The latest post from Jim Hassett’s blog Legal Business Development.
Jose Ferrer is a commercial litigation partner at Bilzin Sumberg who has an extensive practice in international disputes and arbitration. As noted in Part 1 of this post, a majority of Bilzin Sumberg’s partners completed our three-month individual coaching program, but Jose is part of the “other half” who attended an initial retreat presentation, and then developed LPM tactics on his own, and in collaboration with partners who were coached.
As a litigator, Ferrer says, “you always work with your strategy in mind, and LPM helps you better define your strategy. It tells you what the next 90 days will involve and it enables you to think through your case.”
“Sometimes we compete with firms that have lower hourly rates, and then we have to provide something else to our clients. Part of that “something else” is certainty and the ability to budget. Of course, most clients’ litigation departments see outside counsel as a cost item. Our ability to produce and adhere to a budget improves a company’s ability to predict its own bottom line, which is of great value to the client.”
“We track every hour billed by an attorney or any other timekeeper by task code. It takes longer to put your time into the system, but it represents a significant value-add to any client,” Ferrer says. This task-code system was developed at Bilzin Sumberg starting from standard ABA task codes and it is extremely well suited to the types of litigation they specialize in.
“The task codes force you to think about your strategy,” Ferrer says. “If you see that in the past 30 days, you have used only the discovery task codes, it forces you to think, ‘Did this discovery add or detract from your progress in the case?’”
“I have an icon on my computer that represents our budgeting software, ENGAGE. If I click on it, it will help me compare the planned budget with actual expenses, for example. It is relatively simple software and is easy to use. The benefit of the software is that it draws on past experiences in similar cases and tests how realistic the budget is when compared with them. We’ve been populating that system with our cases for two years, and we now have a reasonable amount of data in front of us.”
“ENGAGE offered training in the software, and it’s very hands-on. For example, for one footwear chain client, we are using it to budget for current cases – breach of contract cases, landlord-tenant cases, other commercial cases – based on prior experience in similar cases. We have prior history that we can draw upon. Not only do we have an idea of what the current case will cost; we also can have an educated conversation with the client in advance about how the case will go and what strategy to use.
Al Dotson is a government relations partner and leader of the land development practice group at Bilzin Sumberg. His work primarily involves public-private partnerships in economic development in South Florida. It involves securing land use, zoning and other key government approvals and permits for large real estate developments.
Al was one of the three lawyers in the initial pilot test of LPM coaching, and says he is now using LPM principles “in just about every matter that I have here. These principles are flexible and important enough to apply to nearly everything that I do.”
One key area is communication with the client and among team members. “Early communication with the client is absolutely essential for us to mutually understand what the expectations are,” he says. “In addition, I routinely set up non-billable team meetings to ascertain the status of the work at any given stage, to avoid duplication of effort, to identify issues sooner rather than later and to communicate quickly with the client if there are any issues. This is done early and frequently throughout the project.”
“You really can’t say you are engaging in LPM,” Al says, “unless the budget and the assumptions are continually being reviewed and updated on a going forward basis. It’s an ongoing process, not just the mere act of creating a budget for a project. For example, changes occur regularly within a project. The initial assumptions will change, and we will need to change the staffing on a matter. Similarly, changes in a project will even begin to change how we define the concept of success for the project. Because of our use of LPM, all of these matters are now top of mind.”
Al shared that he has access to the LPM reports and budget tracking for the matters on which he is working. To ensure consistency of data and to provide additional "eyes on the target," Bilzin Sumberg has a centralized process supported by finance staff who input budget information into the budgeting software. One of the finance team's responsibilities is to “provide us with ticklers when certain milestones are reached.”
“Bilzin Sumberg provides attorneys with access to real-time information and this is critical to LPM. It enables better communication with the client and allows me to be even more timely and efficient on my matters.”
Last December I wrote in this blog that “no law firm on the planet has achieved more LPM behavior change, more quickly or more efficiently” than Miami firm Bilzin Sumberg. Since then, the firm’s LPM success has been featured by others in books and at conferences.
As explained in my book Legal Project Management, Pricing, and Alternative Fee Arrangements, their breakthroughs were built on a foundation of providing LegalBizDev’s individual coaching program to the majority of their partners (26 out of 51). That coaching was completed in May 2013. By then, the LPM had reached critical mass and had developed enough momentum that no more coaching was needed. The partners themselves and Bilzin’s internal staff took ownership of moving the effort forward.
No one at Bilzin Sumberg would say that their LPM work is done. As the chair of one AmLaw 200 firm put it in my new book Client Value and Law Firm Profitability: “It’s an evolving process. I don’t think there’s ever going to be a point at which you can say: ‘Now I’ve arrived.’” But Bilzin Sumberg’s continuing experience provides valuable lessons in the best and most cost-effective ways to get started, and what happens next, so we will continue to update their results from time to time in posts like this.
