A smarter practice: Beyond legal project management

The data paints a very clear picture. Despite declining demand, law firms have been able to increase rates and boost productivity. Clients moved work in-house, reduced outside spend, and shifted their focus. Firms that demonstrated an ability to deliver value-efficient, predictable, and cost-effective legal outcomes — are the clear winners.  As the head of innovation at one large firm reflected, “Being able to proactively budget and communicate about matter progress and deadlines is required to make that client pitch stick.”

This focus on value has been a key catalyst in the rise of alternative legal service providers, an industry worth nearly $14 billion. As these and other pressures persist, successful law firms are seeking ways to protect profit margins and drive innovation.

There have been incremental improvements to tracking matters and managing client expectations. But the challenges in today’s legal market are too great and LPM alone is not enough. Fortunately, advancements in technology, properly coupled with a more dynamic mindset by firms, offer a path forward to overcome these obstacles.

It’s not getting easier

In a given day, a lawyer’s task list is essentially a list of pre-sold time commitments. It’s up to him or her to fit those commitments into the reality of a working day. Most lawyers have created their own systems for managing their workflow, but they often do not integrate with firm technology. 

Certainly, lawyers rely on firm systems discretely, but the gaps between these systems are where critical connections and insight are lost. Perhaps more perilous, a firm full of lawyers with unique workflows requires the work to adapt to each lawyer as it moves through the firm, leading to communication issues, knowledge gaps, and inefficiency.

At the most basic level, every lawyer must understand what to do, how to do it, why it needs to be done, and — above all — how to bill for it. For experienced lawyers, answers to some or all of these questions will be innate. Less experienced lawyers require more robust support systems to help them accomplish their tasks. Alongside basic task lists and standard legal guidance, these lawyers often need access to that innate knowledge living inside more senior lawyers’ and partners’ minds. While many firms leverage knowledge management tools to capture this knowledge, they struggle to deploy it effectively.

Similarly, firm leadership feels the pressure to drive efficiency, predictability, and profitability. Success requires firms to manage the minutiae of legal work while simultaneously maintaining a view of matters and the business as a whole. Historically, matter management has been an imprecise endeavor. Even with modern matter and project management tools, determining the current work or budgetary status of a matter often requires calls and emails to multiple teams to obtain answers that are more directional than data driven.

An outdated solution

Broadly speaking, project management is focused on planning and managing the execution of the work of a team to achieve specific goals and meet given success criteria. In law firms, project managers are tasked with overseeing the intake, planning, execution, and evaluation of matters. 

LPM was introduced to law firms to help meet client demands for clarity about matter cost, timeline, and outcome. Indeed, LPM methodologies necessarily require increased collaboration with clients that can strengthen client relationships and yield valuable insights.

As important as LPM has been in advancing the practice of law, these solutions address only a portion of the larger legal workflow challenge. Advancements in legal technology and data analysis have positioned integrated workflow solutions, leveraging LPM, to fundamentally improve how legal services are managed and delivered.

II. Visibility and foresight into pricing and profitability

Some firms have rightly begun introducing dedicated pricing functions to meet new client demands and maximize profitability. Pricing and project management functions often work closely in firms where both are present, but the systems that support them are frequently separate. Along with efficiency gains, integrating pricing and LPM technologies enables greater visibility into historical matter profitability, timelines, and contingencies.

While associates have a better scope and plan for working their matters, partners have at-a-glance visibility into matter progress and financial status. By empowering partners with a complete view of their book of business, they can better manage client expectations and unforeseen changes, while significantly reducing “fire drill” scenarios.

Furthermore, senior leaders and financial professionals gain visibility into firm-level profitability and workflow metrics. With the ability to conduct detailed analysis on both historical and current data, firm leadership will be able to make smarter decisions regarding all dimensions of the firm.

III. Collective knowledge management and support systems

Assuming successful integration of the tools previously mentioned, firms will be in an excellent position to tell lawyers what needs to be done regarding a given matter. However, that lawyer’s success hinges on his or her understanding of how and why to perform the tasks that have been assigned. While seasoned lawyers may have all they need, junior associates have traditionally relied on what one lawyer calls the “folkloric transfer of knowledge.”

As legal work becomes increasingly digital and the idea of the “office” increasingly flexible, folkloric simply isn’t enough. So much information lives in the minds of individuals that firms run the risks of conflicting or outdated information disseminating, key knowledge holders leaving the firm, and, most riskily, junior lawyers too afraid or unable to get the answers they need.

Happily, there are several knowledge management, legal know-how, and legal research solutions that aim to provide support. However, their primary challenge is delivering support at the point of need. These solutions require the lawyer to switch applications and search for the resources he or she needs. For a firm focused on efficiency, predictability, and profitability, this loss of time is unacceptable. An ideal solution will deliver both standard legal guidance and firm-specific intelligence contextually within the lawyer’s normal workflow.

IV. Analytics to inform decision making

A unified view of the firm’s practice should enable robust analytics. Alongside critical financial data, firms gain the ability to answer a variety of important questions:

•  Which support resources are used most often and regarding which matters?
• On high-volume, repeatable matters, which tasks require the most time?
• Which matters require the most changes and how does that affect delivery and profitability?

Data-driven answers to critical questions like these are imperative for firms that want to succeed in a market where competition is increasing. Leaders gain access to business intelligence that can help to answer the many “whys” that today’s billing and business management solutions create. With streamlined project management tools and reporting, partners can spot trends across legal teams and matters.

These analytics can also help firms better understand their clients. Examining all a client’s matters with an end-to-end view can yield invaluable insights, such as how to facilitate more accurate scoping and pricing to reduce write-downs and improve outcomes. In years past, firms have differentiated on things like legacy or big-name talent.

A bold step forward

As the legal industry evolves, few things are certain. However, what does seem certain is that the seismic shift brought on by the pandemic has created an opportunity for law firms of all sizes to rethink their approach to project management. But this is the beginning, not the end. A focus on efficiency and delivering value will yield dividends for those firms bold enough to embrace change and proactively seek solutions.

Among the tools vying to address these problems, legal project management is perhaps the most well-known. However, it solves only a portion of the larger, long-term needs of modern law firms. True integrated workflow solutions are the clear next step in the evolution of the way lawyers and firms work. By simplifying the planning, managing, and execution of legal work, firms can begin to marry the business and practice of law in ways that truly empower every stakeholder. Whether you prefer heart and mind, art and science, or business and practice, it is only through deep and integrated connection that the best law firms will thrive.