+ All Categories
Home > Business > Lpm awareness

Lpm awareness

Date post: 25-May-2015
Category:
Upload: david-kearney
View: 116 times
Download: 1 times
Share this document with a friend
Popular Tags:
31
David J. Kearney February 2014 (Legal) Project Management Meeting Expectations of Service and Client Value
Transcript
Page 1: Lpm awareness

David J. KearneyFebruary 2014

(Legal) Project ManagementMeeting Expectations of Service and

Client Value

Page 2: Lpm awareness

Why?

Page 3: Lpm awareness

The past few years have brought change to the legal services industry

Page 4: Lpm awareness

What has sustained providers of legal services in the past will not be the same to what sustains them in

the future

Page 5: Lpm awareness

Clients are expecting it

Page 6: Lpm awareness

Client ExpectationsClient Expectations

• Cost Containment/Management – Obvious

• Provide Client-based value – clients understanding their legal, resource, and cost needs like never before

• How a matter is staffed

• The tasks involved in a matter

• Alternative pricing for those services

…and eventually…

• Alternative ways of providing services

Page 7: Lpm awareness

What is a Project?What is a Project?

• Temporary endeavor• Creates unique product, service, or result• Finite – Beginning & End

Sounds a lot like a client matter

Page 8: Lpm awareness

What is Project Management?What is Project Management?

Application of knowledge, skills, tools, and techniques to project activities to meet the project requirements.

Project Management Institute, Inc. A Guide to the Project Management Body of Knowledge – Fifth Edition, 2013.

Page 9: Lpm awareness

Project ManagementProject Management

• Project ManagementIncludes…

–The 5 project management processes: • Initiation, Planning, Execution, Monitoring and Control, and

Closure.

–The 9 Project Management Knowledge Areas:• Integration Management, Scope Management, Time

Management, Cost Management, Quality Management, Human Resource Management, Communications Management, Risk Management, Procurement Management.

Page 10: Lpm awareness

Legal Project ManagementLegal Project Management

Providing value to the client using PM techniques. These can be used to improve budget estimating, provide greater cost reduction, improved matter management, improve communications, provide for methods for providing alternative work solutions.

Page 11: Lpm awareness

Why Project Management?Why Project Management?

• Control Costs• Enhance Communications• Understand Scope• Manage Resources• Understand and Manage Risks• Monitor & Control Project• Help Ensure Quality• Build Cohesive Team• Establish Internal Knowledge Base

Page 12: Lpm awareness

Reasons Projects Underperform or FailReasons Projects Underperform or Fail

• Unclear, ambiguous, misunderstood scope• Planning based on poor estimates, bad

assumptions, & incomplete data• No risk management strategies• Unmanaged resources• Poor communication• Lack of structured processes to manage project

Page 13: Lpm awareness

Nothing Radically NewNothing Radically New

Constraints and resources are managed and a strategy is planned an executed.

But…

Page 14: Lpm awareness

Various Tools & Techniques to Enhance Various Tools & Techniques to Enhance ProjectsProjects

• Define Project, Satisfaction, & Completion• Risk Management • Work Breakdown Structure• Alternatives Identification• Estimating • Measure & Audit• Sharing Case Data and Status• Closing, Lessons Learned, & Debriefing

Page 15: Lpm awareness

Where to StartWhere to Start

• Pick a tool, technique, or practice to use that isn’t already a part of your current case management strategy

• Add additional tools as you become comfortable with concepts

• Doesn’t have to be integrated all at once

• Tools to be used, where needed

Page 16: Lpm awareness

Legal project management can be implemented in a very disciplined and thorough manner and also in a customized way. It can be implemented to take advantage of developing complete scopes of work, applying tools to manage risk, monitoring and controlling of a matter's progress, and to develop and manage a communications plan. Once the key components of project management are implemented, greater rigor can be applied to managing and tracking of tasks during a matter utilizing tools, such as a Work Breakdown Structure; estimating methodologies, such as Parametric Estimating and PERT analysis; and financial forecasting analysis.

Page 17: Lpm awareness

Firms that have Adopted LPM Firms that have Adopted LPM StrategiesStrategies

Reed Smith Womble, Carlyle, Sandridge & Rice

Seyfarth Shaw Steptoe & Johnson

Jenner & Block Osler, Hoskin & Harcourt

McCarthy Tétrault Bilzin, Sumberg

Eversheds Winston & Strawn

Nixon Peabody Sutherland

Dechert Baker Donelson

Loeb & Loeb Jackson Kelly

Page 18: Lpm awareness

RequirementsRequirements

TransparencyPredictabilityEffectiveness

EfficiencyRisk Management

“Up-to-the-Minute” CommunicationResults/Value-based Billing (Fixed-Fee/Flat-Fee/AFAs)

No Surprises

Page 19: Lpm awareness

Value-Based Fee StructuresValue-Based Fee Structures

The first step on the path to value-based fee structures is defining value. This is an obvious

point, but one still worth emphasizing. The fundamental shift: move away from “how many

hours will it take” to “what is the value to be delivered.” From the client’s perspective,

answering this question requires some additional effort at the outset, -- and then requires the client

to communicate that value to those who are on the team -- but it is a worthwhile investment.

