Category: Business Process Management

All of a sudden, there has been a steep increase in the popularity of legal project management. You will find many attorneys undergoing training on the subject, attending day-long seminars, tuning into web casts and getting certified as project managers. The topic seems to be top of mind in the legal community and is on the rise.

Interesting enough, the principles and concepts of project management related to legal issues were unheard of just a few years ago. Today, however, lawyers and corporate legal departments alike understand the tremendous change when the subjects are linked.

It will not be wrong to say that it all started when the economy forced corporate legal departments to get serious about reducing their outside legal costs. Initially, attorneys were interested in legal project management because they needed to gain great visibility into their legal matters and projects and have a means to better predict future legal spend. This spurred general counsel to aggressively negotiate fixed prices for standard legal work. Hence, the rise of alternative fee arrangements (AFAs) finally.

From the law firm perspective, attorneys are under a lot of pressure to bill more hours, produce exceptional work and maintain profitability in the law firm. On the flip side, their clients want them to work smarter, harder, faster and at a reduced rate.

Enter the need for legal project management.

Most firms can achieve a much higher return on their investment if they apply the techniques of legal project management appropriately. There are many training programs that are being conducted on the topic. With a little guidance and expert advice, most can quickly come up with hundreds of ways to save money and time. You just need to ensure that the course or training program is led by someone who has good knowledge about the unique needs of legal project management.

Project management is still a new concept to the legal profession and everyone is still trying to figure out how to make it work and what it can do. It is no doubt a key component and it is just starting to transform how legal professionals operate. It will ultimately require top-to-bottom, comprehensive and long-term changes in the way all lawyers do business.

Unfortunately, many lawyers are reluctant to change but the tipping point has already come and now is the time to get onboard or risk getting left behind. Embracing legal project management principles is not a matter of when, but how quickly it will become customary for lawyers to practice law and be project managers.

Project management is a difficult area of study and when we are talking about legal project management, it becomes even more critical. If you are not clear about what legal project management is, let me explain. Simply put, it is the application of project management principles but in the context of the legal world – cases, matters, litigation, transactions or projects.

Lawyers and in-house attorneys are beginning to understand why project management tools are critical, especially with the rise of alternative fee arrangements (AFAs). For example, how can a law firm measure whether or not it is profitable if they can’t distinguish what drives more revenue — hourly billing, AFAs or blended approaches? Enter project management.

Legal project management tools can provide insight into all areas of billing whether they are fixed fees, AFAs or blended arrangements. In fact, this type of management is becoming a significant means to help many law firms and corporate legal departments limit their risk and exposure, reduce excessive spending and improve collaboration among team members.

Irrespective of what profession or business you are in, we all manage projects. It doesn’t matter if they are legal, business, school or home-improvement related. Having a clearly defined process and ability to continually monitor, access and evaluate the process will define the outcome and success of the project. From our perspective, it seems easier to rely on technology to simplify the process.

Project management involves the consideration of the following aspects:

• Define Project Terms. Defining the project scope early on is critical to ensure all team members are aligned on the goals and objectives. This task alone can eliminate many unnecessary hours of wasted work.

• Assign Project Tasks. A clear time line of project deliverables and tasks is necessary for a successful project execution. This also gives ownership to the various team members and eliminates any confusion about who is completing the various tasks. When implemented correctly, the project manager can quickly determine if expectations are being met.

• Communicate. Communication is the cornerstone of managing a project. When working on projects with multiple team members, written communication is preferred. In fact, centralizing all the notes, documents, conversations and status updates in one place will make it easier to manage the project.

I asked a similar question when I really came to understand that legal case/matter management offers few tools to help a lawyer do anything better. “Why isn’t matter management just project management?” I asked.

Well, here I am again, questioning what seems to be the status quo. Why isn’t project management really process management? As I survey the leading tools for project management, I find that they are great at aggregating project knowledge and dissemination of roles, responsibilities and timelines. But they don’t fundamentally help you do anything better. What they all lack is a focus on “process management.” In addition to the online project management tools that I am referring to, I also include Microsoft Project. Microsoft SharePoint is more about process management than Project is.

When we think about lawyers, primarily ones who work inside corporations, we see departments that run on process. Most of these processes are manual, paper intensive and cumbersome but they are effective on the margins. But why couldn’t they be better with technology?

Corporate legal departments have processes for everything — hiring law firms, terminating employees, collecting information about potential claims, collecting data about legal department costs, etc.

What if:

• A corporate legal department could automate and manage those processes as part of their primary project management functionality?

• The processes could be dynamically created, with custom forms and workflow added, in minutes?

• They could deliver those custom processes (forms and workflow) to anyone in their company without them having access to their project management system?

• They could deliver those custom processes in any manner they wish such as SharePoint, a company intranet/extranet or other applications?

It begs the question – Do legal departments need project management or process management? I think we need both, but my definition of project management now very much includes process management.

