Since the 2008 credit crisis and the subsequent pressure on in-house law departments, corporations have been asking their law firms to provide more transparency, predictability and no surprises on the matters they run for them. Gone are the days where lawyers are expected to do whatever it takes to complete the job, and to know obscure bits of case law to bring value to their clients. In the last few years, law firms’ clients have been asking firms to demonstrate legal project management capabilities as a measure of their commercial competence. As a result, law firms have been increasingly turning their attention to legal project management (LPM) to meet their clients’ needs.
From observing the nature of law firms in the major jurisdictions, the North American experience is that law firms have been recruiting for LPM as a role for the last decade. Like other project managers, LPMs to varying degrees support the process of ensuring that deliverables meet client specifications and that delivery is efficient (of course, the influence and responsibilities of LPMs vary from firm to firm). In some other parts of the world, however, LPM is seen as a function in that lawyers are expected to manage their own matters as projects. In practice, the major difference between the two approaches is the division of labor. While under the North American approach, lawyers are primarily tasked with dealing with the legal work or “do the lawyering”, with an LPM handling the tracking and reporting on matters. In Australia, where firms tend to be smaller, perhaps more specialized, lawyers are frequently tasked with planning how they propose to tackle the matter from a business perspective, as well as monitor performance and expenditures to stay on course. Certainly, larger and complex matters are also supported by a dedicated LPM, but less so for smaller routine matters.
Both of these approaches have their strengths and weaknesses. For example, while the approach in having the matter team closely manage the matter progress instills more business discipline in lawyers and helps them empathize with department/firm administration better, it also diverts lawyers’ attention away from the key part of the job they were hired to do. It also assumes some literacy in basic scope management and financial awareness. The North American approach dedicates a specialist to ensure the matter is staying on track and meeting deadlines, but falls down in the sense that revenues have to be split between more employees, which might be seen as wasteful if associate (lawyer) performance doesn’t warrant having another set of hands to keep matters on track.
Ultimately, it is too early to tell which model is more effective, but what is clear is that as law firm clients universally expect great value from their firms, and that firms are fighting to maintain margins while delivering high quality service, there is an essential role for LPM, wherever it is practiced. In the short term, as this decade-long discipline is relatively new and with best practices evolving, law firms risk rushing to fill these positions with LPM professionals who have fewer and fewer years on the job. Couple that with the decades of law office practice, particularly of the traditional role of the lawyer being solely the legal practitioner and others handling the financial details of the matter, and one can easily see the change management challenge.
Fortunately, the profession has likewise responded, with law schools graduating new lawyers each year with more diverse backgrounds and, in particular, greater knowledge about the business of law than ever before. Even though most lawyers didn’t go to law school to be an accountant or a business administrator, those skills seem to be increasingly valuable to law firm hiring offices. Firms recognize that lawyers with these skills are poised for delivering more value, which also delivers more sustainable growth and ultimately more profits to the firm.
The value and discipline of good matter management practices is actually closer to reality than ever before. This is firstly due to the increased business acumen of those joining the profession in recent years, and secondly by the availability of software which monitors and alerts matter managers of events which require their attention.
Stay tuned for Part 2 in this series: The Cost of Customer Service Failure.