Skilled Scoping Diminishes Discord: Cutting Corners, Part III

by Pamela Woldow
Contact
Note: Due to the numerous and passionate responses to the first two posts on Cutting Corners, we have added Part IV to the series in which we will highlight the insightful (but profoundly divided) points of view we received from In-House Counsel and Law Firms.

In the first two posts in this series, we considered the typical law firm complaint that such efficiency-producing disciplines as Legal Project Management (LPM) and Legal Process Improvement (LPI) may actually encourage legal “corner-cutting.” Does this complaint reflect a valid concern about threats to quality of service, or is it mainly the cry of pain of firms now caught in a billing squeeze?

Who Defines the Bottom Line?

The hard truth is that the quality-versus-cost debate actually is over. In the aftermath of the global financial crisis and its draconian impact on legal budgets, almost all clients are re-evaluating their definitions of value and quality – with a constant eye on costs.

ln all manner of engagements clients wield the whip hand: they are imposing unprecedented direct constraints on legal spend, as well as pursuing new avenues for addressing basic legal needs more cost-effectively, including alternative fee arrangements, expanded use of technology, convergence programs, pulling more work in-house and sending more work to alternative service providers.  As just one example, the latest BTI Consulting Reportnotes that for IP work in 2015, in-house counsel can be expected to aggressively turn to settlements, alternative fee arrangements and efficient new work processes to keep costs in check. The result? A lot less IP-related revenue for law firms, which obviously does not make them happy.

Front End Scoping Beats Damage Control Any Day

However, firms will not improve their profitability by complaining about client-driven approaches to improving productivity and value.  Trying to position LPM as a scapegoat by claiming it erodes quality will neither improve service quality nor enhance client relations.  The parties will be better served by learning to work collaboratively to define the scope of work and the degree of risk that scope implies. This definition, in turn, will frame the amount of lawyering, billing, and overall legal costs the client will tolerate.

Rather than suggesting that the parties blithely ignore risk assessment in the name of cost savings  – now that would be cutting corners — what LPM suggests is that client and law firm jointly scope and prioritize potential risks both at the outset and during an engagement.

After instituting mandatory scoping discussions whenever the legal department assigns work to outside counsel, the General Counsel of a global hotel company found that outside counsel really focused on the client’s goals, chased fewer rabbits, concentrated work to advance the goals, and provided significantly more useful advice.  And, not insignificantly, there were fewer billing disputes.  The GC noted, “law firms did not take the reigns with scoping even when we asked them to.  Instead, we decided to lead the way because upfront scoping is the best practice for effective use of our budgets.”

Once law firms accept that today’s rules of legal engagement no longer support carte blanche lawyering except under extraordinary circumstances, LPM provides a bridge for aligning all parties’ content, cost and quality expectations. Time spent at the outset defining in-scope and out-of-scope activity will both diminish the likelihood of scope creep and result in less surprised and angry client responses if unexpected events threaten the budget later on.  And, BTW, it reduces those pesky write-downs and write-offs that erode profitability.

Houston, We Have a Problem

The problem is that most law firm lawyers are pretty dreadful at scoping. Sophisticated scoping involves intensive front end engagement with the client. It also requires the courage to embrace change and examine alternative service delivery approaches, rather than defaulting to the-way-we-did-it-last-time pricing and planning. Yes, good scoping may require a considerable investment of front-end time and effort, but it helps avoid charges of either overlawyering or corner-cutting down the road.

This is because the parties have taken the time to discuss not only project phases, tasks, costs/budgets, and desired outcomes, but also how the client will define quality and value at every step of the engagement. The client – now fully informed – can make informed decisions about what work should be deemed in or out-of-scope.  If nasty things happen down the road, a fully-informed client is unlikely to allege malpractice.

Any risks incurred by initially limiting which tasks are undertaken and which are bypassed can be diminished by carefully discussing both the likelihood and the potential impact of alternative courses of action or various unexpected events. Indeed, we know of several instances where firms expressed concern that omitting certain activities might create malpractice exposure, and the clients agreed to indemnify them or hold them harmless for any consequence deriving from leaving certain T’s uncrossed or I’s undotted.

All in all, it makes little sense to blame Legal Project Management either for today’s dramatically altered legal landscape or for the realignment of the bargaining leverage between clients and law firms.  LPM is a response to these changes, not their cause. The best way to align issues of quality and cost is to discuss them in detail early and often, rather than have the parties sling great handfuls of mud at each other.

 

 

Written by:

Pamela Woldow
Contact
more
less

Legal Leadership on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.