According to the Altman Weil Flash Survey “Law Firms in Transition 2014,” 41.3% of the law firms surveyed (including 42% of the 350 largest US law firms) reported that training in Project Management (“PM”) is key to increased efficiency in legal service delivery. The surprise is that 58% of the surveyed firms do not recognize the key role PM plays. The numbers are markedly different across the pond where large law firms have routinely deployed project managers for several years. The countries’ different regulatory climates might account for the disparity; the UK’s green light to alternative business structures (“ABS”) has infused their law firms with a more business-like approach to legal service delivery.
Project Management is the application of knowledge, skills and techniques to execute projects effectively and efficiently. It is considered a strategic competency for organizations, enabling them to tie project results to business goals — and thus, better compete in their markets. In its simplest form, Project Management defines the desired result, methodically structures the work into manageable pieces, and provides a framework of business and technology processes to achieve the result efficiently and economically.
Project Management was first formally recognized as a management concept in the 1950s to manage expensive, politically visible government projects for the United States Department of Defense and National Aeronautics and Space Administration (NASA). Today, Project Management is an internationally recognized standard that enables project teams across industries to “work smarter, not harder.” Of course, “smarter, not harder” is inimical to PPP, billable hours, and the traditional approach of “throwing bodies” at larger matters. Might those be reasons why law firms have been slow to make PM a staple in the delivery process as other professions and businesses have? And might there be a correlation between the absence of PM and the traditional law firm model now under attack?
The origins of project management in legal delivery can be traced back to the early days of legal process outsourcing (“LPO”) and e-Discovery. Its ascendancy among legal service companies—to be distinguished from law firms—parallels the broader footprint service providers have established in the marketplace. To date, most providers have confined their offerings to “high volume/low value” work with risk retention borne by law firms or, in other cases, in-house legal departments who retained them directly. The volume of work coupled with tight deadlines required qualified project managers, even if risk retention resided elsewhere. Here, then, was where project managers debuted in the legal vertical.
As the disaggregation (“unbundling”) of legal work proliferated and as more providers vied for an increasing volume and breadth of work once performed by law firms, competition drove down price, led to “commoditization”, as well as sophisticated, relevant metrics. This further elevated the importance of skilled project managers. As has been noted, project management has been a staple in the delivery process of business and other knowledge-based professional service organizations (architecture, accounting, technology, consulting, etc.). This begs the question: why were the same market forces necessitating the use and elevating the importance of PM’s not in play at the high-end of the legal supply chain? Answer: there was no pressure to do so–until 2008.
In late 2008, a “perfect storm” of factors created a powerful current for change in the way law firms (and in-house legal departments) would deliver services. Those factors included: (1) the fall of Lehman and the ensuing global economic crisis; (2) regulatory changes– most notably in the UK–that enabled lawyers to share profits with non-lawyers as well as to be capitalized by institutional investors; (3) technological advances that enabled transparency, efficiency, and collaboration; (4) the failure of several large U.S. law firms and the shedding of associates and non-rainmaker (service) partners; (5) growing (but still tepid) demands that law firms operate with the same accountability, efficiency, and transparency as other business and professional service providers; (6) the ACC Value Challenge that focused on solutions to the cost: value divide within Biglaw; and (7) globalization.
These market drivers created increased competition, a glut of unemployed lawyers (which contributed to the formation of law firms with new models as well as further growth and proliferation of service providers), price compression, increased competition among law firms as well as service providers, a bleak job market for the vast majority of law students (many of whom also carried enormous education debt) and a growing sense that corporate law might just be ripe for disruption. This view, of course, was far from universal and sparked a long-running debate whether this was a temporary correction or “the new normal.” That debate is increasingly tipped in favor of those who maintain that things won’t return to the way they were pre-2008. It is against this backdrop that the emergence of project managers at the higher end of the legal supply chain is briefly considered.
Project Management has many applications to the delivery of law firm services. It facilitates transparent fixed-price budgets for clients and, more importantly, promotes adherence to the cost, schedule, and scope of work. Call this the “making the train run on time” function of PM. But the role of the Project Manager involves much more than fiscal adherence or “herding cats.” Project Managers—like general contractors—plan in advance of starting the work by creating a statement of work (“SOW”). The SOW details: (1) what will be done; (2) who will do it; (3) when it will be done/what the deliverables are; (4) what the basic work assumptions are (conversely, what would trigger “change orders”); and (5) what the cost is. Project managers work closely with the lead attorney (this could be an individual playing dual roles) to structure the statement of work and then to deliver per its terms. In short, Project Managers effect efficiency and predictability to the delivery process—two shortcomings endemic to the traditional legal model.
Attorney pushback to SOW’s (and, perhaps, to PM generally) is premised upon the urban myth that “each case is unique” and, so, rife with variables that cannot be anticipated.
Not only are those variables reasonably foreseeable– drawn from a depth of experience handling relatedmatters– but also, the ability to foresee and to identify them is the very expertise that makes seasoned project managers and lead counsel so valuable. Project managers, working in concert with lead counsel, are the antidote to sticker shock emanating from legal work performed without a flight plan.
The breadth of the role assumed by a project manager is determined, in part, by whether, in the first instance, s/he is an attorney as well as by subject matter expertise and matter type. PM’s do not substitute for the lead attorney vis-à-vis case strategy but can and do work side-by-side with them to ensure that objectives, budget, and client contact is current and on-track. One of the most important tasks of a Project Manager is to handle “Integration Management” of a matter. For example, a change in the scope of work will affect cost and schedule. Project Managers are responsible for integrating those changes into the project plan to ensure the team still produces the deliverables within the parameters set by the “change order.” By doing so, all ripple-down effects of changes are fully accounted for and there are no “surprise” costs or schedule delays. The upshot: legal services following Project Management principles operate in a more structured, predictable manner. Efficiency, predictability, transparency, and cost-effectiveness are all desired results promoted by project managers.
An emerging group of attorneys—most of whom are younger—combine PM training with a legal background. These “dual threats” will play an important role in the delivery of legal services, particularly as lawyers increasingly find themselves working side-by-side with professionals from other disciplines. Those other professionals once operated at the margins of legal delivery as “experts” but now are routinely becoming part of the legal service mix, especially in markets such as Australia and the UK where barriers to inter-disciplinary practice have been lifted.
U.S. law firms should embrace PM’s and invest in hiring and/or training attorneys with this skillset. Likewise, law schools should mandate that all students take at least an entry-level course in Project Management.
The ability of lawyers to fill this critical delivery function will help stanch the profession’s narrowing role in solving the business challenges of their clients.
——————————————————————————
The author acknowledges the contribution of Melinda Lewis in connection with this post. Ms. Lewis is an attorney and certified project manager practicing at a large law firm. She will be co-teaching “Project Management for Lawyers” with me at Georgetown University Law Center in Fall, 2015.
For additional information about this post, Legalmosaic, or Hyperion's New Model Leadership Services, please complete the following quick info form: