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Lawyers learn from engineers, contractors

By: DOLAN MEDIA NEWSWIRES//August 19, 2011//

Lawyers learn from engineers, contractors

By: DOLAN MEDIA NEWSWIRES//August 19, 2011//

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By Christine Simmons
Dolan Media Newswires

ST. LOUIS, MO — Contractors and engineers in the U.S. have been using the principles of project management for decades. Only in the past couple of years has it become a buzz phrase in the legal industry.

Lawyers can now get certified in the practice — a method of planning and organizing a major project. And an organization dedicated to it for all industries, the Project Management Institute, started a group just last September for legal professionals.

Some lawyers think project management is just another term for what lawyers were doing already. But others and consultants say it’s a new approach for the legal world that more and more corporate clients are demanding to manage their legal costs since the recession hit.

Any lawyer will give you his or her own definition of project management. But it generally means outlining the steps of a project, whether it’s major litigation or a big transaction, and defining the scope and cost of a project with a client upfront and monitoring those commitments throughout the matter.

Consider this example from Boston-based legal consultant Jim Hassett: A lawyer wants to win a request for a proposal on a real estate deal. It’s a fixed-price payment, and he needs to come up with the lowest possible price that will allow him to offer quality work for a reasonable profit.

Using project management principles, he can break the transaction into a set of steps, set a budget for each and then identify tactics to reduce their cost but still meet the client’s needs. It’s a work model similar to that in the manufacturing industry, Hassett said.

Hassett, who has written extensively on the subject, says project management also means assigning the right people to the right tasks within a project; estimating and controlling costs that come up; assessing risks to a budget or schedule; and negotiating with clients on necessary changes in the project.

Altman Weil consultant Joan Newman in St. Louis said “clients are more in the driver’s seat than ever” on fees. Lawyers have always managed projects, she said, but now firms have to manage projects with predictable fees for the clients, while making some profit and maintaining high-quality legal services.

Chicago law firm Seyfarth Shaw’s “Lean Six Sigma” approach, in which the firm breaks down projects by steps and eliminates wasteful time and costs, has been one of the most highly publicized success cases.

The firm reportedly has spent millions to implement the practice.

Some Missouri firm leaders said they’ve instituted changes in the last couple of years along this approach. The recession and client demands have driven the changes, firm leaders say.

At Gallop, Johnson & Neuman, litigations groups in the past couple of years have become “more disciplined” in communicating to the client the scope and cost of a project, said Tom Campbell, the firm’s managing partner.

For instance, the billing attorney tells a client, “Here’s our best guess as to the budget, the number of depositions, some fees that could spike,” Campbell said.

“It’s trying to lay out the case, not necessarily from the legal theory standpoint, but the logistical standpoint,” he said.

In some years past, the firm didn’t do that for every significant matter, he said. “We may have won the case, but we didn’t manage expectations,” he said.

Spencer Fane Britt & Browne has started some fixed-fee arrangements in major litigation or transaction projects, said firm partner Doug Weems. In one example, the firm and client agreed on a total cost per year, and that cost was split into 12 months. The client paid a fraction of the same fee every month.

Alternative fees don’t have to be linked to project management techniques, but many times the two processes go hand in hand. Flat-fee and fixed-fee arrangements force attorneys to carry out project management principals, Hassett said.

If a firm has a flat-fee arrangement with a client, it’s in the firm’s interest for its costs not to exceed the fee, he said. If the costs do run over, the firm will lose money. “It’s a very different thing when it’s their own money,” he added about the difference between hourly and fixed-fee billing.

Kansas City-based Shook Hardy & Bacon was using project management techniques long before they became more popular. The firm has long employed “practice group administrators” — non-lawyers who work alongside litigation groups to develop and monitor budgets.

In 2000, the firm hired Matt Bohnen, who previously managed construction projects for an engineering firm. Despite the vastly different services, Bohnen says he’s applying the same principles at Shook Hardy that were used in the construction world. These principles are rigorously monitoring the budget and timeline of a project, he said.

For instance, if the firm originally places two partners, three associates and a paralegal on a project, but partway through the litigation, more work appears, Bohnen analyzes the effect of staffing changes on a client’s budget. If necessary, the firm revises its forecasts and informs the client.

“What project management is driving is a lot more conversations throughout the whole matter,” not just the beginning or end, he said.

What’s changed in the last few years at Armstrong Teasdale, says firm partner John Beulick, is that clients are getting more details on the status of projects and staffing than ever before and the firm is collaborating more with clients on those decisions.

Before, he said, “the clients weren’t necessarily interested in getting the granular level of detail,” he said.

Hassett, the legal consultant, says every law firm will say his or her firm is carrying out project management in some way, but “some firms are much better at it than others.”

Hassett estimates that the number of firms who are serious about implementing project management methods only number about 25.

To be clear, Hassett’s consulting firm, LegalBizDev, gets paid to coach lawyers on matters such as project management, and his firm offers its own certification program for lawyers.

But it’s not just consultants praising the practice. In the past few years, the Association of Corporate Counsel has held training programs for in-house counsel on the principles of project management.

Boston University business lecturers are among the programs’ presenters.

Ken Grady, an ACC member and the general counsel and secretary of footwear manufacturer Wolverine World Wide Inc. in Rockford, Mich., said he believes law firms are less enthusiastic than in-house counsel on using project management techniques.

“There’s still more of a bias on the in-house bar on implementing and using business tools than outside firms, which are newer to adoption,” he said.

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