2010 Association of Corporate Counsel

Page 20: Lpm awareness

Value-Based Billing/Fee TypesValue-Based Billing/Fee Types

• Fixed Fee per Deliverable– Affixes an “all in” price for a distinct piece of work,

encompassing all of the law firm’s ancillary preparation and effort.

– Pay X for a law firm to draft and argue a summary judgment motion; Pay Y per deposition taken; In the transactions context, pay Z to produce an initial draft of a license agreement.

• Situations in which certain component pieces of work are distinct and measurable such that client and law firm can agree upon a workable fee schedule, even if the number of “units” of work may vary going forward.

2010 Association of Corporate Counsel ACC Value-Based Fee Primerhttps://www.acc.com/advocacy/valuechallenge/toolkit/upload/acc-value-based-fee-primer.pdf

Page 21: Lpm awareness

Value-Based Billing/Fee TypesValue-Based Billing/Fee Types

•Fixed Fee Per Matter– Sets a fixed price for all legal work relating to a particular

matter.– Pay X to handle a particular type of commercial real estate

transaction; Pay Y to handle the defense of a single-plaintiff employment litigation up to trial, with an additional fixed amount to try the case.

•Situations in which matter recurs in a defined and predictable way so that the client and firm can agree on a reasonable fixed fee to handle that matter, barring an unforeseen developments.”

2010 Association of Corporate Counsel ACC Value-Based Fee Primerhttps://www.acc.com/advocacy/valuechallenge/toolkit/upload/acc-value-based-fee-primer.pdf

Page 22: Lpm awareness

Value-Based Billing/Fee TypesValue-Based Billing/Fee Types

• Capped Fee– Commonly used to set a ceiling on what the client will pay the law firm

in a particular matter, or for a particular piece of work. Resembles a fixed fee, but with certain drawbacks (discussed in the “Assessing” section below.)

– Legal fees for this matter, in this calendar year, not to exceed X; Fees for drafting and arguing this appeal not to exceed Y; Fees to handle this transaction not to exceed Z.

• Situations in which the client is most comfortable with the hourly rate billing model and favors greater predictability (by capping fees on the high end) as opposed to lowering fees (by sharing with the law firm a portion of savings generated under fixed fees).

2010 Association of Corporate Counsel ACC Value-Based Fee Primerhttps://www.acc.com/advocacy/valuechallenge/toolkit/upload/acc-value-based-fee-primer.pdf

Page 23: Lpm awareness

Value-Based Billing/Fee TypesValue-Based Billing/Fee Types

•Flat Fee per Period– Typically covers distinct categories of services during the course of a

specified period.– Monthly flat fee to cover advice and counsel requests on regulatory

issues of a certain type; All-in “per diem” fee for trial representation for whole trial team; Monthly flat fee to handle administrative management during certain phases of litigation; Quarterly flat fee for handling all intellectual property litigation of a certain type or in a certain area; Quarterly flat fee for handling a certain volume of commercial agreements.

•Situations in which distinct pieces of work need to be performed on a recurring basis, and the client wants to create an economic incentive for the law firm to staff and perform the work more efficiently (i.e. reducing its own cost to increase its margin).

2010 Association of Corporate Counsel ACC Value-Based Fee Primerhttps://www.acc.com/advocacy/valuechallenge/toolkit/upload/acc-value-based-fee-primer.pdf

Page 24: Lpm awareness

Value-Based Billing/Fee TypesValue-Based Billing/Fee Types

• Portfolio Fixed Fee– Represents a broader application of the fixed fee approach by

assigning a large portfolio of work to a single firm for a fixed fee, usually after a competitive bidding process. Duration can vary, but generally a multi-year term (2 or 3-years) is common; payment schedule may be monthly, quarterly or on another set period.

– All employment litigation for a fee of X; All product liability litigation of a certain type for a fee of Y; All transactions of a certain type for a fee of Z; All securities portfolio filings for a fee of XX.

• Situations in which a group of matters is sufficiently similar, recurring and predictable so as to lend itself to relatively consistent year-over-year patterns in terms of activity and fees.

2010 Association of Corporate Counsel ACC Value-Based Fee Primerhttps://www.acc.com/advocacy/valuechallenge/toolkit/upload/acc-value-based-fee-primer.pdf

Page 25: Lpm awareness

Value-Based Billing/Fee TypesValue-Based Billing/Fee Types

•Per Capita Fee / “Ad Agency” Model– Fixes a set price to “purchase” on a discounted basis the full-

time or half-time services of a certain person or team, who then produces the work required.

