I once had a partner tell me that I am kind of like the Wizard of Oz. I go behind the scenes, operate a bunch of controls, and when I come out, we have everything we need to achieve operational success on a matter.

Legal project management (LPM) is not magic. It is a disciplined way to manage legal matters through scoping, budgeting, tracking, and having proactive conversations with clients. When it first emerged in large law firms several years ago, many thought LPM was the latest “shiny new object” in the legal world and would soon be a fad of the past. However, it is now clear that it is here to stay. Client pressure to reduce legal fees and increase efficiency are the primary reasons it has been so successful. LPM brings order to chaos and helps lawyers implement processes that promote good client relationships and good financial hygiene in their law firms.

Legal project management brings order to chaos

Most large firms now have dedicated legal project management resources, but their roles and reporting structures differ. Some LPM programs rely heavily on process improvement, while others focus more heavily on pricing, budgeting, and matter tracking. Some LPM teams operate in stand-alone law firm departments, while others are connected to pricing or client value teams like we have at Ballard Spahr, which includes both pricing and practice technology. Client legal departments are also beginning to ramp up their legal project management capabilities, which often involve the use of their e-billing technology.

If you are interested in implementing LPM best practices, here a few things you should focus on to bring about the most meaningful results:

1. Invest in upfront planning: Sometimes, little or no planning takes place when new matters come in. I get it—we need to start working quickly, and it’s hard to get everyone together to discuss matter specifics. But matter planning is incredibly important, and lack of planning can drive up the cost of the matter significantly and lead to huge inefficiencies. At the beginning of each new meaningful matter, there should be a kick-off call between the client and law firm during which they discuss expectations, the scope of the work, and the tasks for which each will be responsible. This approach promotes law firm/client collaboration and results in the parties having a shared vision on how the matter will be handled.
2. Prepare a detailed written matter plan and budget: After the planning is done, the next step is to put pen to paper and develop a detailed matter plan and budget to be documented in writing as a part of the engagement letter process. At a minimum, this process should involve identification of the diverse team members who will perform the work; the tasks that will be required to complete the work and the estimated hours it will take to complete those tasks; several hourly and value-based pricing options the client can choose from to best meet its needs; the items that will be within and outside of the scope of the engagement; key deliverables; assumptions; and a communication plan. This process prevents confusion about the terms of the engagement and helps things move quickly once it is underway.
3. Engage in active monitoring and management: The key to successful LPM is the commitment of the team to monitoring progress and engaging in active matter management throughout the life of the matter. The law firm legal team needs to focus on implementing a process that will enable it to communicate with the client early and often to avoid surprises. Phase and task codes should be part of the time entry process to track specific items against the budget and tie them to invoices. Technology should be used to generate alerts and budget-to-actual reports, and data analytics should be used to make sure the team is on track to complete each phase of the work in a timely manner and to help proactively identify any potential issues. This approach allows for frequent client updates on what is happening and, if there are issues, promotes client involvement in decision making regarding next steps. It is inevitable that matters sometimes will go off track, but major issues can more easily be avoided if proactive communication takes place as soon as it’s clear there will be an issue. Active matter management helps this to happen.
4. Post-matter reviews: Post-matter reviews are the most important part of the engagement. A common complaint in the legal industry is that it’s hard to understand the true cost of engagements and compare the value that law firms provide because there is a lot of garbage data. It’s true that the data is not always as good as it should be, but engaging in true matter planning and tracking helps to minimize this issue. If budgets and matter details go into the system at the beginning of the engagement the right way and law firms track budget-to-actual information by task, then at the end of the matter, it’s easy to perform internal post-mortems to identify potential areas of improvement and model pricing for similar future matters. Law firms and clients should also meet at the end of significant engagements or groups of engagements to discuss what worked well, what didn’t work as well, and areas that can be improved. Particular discussion points that might be useful are ways that client-focused technology improved (or could have improved) efficiency and reduced costs, how well the parties addressed changes to the scope of work that happened mid-engagement, and how well the law firm and client legal teams worked together and communicated with one another on important issues.

At Ballard Spahr, one of the things we are very disciplined about is the matter planning process. We require budgets for nearly all of our matters. These budgets include detailed matter information and are created by the attorney responsible for each matter with assistance from our Client Value and Innovation team. The budgets are housed in our pricing and matter management system, Ballard360 ValueMatters, which enables us to generate real-time budget-to-actual reports to which we give our clients direct access. Over the past several years, since we started to focus more heavily on matter management, the results have been incredible. We’re more focused on selecting the right diverse teams to handle our matters and run them efficiently, we’ve saved our clients millions of dollars in legal fees, and we’ve increased our firm’s overall profitability and significantly reduced the number of write-offs.

Want to run your own Emerald City? Continue to follow the blog to identify additional ways that you can use legal project management techniques to achieve success in your practice.