The time has come for in-house counsel to stop accepting excuses and instead start demanding that their outside counsel develop an effective program for Legal Practice Management (LPM). In LPM, outside counsel collaborates with in-house counsel to manage the scope, budget and schedule of legal work. This collaborative process allows for completion of legal work in a more efficient and predictable manner. LPM has many benefits for in-house counsel, including gaining more control over their legal budgets and receiving more information about how outside counsel is working toward a favorable outcome.
In-house counsel also gets the benefits of representation built on their established wants, needs and goals because, with each new legal project, the LPM process evolves towards an increasingly customized level of representation. This increased knowledge can then be leveraged so that the efficiency, predictability, and the overall quality of legal work improves as the relationship between in-house counsel and outside counsel grows.
Assessing the credibility of any LPM process first requires an understanding of LPM’s core principles of scope, budget and schedule. While each stands on its own, they are linked together, such that if one principle shifts, the other two also need to be re-evaluated. In-house counsel can get the most from the LPM process by understanding the key inquires driving these core components.
Scope: Defining the Work
In order to define the scope, outside and in-house counsel meet at the outset of a project and discuss the who, what, why and when questions inherent to the legal issues involved. Key questions should include:
- What is the business issue?
- Why do we have it?
- What are the acceptable outcomes?
- What business drivers are in play?
- What business restrictions exist?
- Are there any outside forces to consider?
- Who needs to be involved?
- What is the end goal and how will we achieve it?
- When do we need this done? Any timing considerations?
- What do we know about opposing counsel?
With these answers, the overall case plan is mapped out.
Once the scope is determined, discussion can move to forecasting costs. Outside counsel should be ready to show how the financials and earned experience go into determinations regarding typical cost. This is also the time to consider use of an Alternative Fee Arrangement (AFA). Using an AFA is the ultimate way for a firm to partner with in-house counsel to share risks and gains. During these discussions, the elephant in the room needs to be front and center. In other words, if there are clear budget-busters, a good LPM process will identify them and include them at the top of the budget so that if and when they occur, they can be quickly managed.
Many tools exist to help with budget creation and the budget monitoring process. Our firm created our own software program, OneBudget, that draws directly from accounting systems to help deliver real-time budget information and management. Whatever tool is proposed, outside counsel must make sure it will be used daily by all attorneys at every level in order for the tool to provide value to in-house counsel.
Schedule: Matching Talent to Task
Scheduling is the people-side of the equation in the LPM process. This involves the critical questions of who is doing what, how is it moving the project forward, and can it be done better and more efficiently. In other words, legal work in the LPM process needs to be intentional through the use of best practices. The right LPM manager will pick the right person for the right work and then share the results broadly to each team member. Good LPM processes also entail using critical thinking to make sure that in-house counsel’s end goals are being advanced efficiently and creatively.
LPM is a holistic approach to legal work. By working collaboratively through the LPM process on scoping, budgeting and scheduling, outside counsel’s client teams draw on the knowledge of the entire team, including that of in-house counsel. The best LPM processes will enable outside counsel to manage cases efficiently and responsibly, while continuing to build on the overall value and results they provide to their in-house counsel clientele.