The latest post from Jim Hassett’s blog Legal Business Development.
The third conclusion from our research was that firms should train lawyers and staff to use the codes.
Whatever system is used, many experts have written about the problem of accuracy. Keith Lipman is the president of Prosperoware, a legal technology firm that created Umbria, one of the best known legal process management software packages. In a 2015 blog post entitled “The Task Code Conundrum” he wrote:
Ken Grady, one of the most widely quoted experts in LPM, has worked both in-house, as the general counsel at Wolverine, and on the law firm side, where he currently holds the position of Lean Law Evangelist at Seyfarth Shaw. He is unenthusiastic about task codes, in part because:
Similarly, several of the experts we interviewed described problems of inaccurate coding, including these eye opening examples:
Several of the people we interviewed, however, reported that accuracy can be increased if time is taken to train lawyers to use task or phase codes properly:
The role of staff should not be ignored. A number of firms we’ve spoken to have trained admin staff to save lawyers time by entering the codes for them, and they have reported that this not only saves lawyers time, it also increases the accuracy of data entry.
This general issue is so important that the Association of Legal Administrators (ALA) is planning to release a new set of ALA UTBMS codes which are intended to capture or reflect all activities performed by non-attorney personnel. The head of the committee that developed these codes, Bill Mech, a principal at ofPartner Consulting Services, notes that:
When he reviewed a draft of this series of posts, Peter Secor, the Director of Strategic Pricing and Project Management at Pepper Hamilton, emphasized a similar point:
At the end of the day, the value of the data collected with any kind of coding system is based on everyone using the same terminology in the same way. Note that this is true whether one uses UTBMS-type codes, or simple English language task titles. Many legal accounting software packages can make this easier by enabling “forced” categorization of time entries according to a preset list of categories defined by the matter manager. While this alone will not eliminate miscoded time entries, it goes a long way toward improving accuracy.
This series was adapted from the Fourth Edition of the Legal Project Management Quick Reference Guide, which will be published this fall.
The first conclusion from our interviews with the twelve experts listed in Part 1 was: Use standard UTBMS codes whenever possible.
One of the challenges in working with task codes is that the original UTBMS committee developed just four sets of codes: litigation, bankruptcy, counseling, and “project codes” for transactional work. Later committees issued several revisions and also approved new codesets. The UTBMS webpage currently also includes codes and standards for eDiscovery, governance risk and compliance, intellectual property, workers’ compensation, and mergers and acquisitions. The last of these codesets was developed by the ABA Task Force on Legal Project Management and approved by the LEDES Oversight Committee in February 2016.
So the question about using the standard UTBMS codes applies only to a subset of lawyers. At this time lawyers in many other areas of law have no standard codeset to begin from. Some software vendors have included starter codesets in these areas, but there is no ABA-approved version. In addition, practice groups in many firms have developed their own codesets.
The key question in areas like litigation, where a standard set exists, is whether to use the codeset as is or to customize the codes to better fit the needs of a particular firm. The experts we interviewed agreed that while the UTBMS codes may not be perfect, they have the great benefit of standardization and it’s best to stick with them:
The second conclusion listed in Part 1 was: Avoid excessive detail; focus on phases not tasks.
In UTBMS, each time entry has both a high level phase code and a more detailed task code. For example, litigation was divided into five phases: case assessment, development, and administration (coded L100); pre-trial pleadings and motions (L200); discovery (L300); trial preparation and trial (L400); and appeal (L500). Each of these phases was further broken down into tasks. For example, the discovery phase included tasks for written discovery (L310); document production (L320); and depositions (L330).
Many lawyers are detail-oriented by nature, so it is not surprising that when they modify existing codes or create new sets, they often increase granularity by adding more and more new task codes. In our 2012 article, we quoted pioneers who favored the movement toward increasingly detailed codes and others who felt they were counter-productive. Now, several years later, most of the experts we interviewed believe that less is more. Some have entirely given up on task codes and simply look at phases:
This type of observation is not limited to US firms. In February 2016, the UK firm Jomati Consultants published a 39-page white paper entitled “Re-engineering Legal Services.” (Full disclosure: Like LegalBizDev, Jomati is a strategic partner of Altman Weil.) It included only two quotes about task codes, and both made a similar point, in surprisingly strong language:
It is also interesting to note that the most recent set of new codes, developed by the ABA Task Force on Legal Project Management in M&A, consists almost entirely of phase codes, not tasks. In an interview for these posts, task force Co-Chair Byron Kalogerou, a partner at McDermott Will & Emery, noted that:
This series was adapted from the Fourth Edition of the Legal Project Management Quick Reference Guide, which will be published this fall.
This is one of the longest series of posts in the eleven year history of this blog, because there is currently so much controversy about the best uses of task codes. A much shorter summary of this research was published recently by the Bloomberg BNA Corporate Counsel Weekly and reprinted in the Bloomberg BNA Corporate Law & Accountability Report.
In 2012, we published an article in Of Counsel entitled “Tracking Legal Costs with Task Codes: Different Firms Take Different Approaches.” Since then, the number of firms using task codes has grown dramatically and a consensus has started to emerge about what works best.