Jon Chassen, a partner in the real estate group at Bilzin Sumberg, was one of the three lawyers in the firm’s original pilot test of LPM coaching at the beginning of 2012 with LegalBizDev principal Steve Barrett, and his success encouraged other partners to give it a try. Jon’s practice focuses on complex real estate deals and on real estate deals with unusual twists. He often works closely with litigators to solve his clients’ problems, although he is not a litigator himself.
Jon says that a lot of things that he learned in the LegalBizDev coaching were similar to techniques that he had been trying to implement throughout his career. The coaching crystallized and formalized these methods and techniques.
In Jon’s practice, LPM works best for larger transactions, where at the very outset, you need to design an engagement letter that spells out what you will and will not do for the client. “This way, the engagement letter guides the entire project. It establishes the scope of the project so that everyone in the transaction, outside lawyer and client, knows what role they will play. Then, as the transaction changes in unexpected ways, the engagement letter can be modified to reflect changing expectations.”
“Sometimes it’s relatively easy to anticipate that the scope of work will change and that the project will become larger or smaller than originally anticipated,” Jon says. “Sometimes, the changes are completely unanticipated. Either way, LPM techniques permit the lawyer and client to make changes pretty much on the run. I can now see at a glance who needs to be added to the team, who is dropping off the team, and so on. I see immediately when we’re at a fork in the road, and what the possible choices are at that decision point.”
“LPM also permits me to delegate more effectively. Since all the assignments to attorneys are made well in advance and carefully specified, I don’t need to be the funnel point on everything. If I have a lawyer working on a particular set of documents, I can trust that he or she will complete that assignment.”
“I am a bit technologically challenged in terms of creating charts and work flows. But with the use of LPM techniques and with people in the firm who can help me, I can now create these charts in a very useful manner. The chart will tell me what happens next. Who needs to get involved? LPM helps me come up with answers to those questions.”
Carter McDowell’s practice as a Bilzin Sumberg partner involves land use, zoning, environmental, and other regulatory approvals for major building projects, including regional malls, resort hotels, industrial complexes, professional buildings and marinas. Carter completed LegalBizDev’s three month coaching program in its second wave, after the pilot test.
“At the end of the day,” Carter says, “LPM is mostly about organization.”
“It enables you to step back and look at the process and compartmentalize it. It also enables you to look at it in the largest possible sense, from the very beginning.”
For one major project on South Beach that Carter has worked on, he made a very specific LPM outline of all the aspects of the project and of the budget associated with each aspect.
“We separated the project into several parts,” Carter says, “and we made several updates to each part as we went along. The government, after all, doesn’t take a linear path in granting approvals, so this LPM document has helped us plan each step. Our client used the LPM document on an ongoing basis.”
“In the South Beach project, there have already been seven hearings at which some sort of approval was granted, and two more approvals remain to be granted,” says Carter. “Each hearing is before a separate board. So the LPM document was helpful in documenting and managing the whole process.”
“We actually prepared the LPM document as soon as our client acquired the property. It was that long ago. The client had asked us to put together a list of the most likely tasks that needed to be accomplished. So we used the LPM document to prepare that and we have updated and expanded it on an ongoing basis.”
“The firm now has sophisticated budget software (ENGAGE). On this project, the financial department staff at the firm established the outline of the document before the current software was available. So in this case, I don’t manipulate the software myself. I do receive reports from the financial people. They have been very helpful and responsive.”
“The document has led us on more than one occasion to go back to the client and to say, Here’ s a hearing that we hadn’t anticipated, so we updated the budget to include that process.”
“The LPM process is working well to enable us to provide our clients with better service at a lower cost. Some of the procedures that we documented repeat themselves in other projects, so I can reuse this outline for other clients and efficiently tailor it to fit their needs.”
In association with the publication of my new book on Client Value and Law Firm Profitability, the Ark Group has scheduled a series of three webinars in which I will discuss key findings from our research with leading experts in the field. All of the events will be recorded, so if you have a conflict on any of the dates below, you can listen to the webinars later any time, any place.
Wed Oct 8, 1-2 PM Eastern
Defining value and its impact on profitability
Law firms cannot meet client demands for greater value until they understand exactly what clients are looking for. This session will begin by reviewing data on how often clients simply want to lower costs, and how often they are looking for better understanding of business objectives, greater efficiency, improved communication, and other factors. It will then proceed to discuss how to define and manage profitability while meeting these client needs.
Jim Hassett, President, LegalBizDev
Michael Roster, Steering Committee Co-Chair, Association of Corporate Counsel’s Value Challenge
David Schaefer, Deputy Chairman; Chair, Corporate, Loeb & Loeb
Wed Nov 12, 1-2 PM Eastern
Legal project management: The state of the art
When law firms were asked what they were doing to meet the profitability challenge, many started by listing legal project management (LPM). But the term means different things to different firms, and some have had much greater success than others in changing lawyers’ behavior. This webinar will review data on what has worked best in LPM, and what hasn’t worked at all.
