Originally published on October 5, 2009 in our free BigLaw newsletter.
Phrases like "today's economy" and "cost cutting" have become cliches in the large firm world thanks to their prevalence. Law firms continue to defer the start dates of new associates, reduce salaries, eliminate lockstep salary increases, outsource secretarial and other support functions, etc. The lust for thrift cuts both ways. Clients, fed up with the high cost of legal services, seek to reduce their bloated bills. Many demand "alternative fee arrangements," suggesting to some that the billable hour is on its last legs.
But all of these cost-cutting measures present certain challenges. Associates, after all, remain a necessary component of legal services, and outsourcing can result in poor quality control. And, while alternative fee arrangements may pose a viable threat to the billable hour, reports of the latter's death are greatly exaggerated to use another cliche. How, then, can clients — and the law firms who love them — balance their needs in "today's economy"?
Legal Project Management to the Rescue?
One emerging trend is the movement toward efficiency (rather than hours-driven profit) and the bundling of legal services. The movement toward Legal Project Management (Discovery Management) serve as examples of how the provision of litigation services can streamline operations and reduce costs for all involved.
Steven Levy, until recently a Director at Microsoft and now a principal of Lexician, describes Legal Project Management in a recent post on his "No Secret" blog. "Legal Project Management ("LPM") is a new field," writes Levy, which "at least for firms serving corporate clients, is not about the practice of law per se, but about the mechanics of that practice. As such, it goes counter to almost all of what attorneys have learned at law school and in the practice of law since getting that precious JD
According to Levy, the traditional focus of law firms has been on "doing whatever it takes," "doing whatever the client asks," and billing for these functions on an hourly basis. In addition, he asserts, lawyers have tended to focus on their role as legal advisers, ignoring the necessity of project management and viewing their role as one restricted to solving their clients' "legal problems, not their business problems" But, Levy asserts, in an age in which many corporate clients find themselves "being pushed by the recession," firms need to respond. So, he says, "smart firms are turning to LPM," which envisions a "new approach" to the usual imperatives of client service.
Under the LPM model, Levy explains, the first discussion with the client should concern "what their goal is for this matter, what they and we need to do to be successful, and what they will spend to achieve that goal." The focus is still on doing "whatever it takes, but only if it moves the ball toward that goal." LPM contemplates billing models geared toward efficiency (not just racking up hours), project management techniques, and approaching the legal problems of any "business" client as a "business problem."
The Electronic Discovery Field Leads the Way
While LPM may seem somewhat abstract (Levy notes that he is reluctant to call it an "emerging field, but you have to first crack the eggshell before you can emerge"), other, more concrete, examples of this emerging trend exist. In the area of electronic discovery, for example, forward-thinking companies are focusing on a complete, "soup to nuts" approach to document review and production, designed to reduce costs by minimizing the number of vendors and streamlining the process of document review and production.
In the past, says Kristen Johnson Gluck, Director of Business Development at Excelerate Discovery, clients might use one vendor to process and analyze their electronically stored information, another to supply their review platform, and a separate staffing agency to provide temporary or contract reviewers.
But, Johnson Gluck explains, "this is not necessarily the most efficient way to manage a project. With each additional person, company, or vendor, the chances for miscommunication increase." And, she says, "clients are looking for a more efficient method. Companies that offer pull to production services can provide this by familiarizing themselves with the universe of data from the outset, staffing the project intelligently based on their estimate of the work involved, and providing a review platform tailored to the project."
Another added benefit? "The predictability of pricing when you have one vendor handle your document review and production from beginning to end," says Johnson Gluck. If you have an overview of — and are familiar with — your client's needs, you can provide a better estimate of costs. Because your approach is specifically tailored to those needs, you can offer much better value." The days of unbridled expenditures and spiraling costs are over, according to Johnson Gluck. "Nowadays," she asserts, "less is more."
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