Posts Tagged ‘LPM’

AFAs – A Win-Lose or a Win-Win?

November 22, 2010

I came across Law.com’s article “Project Management with SharePoint Task Lists” when looking for task management solution for one of my clients. Its main story line was Fenwick & West’s use of SharePoint as a project and task management tool for their attorneys.
It’s a very good article with practical advice from a seasoned SharePoint professional. What caught my eye however, was this statement:
“While AFAs can take many forms, they share one thing in common — they transfer the risk of cost overruns from the client to the firm”. This gave me a pause. Is this the emerging perception of AFAs? Should law firms be treated just as Wallmart treats their suppliers?

I hope not. The trend towards alternatives to the venerable hourly billing model (see my previous post on the topic), is not, to put it bluntly,  screwing one side so the other will benefit. The idea is to restore some balance. It’s about improved risk management and cost controls as well as a reasonable measure of predictability for the client. Is the pendulum swinging too far to the other side?

Cost overruns can happen for many reasons. AFAs combined with better matter (project) management can and should provide a framework for decreasing and managing risks. Not simply shifting the risk from one side to the other. You don’t need to be a GC or a managing partner with an MBA to know that having one side carry all the risk is simply not a sustainable business model. It could be that some firms will feel pressured to take on all the risk – maybe facing competitive pressures and demanding RFP situations. But I would suggest that firms resist such un-reasonable demands. In the long run, this is a lose-lose proposition. They won’t be able to afford such arrangements and their clients will end up either paying un-necessary risk premium or risk getting substandard services. Everyone’s focus should be on a  balanced model.

Making AFAs work is in the clients’ interest – but it’s also a change issue and therefore a burden for most of them. Law firms – as the suppliers who’re motivated to acquire and retain clients – have an opportunity (and an obligation) to take clients along for the AFA learning curve. It will then become a Win-Win proposition.

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.