Don’t confuse legal project management with legal process improvement
BY SIMON THOMPSON
In Change Harbour’s recent survey of law firm’s key decision-makers, 91% of respondents reported price pressure in some or all areas of their business, while 79% of respondents said that they are experiencing increased demand for alternative fee arrangements with these typically including fixed fees or capped rates. It is clear that it’s no longer sustainable for law firms to have an open clock running on legal work for clients.
Law firms are responding to these changing conditions by developing and implementing a number of strategies. Amongst these include cost reduction, process efficiency, merger activity, new product development and deeper, more strategic client relationships.
This environment creates the commercial drivers for legal project management (LPM). So why is LPM still a relatively immature ‘industry’? In simple terms, legal project management is the application of project management techniques to the execution of legal matters. However, I often find that industry commentators are confused between project management and process improvement. This confusion subsequently leads to the mis-understanding that legal project management is synonymous with the commoditisation of legal services.
Given this confusion, let’s clarify – what is a project? A project is:
- Time-bound and has a customer
- A complex effort with inter-related tasks
- A non-repetitive undertaking
- Has specific objectives
- Has time and cost constraints
- Needs a temporary organisation of diverse resources
- Clear beginning and end states
- A specific cycle of initiation, definition, planning, execution and close
This sounds like the perfect description of a legal matter at the most complex end of the spectrum…..the sort of transaction for which clients are increasingly demanding greater value, transparency and increased certainty. So given the complex and often unique nature of legal transactions, project management should be at the heart of effective delivery.
Specifically, project management methodologies have been invented to manage the three main issues clients of projects and legal matters often complain about:
- Timeframes overrun
- Costs overrun
- Failure to meet client expectations
So if project management is critical to the effective delivery of legal matters, where does process improvement come in? If we define a process as:
- On-going with no clearly defined beginning and end states
- Customer driven
We should also understand that even the most complex matters will have process driven commoditised elements - e.g. due diligence, document review. Process optimisation should be applied to the efficient delivery of these commoditised elements of a project, while classic project management becomes increasingly relevant and valuable as the legal matter becomes more complex.
Applying project management techniques allows the law firm to gain a deeper understanding of the composition of a matter. This in turn allows the law firm to disaggregate the transaction and apply the most appropriate solution to each component. This may be a specific sourcing or process based solution involving subject matter experts, legal process outsourcing (LPO), information technology, and so on. You might be managing your projects perfectly, but what about the processes underneath? Project managing an inefficient process isn’t ideal. So while the skill of the project/matter manager is:
- to configure the matter appropriately
- ensure that each element is planned and sourced appropriately
- run and coordinate the disaggregated elements of the matter concurrently
It’s also critical that the law firm understands which elements of the legal transactions can be and should be managed as process and potentially subject to disaggregation, sourcing and continuous improvement.