Posts Tagged ‘Law Firm Management’

Lemmings, Lemmings!

November 17, 2010

In his blog post (Why Implement LPM? More Good Reasons… and Bad), Steven B. Levy writes about the wrong reasons for implementing LPM (Legal project management).
I agree with Mr. Levy. Law firms should not do it just because others do, yet we can’t ignore the “Lemmings” factor. It is a strong motivation for some firms. He’s also concerned about heavy project management methodologies. I agree – Six Sigma may be used as a marketing window dressing on the firm’s web site, but trying to implement such heavy duty PM methodology, just because others use it, is destined to fail.

Project management is an everyday skill for anyone who has a string of related tasks and a deadline to meet (my dinner parties!).  And of course, Attorneys do it already – but mostly with little more than their intuition as a guide. What’s missing are best practices that will help them achieve greater efficiency, profitability and transparency (both internally and with their clients).

Can firms be successful introducing simple PM principles to support those goals? Based on my own experience managing a business consultancy, and working with law firms as clients, I believe it is needed and feasible. But with the exception of very complex files, Legal PM “light” is all that’s required.

As a CEO I know the immediate  financial benefits (profitability) and client management issues (high degree of satisfaction) that simple PM principles can support. Law firms can learn some lessons (both good and bad) from their closest business ‘siblings’ – management consultancies. Simply put, our clients expect us to manage tasks, time, resources and finances. We had to step up to the plate. And so will law firms.

Being popular or populist? Innovation in law firms.

April 23, 2009

popular_populistDeploying innovative processes and technology solutions in law firms can be a punishing experience. Directors and managers who raised the ire of partners will tell you: it’s no fun. In fact, it can be downright brutal. So it’s not surprising that some choose populism as their path; If  lawyers ask for it, they’ll do it. Other than that, they simply keep the lights on.

A couple of weeks ago I sat with the CAO (the equivalent of a COO) and CIO of a large firm, reviewing the firm’s major capital projects for the year. We were musing over one of the more innovative initiatives and its value to the firm’s lawyers. The CAO asked: “What would Steve Jobs do?”.  A startling question. In a year when everyone is cutting back, no project is considered unless immediate value is proven, considering a framework for innovation was almost surreal coming from a results oriented CAO.

Steve Jobs did not build Apple or Pixar into the innovation hubs they are based only on focus group feedback. Even now, decisions made by folks at Pixar are challenged. In reality however, few of us have Jobs’ genius for recognizing what consumers want, especially when they don’t yet know it themselves. Trying the same in your firm is suicidal. Yet some of the most exciting innovations were not at all obvious back when. Voice mail, email, blackberries and even document management systems, were far from mainstream when they were first introduced to law firms.

I know managers, directors and even ‘C’ level executives in law firms who are perfectly content (and have success) simply maintaining the status quo.  That’s O.K.  But for those who have different aspirations, would like to leave their mark, and most importantly, see their firms make (small or large) strategic strides forward, the alternative is to figure out how to be popular, not merely a populist.

Remember voice mail?
What an unpopular decision this was 25 years ago. Lawyers hated it! I suspect that the initial introduction of email was also fraught with uncertainty. And what about BlackBerry’s?

Choose your timing carefully
For some, the current atmosphere presents a challenge. Time to batten down the hatches. For others its an opportunity. Firms are fearful, edgy, and therefore open to ideas that could help them change client perception. Outsourcing, alternative billing methods, improved matter management practices, client billing extranets could be considered strategic projects that a year ago would have been D.O.A. during the budget process. It helps if the firm has a strategic focus.

Choose your battles and build strong alliances
In 2001 one of my clients, a senior partner, had a vision for a unique KM solution.  He teamed up with another ‘heavy’ in his firm to introduce a solution that required ‘warm bodies’ and change to lawyer behavior. As you can imagine, that was a bold move and a hard sell.  It worked.  Nine years later, the system, processes and resources required to maintain it, are still around, waiting to be moved into their new technology framework.

Horde enough good-will capital.
Make sure you have enough good-will ‘capital’ to spend. Enough wins with ‘run of the mill’ initiatives that give you ‘chips’ to spend on more innovative solutions. If you have a big idea around unified HR services in the firm, you’ll need to battle existing fiefdoms. You’ll need a strong vision, motivation, and good-will with the firm’s heavy hitters, to pull it off.  The good news about being bold is the rewards, for yourself and your firm, could be substantial.