– For the coming year, pay X to purchase 50% of the billable hours for attorneys 1, 2, and 3 to work exclusively on this client’s identified matters.

•Situations in which a client wants particular outside attorney(s) to be available and the law firm is willing to provide a discount in exchange for the certainty of revenue in advance – and the volume of work is sufficiently predictable so as to keep these folks busy.

2010 Association of Corporate Counsel ACC Value-Based Fee Primerhttps://www.acc.com/advocacy/valuechallenge/toolkit/upload/acc-value-based-fee-primer.pdf

Page 26: Lpm awareness

Value-Based Billing/Fee TypesValue-Based Billing/Fee Types

• Incentives/Performance-based Hold Back/Success Fees– Aligns interests by tying a portion of law firm compensation to outcomes

achieved. (Can be used in conjunction with any of the value-based fee options described above).

– Percentage (e.g., 20% or some other number) of fees billed will be set aside by client and paid to the law firm subject to a multiplier (e.g. 0, 1, 2) depending upon the extent of success achieved (e.g. win a motion to dismiss, win a jury verdict, resolve a matter below a specified amount, close a deal by X date, etc.); Without a holdback, opportunity for bonus based on results achieved and value delivered (e.g., resolve a matter below a specified amount, close a deal by X date, reduce number of new cases in litigation portfolio by certain percentage, etc.). Bonus could be calculated based on some portion of the costs avoided or value delivered.

• Situations in which the client is able to define success (entirely or in part) according to objectively measurable markers that the law firm can help attain via strong performance.

2010 Association of Corporate Counsel ACC Value-Based Fee Primerhttps://www.acc.com/advocacy/valuechallenge/toolkit/upload/acc-value-based-fee-primer.pdf

Page 27: Lpm awareness

Value-Based Billing/Fee TypesValue-Based Billing/Fee Types

• Pure Contingency– Law firm compensation depends entirely upon achieving certain

outcomes. – Law firm fee is equivalent to X% of the client’s recoveries in a

particular matter; Reverse contingency can also apply where, e.g. defense law firm gets paid only if it wins a dismissal or jury verdict;

• Situations in which client seeks recovery and/or is cash-strapped and is therefore willing to forego a larger portion of its upside stake in exchange for protection on the downside (i.e. pay large fee for a win and no fee for a loss). This is higher risk and higher reward for the law firm.

2010 Association of Corporate Counsel ACC Value-Based Fee Primerhttps://www.acc.com/advocacy/valuechallenge/toolkit/upload/acc-value-based-fee-primer.pdf

Page 28: Lpm awareness

Value-Based Billing/Fee TypesValue-Based Billing/Fee Types

• Hybrid− Combination of one or more of the above approaches on a given

matter or for a portfolio− Flat fee for handling litigation plus per diem for trial and success

bonus for outcome

• Situations where client and firm wish to be flexible to address various touch points differently and reward results.

2010 Association of Corporate Counsel ACC Value-Based Fee Primerhttps://www.acc.com/advocacy/valuechallenge/toolkit/upload/acc-value-based-fee-primer.pdf

Page 29: Lpm awareness

Project Management ResourcesProject Management Resources

• Project Management Institute – www.pmi.org• Levy, Steven B. (2009). Legal Project Management –

Control Costs, Meet Schedules, Manage Risks, and Maintain Sanity. Seattle, WA: DayPack Books

• Legal Project Management: Thoughts, tips, and discoveries related to the management of legal Projects - http://legalprojectmanagement.info/

• Legal Project Management, Pricing, and Alternative Fee Arrangements by Jim Hassett

Page 30: Lpm awareness

Project Management ResourcesProject Management Resources

• 2014 Report on the State of the Legal Market

https://peermonitor.thomsonreuters.com/wpcontent/uploads/2014/01/2014_PM_GT_Report.pdf• How Legal Project Management Is Changing the Way Services Are Marketed

http://about.bloomberglaw.com/practitioner-contributions/how-legal-project-management-is-changing-the-way-services-are-marketed/

• Legal Project Management: A Trend at the Tipping Point

http://www.altmanweil.com/dir_docs/resource/b5e9aa02-9af1-4fcb-86d9-0d50e3e519d2_document.pdf 

• Managing Value-Based Relationships with Outside Counsel

http://www.acc.com/advocacy/valuechallenge/toolkit/loader.cfm?csModule=security/getfile&pageid=19673

• Guide to Project Management

http://www.acc.com/advocacy/valuechallenge/toolkit/loader.cfm?csModule=security/getfile&pageid=1293786

• A Practical Slant on LPM Implementation

http://www.jdsupra.com/legalnews/a-practical-slant-on-lpm-implementation-42065/

 

Page 31: Lpm awareness

Thank YouThank You

David J. Kearneywww.linkedin.com/in/davidjkearney/


Recommended