The purpose of this article is to examine Legal Project Management (LPM) obligations on the “buy” side, that is, what does a client need to do to achieve an optimal result from law firms who are expected to work according to LPM principles?
LPM is not a blunt instrument to be used to beat law firms into reducing their fees – in fact sometimes fees may increase if there has been “scope creep” or delays caused by the client. It would be easy to take the view that law firms have done very well out of time costing over the last thirty years and so now it is time to place external legal advisers on a very short leash. Clients though need to recognise that if the leash is too short, the process and the end result will be inimical to what the client wants to achieve.
In the USA the whole LPM movement is very much a reaction by law firms to protect profits at a time when clients are reducing their overall spend. However at its core the use of project management principles is about injecting efficiency, certainty and transparency into the provision of legal services. This is achieved through placing more emphasis on the “process” side of the delivery of legal services. Many lawyers regard essential activities such as preparing a Project Execution Plan, reporting against it and administering the letter of engagement accordingly, as not being “real legal work” and therefore undeserving of much attention. From a client’s perspective though, the process aspects of the services are integral. Clients will review the performance of a firm holistically – in many situations a firm can provide first class work product, but the client still may have a negative view of the firm because the final invoice was more than initially estimated or because there were other “surprises”.
It is quite right for clients to insist on the elimination of waste (or “profligacy” as the American Bar Association has described it). However the relationship is symbiotic, meaning clients, particularly in-house counsel, must also adopt practices which are conducive to work being delivered efficiently.
Some of the key points to be considered in the article include:
- The importance of the client “owning” the agreed scope, including the underlying assumptions, and of the alignment of objectives
- The false economy of clients understating the scope or otherwise abusing a “fixed fee” agreement
- The need for the project plan to be “proportionate” to the size and complexity of the matter
- The need to be vigilant to protect against firms who will provide the lowest price then make their money out of variations
- Paying for project management and reporting
- In-house counsel clinging to hourly rates when assessing tenders while insisting tenderers abandon hourly rates
Peter Dighton is the principal of Law Strategies Pty Ltd., which is a legal and commercial project management consultancy with over 30 years’ experience on international resources projects www.lawstrategies.com). Law Strategies provides LPM mentoring to law firms and has developed its own methodology for preparation of Project Execution Plans – “Incogito”