This series of posts summarizes new conclusions and recommendations based on our experience working with lawyers in numerous firms, on published reports by a number of experts, and on interviews we recently conducted with 12 experts who have had significant experience using task codes to plan and track legal budgets:
Nicole Beck, Senior Client Value Pricing Lead, Reed Smith
Diane Bertrand, Partner, Fasken Martineau DuMoulin LLP
Toby Brown, Chief Practice Management Officer, Perkins Coie
David Cohen, Lawyer, Project Management, McCarthy Tétrault
Stephanie Flitcroft, Director of Pricing, Loeb & Loeb
Bill Garcia, Chief Practice Innovation Officer, Thompson Hine
Sam Goldblatt, Partner, Nixon Peabody
Jon Hulak, Director of Pricing and Client Service, Mintz Levin
Keith Maziarek, Head of Strategic Pricing, DLA Piper
Megan Panchella, Legal Project Manager, Reed Smith
Robert Parker, Practice Group/Client Matter Management Administrator, Quarles & Brady
Scott Wagner, Partner, Bilzin Sumberg
To maximize the frankness of participant responses, we promised that while their names would be listed in our research summary, no quote would be attributed to a particular person or firm. In addition, all of them reviewed a pre-publication version of this section of this summary and had an opportunity to remove or edit any of their quotes before publication.
The main reason that these and many other experts have increased efforts to implement task codes over the last few years is easy to understand: To remain competitive in an ever more challenging marketplace, firms are being forced to predict and control legal costs better than ever before.
Several of the people we interviewed reported that their use of task codes had already produced a payoff:
Even at firms where there has been resistance to using task codes, the lawyers that have used them have reported benefits:
One expert we talked to has developed about 10 different templates so far for various transactions:
Originally we included a brief history of the most widely used system – UTBMS, the Uniform Task-Based Management System – starting from the fact that the system was designed in the 1990s primarily by clients who wanted to standardize e-billing and understand and control costs rather than by law firms who wanted to predict costs.
Many clients, especially in insurance defense, require law firms to use task codes in e-billing as a condition to getting paid.
Unfortunately, what started out as an effort to create a universal language for analyzing legal work later evolved into a system in which many clients tweaked the system to fit their unique demands. For example, in 2007 the UTBMS Insurance Update Initiative issued a slightly revised set of codes to better meet the needs of insurance companies.
As one expert put it:
Another summed up the situation like this:
In some cases, a single lawyer may have to use two different codes for exactly the same type of work performed on the same day for two different clients. If one wanted to maximize human error, it would be hard to come up with a better system.
This problem is so common that some legal financial software vendors have added automatic translation features so that all the lawyers in a firm can use one standard codeset and have it automatically translated into different codes for different clients. However, these algorithms require painstaking mapping and assume that there is a one-to-one correspondence. If a code in one system overlaps with two or more codes in another system, no algorithm in the world can do an automatic translation.
Despite these barriers, in the last few years many law firms have invested significant effort in using task codes to better track time and cost and ultimately to respond to client demands for more predictable costs. The remainder of this series will explain six key lessons they have learned to date:
This series was adapted from the Fourth Edition of the Legal Project Management Quick Reference Guide which will be published this fall.
On large matters, invite team members to participate in the early planning to get their buy-in on budgeted time estimates, and to assign tasks across the team in a way that maximizes efficiency by taking advantage of each individual’s personal strengths and available time.
The first Wednesday of every month is devoted to a short and simple tip like this to help lawyers increase efficiency, provide greater value to their clients and/or develop new business. For more about this tip, see our Legal Project Management Quick Reference Guide.
When you want to evaluate an LPM program, the best source of information is to rely on the opinion of the people who are in a position to make an informed judgment: the lawyers themselves. In our coaching, for example, if a lawyer gets new business that seems to be related to their LPM activities, we simply ask them: what do you think? Was LPM partly responsible for this? Whether they say yes, no, or maybe, we don’t second guess them; we merely record the opinion and move on.
At the highest level, this means listening to the opinion of the decision makers who ultimately decide whether to invest in LPM or not. For example, as Hanson Bridgett Managing Partner Andrew Giacomini summed it up in the middle of one of our ongoing coaching programs, “I don’t have any statistics, but if I didn’t believe that LPM was producing a return, I wouldn’t keep investing in it.” After each program concludes, he continued, “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.”
In the first few years we offered LPM coaching, lawyers’ reports of its effects were limited to internal reports and occasional public case studies. More recently, we’ve created systematic reports of results both when a program ends and 90 days later, in a format like Table 1 below. This can be circulated internally to assess what works best and to publicize success and generate enthusiasm for spreading the approach.
Note in Table 1 that we recommend that the first column identify the person who first made the change. However, depending on its culture, some firms may prefer to eliminate the “who” column. Since LPM takes time, the benefits column should include not just benefits experienced to date but also the potential benefits for the future. The more specific this can be, the better.
Sample format for tracking LPM benefits
Table 2 includes typical results from past coaching programs, with some details changed slightly to protect the confidentiality of the firms.
Examples from past LPM coaching programs
As firms increasingly use this type of evaluation to document the results of their LPM programs, the approaches that work best for each lawyer and each practice group will gradually spread to the entire firm. The firms that follow this path first will achieve the greatest benefit by giving clients what they asked for in the Altman Weil CLO survey quoted at the start of this piece: LPM, LPM, and more LPM.
This series has been adapted from the fourth edition of the Legal Project Management Quick Reference Guide, which will be published this fall.