The harder part is trying to find a system that does both functions well (or at all). I couldn’t find it! But there is light at the end of the tunnel. Process management is foundational to Onit’s premium product scheduled to be released next month. Register today for a free trial and you’ll be one of the lucky few to get advance notice about our new product for both project and process management.

The discipline of project management is not new – it is just becoming the latest buzzword in the legal industry – and for good reason. As many of you know, traditional project management emerged out of the construction and engineering industries and has never been really suitable for the legal industry. The IT industry, however, has in the past 20 years taken to a modified project management process that is lighter and more suited to lawyers. Although legal has been somewhat slow to embrace this discipline, the landscape is changing and there has been a fundamental shift in how law is being practiced today and in the future. (Just look at all the articles about alternative fee arrangements).

Why Now?

Even before the recession, corporate legal departments were being asked to reduce their total legal spend, bring greater control and predictability to their legal budgets and demand greater efficiency from outside counsel. The recession escalated this mandate and there continues to be immense pressure to control and manage legal costs. Whether corporate legal departments like it or not, legal project management is here to stay.

3 Key Benefits of Legal Project Management

Change is difficult for any corporation or law firm but with it comes the possibility of great innovation. Implementing basic project management fundamentals in all of your legal projects will help you work more efficiently, increase your productivity and improve how you interact with your legal and business teams. Here are 3 key benefits of legal project management and why it’s necessary in the legal arena:

1. Managing Expectations

Project management is all about managing expectations – whether it be with internal or external stakeholders. This seems like a simple concept but how many times have you received an invoice from an outside law firm or vendor and it was more than you expected? Implementing project management discipline in all your legal projects, whether they are matters, litigation, deals, or transactions, will ensure that your projects are on track and that milestones and deadlines are met accordingly. It will also help alleviate those awkward conservations with the senior management team about why your legal departments spend dramatically increased with little to no advance warning.

2. Updating Project Stakeholders

Communication with project stakeholders is important to the success of any project, legal and otherwise. Keeping a team well-informed ensures there are no surprises at the end of the project or in this case, billing cycle. Regular and consistent communication is a simple enough concept but it takes discipline to do it right. Besides, isn’t it easier to be proactive rather than reactive?

3. You Can’t Manage What You Don’t Measure

Although this cliché gets touted like a mantra in some organizations, it’s true when it comes to legal project management. But the reverse is true also: you can’t measure what you don’t manage. You must agree to the scope of work, objectives, key performance indicators and success criteria in advance and review them regularly as your legal project hits milestones. It’s critical to take action early if you are failing to achieve any of your goals or performance targets and alert the team. Tracking, assessing and measuring legal project status can be summed up in a one of Albert Einstein’s concepts, “Not everything that counts can be counted, and not everything that can be counted counts.”

At Onit, we had to make a decision between using a tag or folder metaphor for “filing” information. We chose tags, and I will tell you why after a short introduction of both possibilities.

You know what folders are if you use a computer. Folders are directories that can contain other folders or files. They are very flexible in that you can create an unlimited number of folders and nested folders to organize your information. The key limitation of most foldering systems is that an item (document, image, file, etc.) can only exist in one folder or sub-folder at a time. Creating your system is complicated up front if you want a logical way to find your information. Not thinking it through up front will typically lead you to a disorganized, “let me just create a new folder for that” approach that is little better than having all of your information in one folder.

Tags are different from the ground up. Unlike folders, where items belong to a folder, a tag belongs to the item. This is an important distinction and one that gives tagging a great advantage over folders. Tagging lets you assign an unlimited number of tags to any item.

If you use any type of photo catalog software, you are probably familiar with tags. For instance, one photo could have a picture of mom (tag “mom”), dad (tag “dad”), Suzy (tag “suzy” and “kids”), Billy (tag “billy” and “kids”) and be from a recent vacation (tag “vacation” and “2010”) in Rome (tag “Europe” and “Italy” and “Rome”). You can see the beauty of this method. With just a couple of clicks, you can now pull out all of the photos with Suzy in them that were taken in Italy in 2010. It is not important what folder these pictures reside in.

I believe that files can benefit similarly from tags. It is rare that a file, let’s say a PowerPoint presentation on the 2010 Marketing Budget, couldn’t also benefit from multiple tags. Say you want to file that presentation. You will probably do something like file it into Marketing or Budget but if you used tags, you could tag it with “presentation” and “2010” and “marketing” and “budget.” That would give you a much richer way to find relevant information.

The downside of tags, though, is that you typically don’t see your information in the same hierarchical way that folders allow. But does that really matter in this search-centric world? I don’t folder much of anything anymore; I simply search. But tags make search much more valuable. And, if you really need it, there are ways to make tags look like folders.

Here at Onit, we chose tags as the metaphor for adding meta data to documents and projects. We think it works. Let us know what you think.