Jim Hassett, President, LegalBizDev
Albert Dotson, Government Relations & Land Development Practice Group Leader. Bilzin Sumberg
Richard Rosenblatt, Operations Partner, Labor & Employment Practice Group, Morgan Lewis
Wed Dec 10, 1-2 PM Eastern
Strategy and tactics for the new normal
In addition to LPM, firms have been experimenting with many related tactics including knowledge management, software, new staff positions in pricing and value, contract attorneys, outsourcing, alternative fee arrangements, and much more. The final webinar in the series will explore which strategies and tactics have been most effective, and what firms must do in the future to adapt to a changing marketplace.
Jim Hassett, President, LegalBizDev
Tom Clay, Principal, Altman Weil
John Paris, Partner, Chair of the Firm Innovation Team, Williams Mullen
According to the chairs, managing partners and leaders of AmLaw 200 firms interviewed for my new book Client Value and Law Firm Profitability,the faster firms act, the more likely they are to survive and prosper in today’s increasingly demanding marketplace. In Altman Weil’s most recent Chief Legal Officers Survey, the top three things that clients want are improved budget forecasting, greater cost reduction, and more efficient legal project management (LPM). Since LPM will help meet the first two requests, you could say the top three things clients want are LPM, LPM, and more LPM. To date, the response at too many firms has been delay, delay, and more delay.
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 is explained in detail in Chapter 7 of my new book.
Livia Kiser is a Chicago-based partner at Loeb & Loeb who represents defendants in consumer class actions, primarily those that relate to claims by consumers of a defect or a false claim about a product. She also reviews product advertising in advance to counsel clients on their advertising and what is likely to be a “red flag” for plaintiffs’ counsel.
Her LPM coaching, with Michelle Stein, focused on the litigation side of her practice.
“This training has made me more cognizant of how to create and implement a realistic budget on every matter, even one that can seem historically hard to quantify or to control, such as a class action brought by a plaintiff,” Livia says. “Even for cases which are hard to predict, I have learned how to provide more accurate budgets, not only because it is important for internal business reasons, but these days clients understandably expect it.”
“I am very interested in strategies for how we can stick to a budget. Will this particular task really take ten hours? Should we budget it for that amount of time? These are the kinds of questions LPM causes you to consider,” Livia says.
Livia says that as a partner and lead counsel, she is also required to get involved in planning the time of other attorneys such as associates. She says many associates don’t think about these issues until they become partners. When the issues become relevant to them, they’re not prepared. LPM, Livia says, is not only about numbers and budgets; it’s about human beings.
Livia uses Excel to prepare budget documents – just garden-variety Excel that she’s already familiar with. She receives weekly updates on her projects from Stephanie Flitcroft and also speaks with Stephanie at least once a week, if not more often.
Stephanie reports that “We provide many ad hoc reports so that lawyers can compare budgets to actuals along the way. If there is a variance, they can determine if it was caused by a change of scope or whether some timekeeper simply didn’t understand the requested task. This allows them to deal with issues before they get too far off course.”
Livia says Stephanie and her team are involved both in ongoing client matters and in pitching new matters. They are also extremely helpful in working on alternative fee arrangements (AFAs). “We cost out all the scenarios that make sense before we propose an AFA,” Livia says, “and Stephanie helps provide the assumptions and ideas that we need.”
The more lawyers take this approach, the easier it gets. As Andrea Danziger explained, “We endeavor to share the actual tools and templates that have come out of the coaching program, as well as others that we’ve developed for proposal bids. This has been a grass roots effort. We’ve tripled the number of people in the program since you first wrote about it, and we want to keep going, because the more lawyers incorporate LPM into their matters, the more the ideas spread.”
What does the future hold? According to Deputy Chairman David Schaefer, “I think legal project management is going to become one of the core business skills of running a law firm. Even in situations where we still bill hourly, every client wants to know: How much is this going to cost? How long is it going to take? What’s involved? It may take a few years, but it will become part and parcel of how we do business. Lawyers will be comfortable having those discussions. They will expect it. And I think that you’ll see an increasing growth within our firm, and other firms, of non-legal professionals who will take a bigger and bigger portion of these tasks under their wing.”
Schaefer has also seen that the benefits of LPM go not just to clients, but also directly to the firm’s bottom line: “LPM has already protected our profitability in very significant ways. These days, lawyers are more prepared to provide accurate bids. We have better data and more reliable information. In the past, when we looked at a class of cases or of deals, and there was a fairly significant range between the high and the low, we really didn’t know why we had such a wide spread. Now we understand what the key considerations are. We can look for those at the outset of a matter, and try to address that with the client, rather than letting it catch everybody by surprise. And so I think that LPM has made our processes much, much better.”