Be a marketer and a sales person
What makes all this possible is knowing, promoting and selling your ideas to your target market. Like any market, it’s segmented and should therefore be addressed differently.  Sr. partners, from managing partner.  Fellow directors, from assistants and paralegals.  You need to speak the language of the listener.

If you don’t have a big idea, don’t fake it
Sometimes it’s the right thing to let excellent execution of mainstream projects be your focus. At the same time, keep your eyes open for new trends, your finger on your firm’s pulse, stay close to its management and their vision and the BIG IDEA may reveal itself.  Perhaps invention is seeing the obvious that nobody else sees.  Which is proof; it’s not what you’re looking at that matters, as much as what you see.

Believe in your solution. Believe in yourself.
Confidence and gut level belief in oneself is the fuel that feeds the creative fire. Fear of failure can cloud your trust in yourself, in your ideas, and the value they bring your firm. I know of a CIO who rolled out a unified messaging system, an unpopular decision with the senior partners in the firm. He knew however, at a deeper level, that this was the right step, and is therefore seeing it through, converting skeptics to believers one partner at the time.  Because as Steve Jobs said: “Innovation distinguishes between a leader and a follower.”

Additional reading:

In her blog WorkingKnowledge, Andrea Mayer wrote an excellent post on the topic of innovation. I also found the New Yorker’s James Surowiecki’s “Hanging Tough” to be an illuminating historical lessons on innovation during tough economic times

Billable hour – exaggerated rumors about its death

March 20, 2009

dead-billable-hour-2

Those sounds we’ve been hearing since the deafening implosion of the economy are lingering protests over the hourly rates bubble charged by some law firms. Now, more than ever, there’s renewed interest in alternative billing models shifting away from billable hours to fixed or value priced engagements. Noted articles in mainstream media such as the New York Times, and countless posts in the “blawgosphere”, are now trendy. But the debate about the value of the billable hour is not new. A 2007 article by Scott Turow as well as others before him, foresaw its demise over the years. It seems that this time it could be different. The shock waves hitting the legal trade may actually change the way law firms charge for their services. But are we burying time billing a little too fast? Let’s look at a different industry for some clues.

As a CEO of a knowledge management and technology consultancy, I often tell my legal clients that our business model is not that different from theirs. In order to help clients, consultants, like lawyers, charge for knowledge, advise and research time. Although it has always been pretty standard for firms in our industry to charge by the hour, clients have asked that consulting firms will shoulder some of the risk, and provide ‘fixed price projects’. For a period of time, fixed price engagements were all the rage. There are however certain complex engagements that are virtually impossible to estimate up front, so consultancies had to build into their ‘fixed price’ high contingencies in order protect themselves. More recently we’re swinging back into a more rational mix of fixed price, ‘gated’ deliverables, and hourly billable models that suits the tasks at hand.

My consulting firm for certain activities, can offer some services as a fixed price model, with some cost overrun protection built in. In other cases, it makes sense to bill by the hour, but also to cap expenditures based on deliverables and other such goals. The client retains control over costs, ensuring the latter will not spiral out of control. This, by the way, works well for both parties, not just the client.

Inevitably the issues that must be addressed when discussing billable hours are how much to charge per hour, how long will the work take and the mix of legal resources on the file. In our industry, no one charges $1000.00 per hour. It’s simply the rules of supply and demand. Where we, as a consultancy have an obligation to our clients, is to staff our engagements (the equivalent of ‘matters’ in law firms) with a healthy mix of expertise and ensure that younger consultants provide good value for their time, and do as much as the work as it makes sense, while limiting the time senior consultants are used for.

In order to consider such models, firms will need to develop more sophisticated estimation and matter management practices. One of my clients, a large law firm here in Toronto, developed a model that allows lawyers to to price their engagements more effectively, using advanced spreadsheet, which is in turn connects to various systems in the firm. They can now provide their client with target fees, which enables them to then measure their progress as the matter progresses. This level of transparency is great for all parties. The firm controls costs, the client benefits.

It’s all common sense really. Looking around, law firms will find that other professional services organizations already dealt with this issue. There’s no need to ‘kill the billable hour’. But instead find ways to provide different types of service models that will serve the client, their specific needs, and the different types of engagements. Billable hour will be one of the arrows in the firm’s quiver.

(P.S. Ron Friedman posted a succinct reply to my post, and I was just told about Lance Godard’s blog post discussing this issue back in January!)