I had some preconceived notions about budgeting for legal projects going into the design phase for the Onit legal budgeting set of features.

First, I believed that our primary market, corporate legal departments with $1 to $6 billion in revenue, would want their law firms to create and submit a budget. After all, that is what the Fortune 500 market wants. Second, I believed that our primary market would want detailed budgets, at least at the phase level. After all, Fortune 500 corporate legal departments want to budget at even a greater level of detail. Both of these preconceived notions were wrong. And not just a little, but 100% wrong.

For a market that does very little budgeting today, a little bit of functionality goes a long way. As a result, we will deliver life of project and annual budgeting capabilities and skip the detail for now. Budgets, while they can be informed by law firm input, will really be created by the corporation. It is clear the general counsel in these companies rely much more on the expertise and opinion of their own employees about project costs than they do their vendors.

We have learned a couple of other things that would be more helpful than more detail. In addition to providing budget to actual comparisons, we will also be trying to extract some meta data about the invoice and the project at the time of invoice submission by the law firm and invoice approval by the inside project owner. Specifically, knowing what your spend is compared to your budget is not that meaningful unless you also know where your project is compared to its estimated completion. For instance, knowing that you are at 50% in a project is enhanced by the knowledge that you are 67% through with the legal work on the project. Your budget to actual comparison is now informed in a very meaningful way.

So in addition to collecting an invoice, we will also want to know whether there is a new estimate for project completion costs or date. These are relatively simple things to collect in our model with value that far exceeds the cost to collect.

Not really. But the process that the legal industry is going through to define legal project management is exactly like the process the industry went through to come up with standards for electronic invoicing in 1997 and 1998, which yielded the Legal Electronic Data Exchange Standards, or LEDES for short.

In the mid-1990’s, companies like AIG, GM, DuPont and countless others were creating their own formats for law firms to submit their invoices electronically. It made sense because there were no standards. Then electronic invoicing vendors like Examen and TyMetrix started writing their own formats and proposing that companies adopt them so that there would be less formats in the market. The short term result was more formats.

The solution was to have the industry get together and agree on a unified standard that may not necessarily cover everyone’s complete wish list, but was enough for law firms, corporations and vendors to start communicating in a common language. Until that happened in 1998, electronic invoicing was only a trickle. After that, the flow of data became a flood.

Today, there is a lot of chatter about legal project management. There are lot of ideas about what it means and why the legal industry needs it. There are also a growing number of definitions of legal project management. I find that they are predominantly from the law firm perspective, though. Not wrong, but our perspective is very much from the buyer of legal services perspective, not the seller. In my view, until the industry finds a way to come together and agree on a definition, legal project management will make little headway.

How the industry gets together to do this is a bit more challenging. In the earlier example of electronic invoicing, PriceWaterhouseCoopers funded the initiative and really facilitated the outcome. They did this, presumably, because they wanted to be seen as thought leaders and to generate fees eventually based on the implementation of electronic invoicing and spend management. And I think they were successful. Who will step forth for legal project management is less obvious. It can’t really be a vendor like Onit. And it can’t really be a law firm. And it can’t really be a corporation. I think it will take a forward-thinking, thought-leading consultancy that understands that investment is necessary here and that it will yield benefits in the future. Any takers?

Finally, in the interest of moving the ball forward, here is my top-level take on what legal project management means for corporate legal departments. Feel free to comment.

1. Initiation
   1. Create project
   1. Define issue
   1. Define project goals and scope of work to be performed
   1. Define desired outcome
   1. Have initial conversation with outside counsel (if necessary) about the project

1. Planning
   1. Agree on a project plan, which breaks all deliverables into discrete items
   1. Agree on a budget according to the project plan
   1. Agree on a staffing plan and detail who will work on the project and at what rate

1. Execution & Monitoring
   1. Begin execution of the project plan
   1. Get weekly status updates (or more frequent for shorter projects)

1. Completion & Evaluation
   1. When a project is complete, go through an evaluation process that includes the following:
   1. 1. Project evaluation
      1. Firm evaluation
      1. Lessons learned
   1. Use closing process to help you create better templates for future projects

As we prepare for our new website launch and begin work on our premium product tailored at the legal vertical, we continue to struggle with how we talk about what we do. Although we designed Onit specifically for lawyers, we quickly realized that Onit is a universal project management tool that any professional, or non-professional for that matter, could use.

At the highest level, a lawyer’s project management needs are not that dissimilar than most people’s needs. On the one hand, we have a great, general project management tool that we will continue to grow for all professionals. On the other hand, our business plan predicts that 100% of our revenue will come from the legal vertical in the next five years.

It is the classic “depth verse breadth” battle that most software companies encounter. So far, we have tried to straddle both: Onit is for everybody; Onit Premium will be for lawyers and people that work with lawyers. Now, we have to find a middle ground that clearly articulates Onit’s value proposition to both audiences.