Client-Matter Level Budgeting
Douglas M. Graham, Director of Administration, Fay Sharpe
Jill Milkovich, Regional Systems Trainer, Squire Sanders
Dave Moravcik, Finance Manager, Squire Sanders
Session Objectives
Gain appreciation of Why Important Understand elements of Project
Management Gain ideas on how to support attorneys
in process Gain ideas on how to implement
Why?
Our Clients are Asking for PM
“Does the firm have a formal process that enables it to forecast, track, communicate and manage a budget effectively? If yes, please describe.”
Our Clients are Asking for PM
“Please describe how your firm would handle the project management of M&A transactions, especially in a highly matrixed organization.”
Our Clients are Asking for PM
“Include in your description examples of any reports, work summaries, or other tracking mechanisms your firm would use to communicate with us and how the attorneys working on the matter will be coordinated within your firm.”
What is Project Management?
A project is "a temporary endeavor undertaken to create a unique product, service, or result."
Project management is "the application of knowledge, skills, tools, and techniques to project activities to meet the project requirements."
Project Management Institute, A Guide to the Project ManagementBody of Knowledge (4th ed. 2008)
Project Management Life Cycle
Phase 2:PLAN
Develop Proposed Solution
Design
Phase 1: DEFINE
Identify Need
Visualize End Result
Initiate Processes
Phase 3: IMPLEMENT
Perform the Project
Execute and Control Processes
Phase 4: CLOSE
Complete the Project
Close & Evaluate
Time
Act
ivity
Lev
el
Phase I: DEFINE
Clearly visualize end result Identify stakeholders Determine how success will be
measured
Project Vision Statement
Purpose Description Desired Results
All work performed shall be pursuant to a Work Plan and Budget …
…shall reflect realistic projections of fees and expenses…
It is the expectation…that actual fees and costs will not exceed these projections.
Revisions…to reflect changed assumptions, unanticipated tasks, etc. must be discussed with and agreed to…before they are made.
…must review…at least on a quarterly basis and revise it…
Example: Billing Guidelines
Project Management Life Cycle
Phase 2:PLAN
Develop Proposed Solution
Design
Phase 1: DEFINE
Identify Need
Visualize End Result
Initiate Processes
Phase 3: IMPLEMENT
Perform the Project
Execute and Control Processes
Phase 4: CLOSE
Complete the Project
Close & Evaluate
Time
Act
ivity
Lev
el
Phase II: PLAN
Work plan UTBMS Work elements, definition, “deliverables”,
timelines
Phase II: PLAN
Staffing plan – the right people for the right job
“To promote effective use of time and skills, we request that Counsel….assign the appropriate minimum number of staff and appropriate level of legal talent to each matter. For instance, we expect that tasks that do not require the skills of a lawyer will be done by paralegals and tasks that do not require the skills of a partner will be done by associates or paralegals. When more complex matters may be handled more cost effectively by a partner with expertise in the subject matter, rather than by an associate, we expect the partner to be used.”
Apply Prior Experience
We’ve all done this before Find similar cases/projects Use UTBMS codes to assess past projects Outside/Local counsel
Measure the need Budget in disbursements
How to Turn it into a Budget
Concepts behind building budget models It takes two to tango
Measure Statistics UTBMS codes – costs per phase Time spent per case Will we be profitable?
Open v. Closed Timekeeper Choices Do we choose timekeepers for case
We have more leeway Are we told who to use
External Resource Plan – Outside Vendors
Monitor vendors/projects Large projects – weekly review Smaller projects – monthly review
Central authority for review/approval process Consistency Eliminates duplication
Outside/Local counsel
Planning for the Unexpected Phasing Decision trees/value analysis (risks &
rewards) Go/No Go factors
Phase III: EXECUTE
Managing the Project Communication It’s all about the deliverables
Managing the Client Communication Change orders Gaining buy-in – decision sign off, planning
participation
Accounting for Progress & Changes Attorney who understand the
case/project Are we where we need to be?
Dollar-wise Project-wise
Adjustments for change in scope
Billing
Bill regularly Use progress bills Quarterly bills – bill promptly Keep and eye on A/R
Monthly retainer?
Phase IV: Close & Evaluate
How did we do? What did we learn? What can we do differently next time?
Links
ACC Value Challenge Legal Project Management
Questions?
