proof of LPM’s benefits.
We would love to be able to provide definitive statistics that would prove LPM’s benefits to the most hardened cynic. But the legal profession has long struggled with systematically measuring the impact of programs like this.
The most prestigious annual conference on LPM is the Legal Marketing Association’s P3 conference. (The name comes from the three related Ps of pricing, project management, and process improvement.) At last year’s conference, one of the most heavily attended panels was entitled “Finding and Measuring LPM Success.” I went to this session like many other audience members, hoping to leave with the Holy Grail of measurement: a metric that could be used to unequivocally prove, or disprove, the impact of a particular LPM program. But I did not walk away with the Holy Grail.
After the session, I talked to a number of others who were in the audience with me, and we all felt the same way: the panel certainly reviewed a number of possible metrics, such as revenue, profitability, leverage, and percentage over or under budget. But all of them could be influenced by many factors beyond LPM, and none provided the simple and unequivocal proof that many firms are looking for.
I’ve written several times in the past about why this is so. During the P3 session, I raised my hand to bring up what I see as the key question: If a lawyer completes an LPM coaching program and later sees increased client satisfaction, how can you prove to skeptics that it was the coaching that made the difference, as opposed to some other factor?
I did not get an answer, but in fairness to the speakers, I am afraid that nobody has one. I just couldn’t help asking, because hope springs eternal.
In the 10 years I have been writing this blog, I have often quoted the best sales training speech I ever heard. The speaker was Tom Snyder, now the managing partner of VorsightBP, a sales and strategy consulting firm. One of his main points was that it is impossible to definitively link any particular program to a particular sale in any type of business. In essence, his message was, “Don’t overanalyze. This is marketing, not a science experiment. If you got more work, you won.”
So unless someone can figure out how to do a double blind experiment on LPM, we will all have to be satisfied with case studies. When lawyers say that LPM helped them to improve client satisfaction or get new business or increase realization, as the people above did, you should believe them and move on.
That’s basically what Hanson Bridgett Managing Partner Andrew Giacomini has done. “I don’t have any statistics,” he said, “but if I didn’t believe that LPM was producing a return, I wouldn’t keep investing in it.” After each program concludes, “You can see the energy that lawyers are putting into applying it to their practices. As they pass these tools along to others, it creates new strengths for the entire firm. And if our lawyers become the best at LPM, they will get noticed.”
“I worked with Gary to put task codes on every aspect of the matter,” Keil says. “The idea was to check on progress at every point and to build a very detailed budget. This worked well even though I had already given the client a fee estimate for the matter. But when I broke it down with Gary, the number of tasks on the list doubled, though my overall fee estimate remained the same. I identified tasks I hadn’t thought of before. That increased the client’s and my team’s understanding of the project and of its costs.”
In order to do this, Keil had to work with the associate and the paralegal on the project to review exactly what they do on a project like this and plan how long it would take them.
“Now we have a better idea of the work that will be delegated, and to whom, well in advance,” Keil says. “And we developed a spreadsheet and a template that can be used in similar matters. As an incoming partner, LPM is a very important skill to have these days.”
“One of the things that we can now do,” she concludes, “is to use these tools to review past projects so that we can see how much work was involved in each category and at what rates. This helps us understand our own costs and estimate better in the future.”
Adam Hofmann, a senior counsel who was coached by Natasha Chetty, says the main advantage of LPM is developing the mental discipline “to think about the process and better advise my clients, because we can predict our projects and costs in a more reliable way.”
Hofmann does most of his legal work for public entities such as local governments and special districts. One of his main practices is in eminent domain matters where the government is legally obligated to pay fair compensation for taking someone’s private property for public use. Often, the main issue is the value of the property and the amount of compensation due.
“Since most eminent domain cases go roughly the same way,” Hofmann says, “this type of practice is ideal for LPM. We lay out each step and who will do what – will it be me, someone else on my team, or the client? – at each stage. From the moment that the government decides that it needs the property, there is always a standard series of steps. So for each case, we want to identify early what are the tasks and who will take responsibility.”
“I had some idea of how this type of planning and standardization worked even before, but now, having learned from people who have been through it, I am even more motivated,” he says. “It’s good business, and it’s not rocket science.”
Hofmann says this “gives us an advantage over other firms that don’t use LPM. A client can now see behind the curtain a bit, so that they can really understand how we are reaching good results. Sometimes a client may see lower bills but may not know what went into that. We show them that the lower bills are based on ideas that we had right from the start, from the initial thought about that client. We try to communicate that to the client very directly. The client will appreciate seeing the forms that standardize our work and seeing the other aspects of how we organize each matter. Some clients will see the value immediately, while others will understand it a bit later, but they will always see it.”
Kathryn Doi is a health care litigation partner who joined the firm in November 2014 from a smaller law firm. She brought in a specialty to the firm – litigation on behalf of health care providers who claim that they have received insufficient dollar reimbursements from the Medi-Cal program or private insurers, or are challenging the Medi-Cal program’s proposed adjustments to health care providers’ reimbursement rates.
“The way my coaching worked was very straightforward,” Doi says. “Mike Egnatchik and I identified certain types of cases, and we talked about the implementation of LPM principles in these cases. I had not even heard the term LPM before we started, but the idea immediately resonated for me. Lawyers like me are always trying to be mindful of the need to be efficient, to bring value to their work, and to meet or exceed client expectations.” Doi also worked with Senior Value Pricing Specialist John Murphy and CFO Roger Robles to create budget and planning estimates.
As a result of her coaching, Doi notes, “I began to think more like a client – to see what we do through the lens of a client.”
Doi represents a major air ambulance company that, at any given time, is pursuing a large number of small claims. With help from Egnatchik, she developed templates and “road maps” for these types of claims based on the firm’s past experiences of its budgeting and workload for these cases.
Now the client is sent a summary of where each active case stands on a regular basis, along with results that allow the client to compare results with expectations and anticipate future workload. “I have received very positive feedback from the client on providing this type of regular communications,” she says, “and it has resulted in a stronger client relationship.”
“The client was going to follow me from my prior firm,” Doi says, “but by doing this, we were able not only to rebuild the work but to create a more efficient model for the work. The client needs to know on a high level what is going on with its matters. Now they have a work flow matrix that can be plugged into all the cases to give an immediate sense of where each case stands.”
When I recently interviewed managing partners and other leaders at 50 AmLaw200 firms about client demands for greater value, one senior executive admitted “When it comes to value, I’m not sure what our clients mean. It means different things to different people.” There’s only one way to find out: ask them. For a list of over 50 questions you could ask to begin the conversation about value, see page 124 of the third edition of my Legal Project Management Quick Reference Guide.
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.
“The law firm of the future will require many new skills that were never taught in law school,” according to Andrew Giacomini, the managing partner of Hanson Bridgett, a northern California law firm with more than 150 attorneys in four offices. “That’s why we have decided to make a significant investment in training our lawyers in legal project management (LPM), value pricing, and leadership training, to enable them to be more successful.”
This series of posts discusses the process and results of the LPM portion of Hanson Bridgett’s training, which began in July 2013 when partner Garner Weng and Chief Information Officer Chris Fryer organized a group of 11 attorneys to compare several variations of our LPM coaching program.
Most of the firms we work with these days concentrate on two months of one-to-one LPM coaching, which looks for “low hanging fruit” and applies LPM to ongoing real-world engagements as explained in several previous case studies in this blog and on our web page. The one-to-one approach allows any number of lawyers to begin whenever it is most convenient. However, the best approach for any given firm depends on its culture and its needs, and based on the results with their first group, Hanson Bridgett decided to organize the coaching into groups, beginning each with a just-in-time training workshop on LPM. At the end of the two months, each lawyer also had the option of completing a third month. (Only a few have exercised that option, but everyone seems to appreciate having it available.)
Based on the success of the 11 in the pilot test, they offered this LPM program to 13 more lawyers beginning in April 2014 and then another 14 starting last March, for a total of 38 to date. Fryer expects to keep offering this program until he has offered it to all the lawyers who could benefit, with “sessions for 10-14 lawyers about once a year in the future.” The program has been helpful to a wide range of lawyers, including some of the most senior partners in the firm.
Larry Cirelli is a senior trial lawyer and business litigator. In addition to his business litigation practice, he is frequently asked to step in and assist when the firm goes to trial in almost any type of matter.
“I have always applied certain principles that I would call LPM,” says Cirelli. “For example, I always ask the client at the start of a matter, ‘What are your goals? What is your ideal resolution of the matter?’ Then I create a plan to attempt to achieve those goals. I use an Outlook task list in part to do so. Outlook allows you to set deadlines and relate each item on the list to the overall strategy of the case. But just because I’ve been doing this all along doesn’t mean I can’t improve. There are always better ways to do things.”
Cirelli says that as a result of his LPM coaching with Mike Egnatchik, he streamlined his task list, added subfolders to break down tasks more precisely, and added management objectives such as ticklers to stay in touch with clients on a regular basis.
Also in the coaching, Cirelli discussed the way he handles certain cases all over the United States for a major client – cases that tend to follow a pattern. He then worked with John Murphy, Hanson Bridgett’s senior value pricing specialist, to set up budgets for these types of matters. As Fryer explained, the pricing position was created in December 2014 to “improve budgets for AFAs and hourly matters in order to make our budgeting approach more professional and ultimately more profitable.”
According to Cirelli: “Working with John, we set up budgets for these cases using the information we had gleaned from completed cases to guide us with regard to the time needed for each specific task. So we were able to say for each case, ‘Did we/could we go over budget? If so, why? Did we underestimate anything? Can we provide service to the client in a more efficient manner?’” Using these budget templates, he was able to reassess and rebudget some of the eight ongoing cases. “In each case we sent these budgets to the client and the client was very pleased with this approach.”
“The whole training process has made us more efficient in handling all these cases and it has made me more productive,” Cirelli concludes. “You can never stop learning and improving. And although I already had my system of project management, now that we have the technology to use LPM, it helped me make my system more efficient.”