FacultyFaculty/Author Profile

Getting Partners on Board to Use and Champion LPM


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SUSAN LAMBRETH: OK, welcome back to PLI's program on project management and our afternoon session, "Getting Partners on Board to Use and Champion LPM." Before I go through a few slides. I want to introduce our panelists for this afternoon session that were not already on earlier in the day.

To my immediate right is Scott Pedigo. He's the office managing shareholder at Baker, Donelson, Bearman, Caldwell, and Berkowitz. He represents manufacturing and commercial clients in employment, consumer products liability, and commercial litigation matters. In addition to his litigation practice, he regularly assists clients with appropriately addressing and limiting the risks associated with difficult employment issues and investigations, contract disputes, product safety concerns and recalls, and has extensive experience in defending employment discrimination claims.

In the middle-- you can see, the three women on the panel were introduced earlier today. So Greg Lantier, in the middle, is a partner with WilmerHale. His practice focuses on intellectual property and other complex commercial litigation and counseling at the trial and appellate stages. He also advises clients regarding intellectual property licensing matters and assists clients in connection with legislative and executive actions affecting intellectual property interests. He has successfully litigated many "bet the company" matters, leading teams of dozens of lawyers to trial. He serves clients in the financial services, computer software, medical device, telecommunications, defense, semiconductor, pharmaceutical, biotechnology, and other industries.

And then the gentleman on the far end, Timothy O'Leary, is a shareholder with Sandberg Phoenix, and Von Gontard. He has extensive jury trial and appellate experience, but also achieves successful results for clients through alternative dispute resolution processes such as mediation. He has substantial experience working in a wide range of cases on matters in such areas as insurance, attorneys, medical professionals, accounting professionals, high-tech companies, construction, employment, education institutions, municipalities, and real estate. He has been certified by the Claims and Litigation Management Alliance as a litigation management professional. And he currently leads his firm's legal project management initiative. Prior to joining Sandberg Phoenix in 2008, he was a prosecutor for the city of St. Louis and, as first chair, has prosecuted more than 40 jury trials.

So our panelists will speak in a few minutes about their LPM initiatives, as our earlier panels did. But before we turn to that, these are the topics we plan on covering today on this topic of buy-in. And I wanted to just share a few slides to kick this off.

You heard reference earlier today to something called the CLOC LPM initiative. And so CLOC is the Corporate Legal Operations Consortium. It now has about 1,000 members. And they are in-house lawyers and legal operations professionals that are involved in running the business side of the legal department. And the organization has grown very rapidly. And they are rolling out best practices approaches to different topics that are of interest to in-house lawyers and outside lawyers.

And one of them is focused on LPM. And it's called the LPM Initiative. So some of our other faculty today and myself have served on this CLOC LPM initiative. And they put together, as part of that, a PowerPoint presentation that they call the business case for LPM from a corporate law department perspective.

And I like this particular slide, that the myth-- as they saw it-- was that LPM was perceived as complex. And you've heard lots of examples today of how simple approaches can be applied. But the reality is LPM is what lawyers already do, only more systematically and using the language of clients, which is really what we've been talking about since the beginning of the day. And so that is one of the themes that is important for getting partners on board-- getting anyone on board, is helping to understand that they are simple concepts, and that it is using the client's language.

Another slide from that presentation was along the lines of the thinking that a project manager is going to be, basically, just doing lots of documents and kind of administrivia all the time. When in fact, as you've heard our panelists talk about, it's much more about enhancing the communication that we have and speaking the client's language.

So key aspects of making the business case for legal project management-- we find there a couple of important aspects of that. One, on the law firm side, at least, has been the fact that legal project management can be used to reduce the very large write-offs that I mentioned earlier today. So for many on the law firm side, they've been able to sell it internally with the idea that it can help bring down some of the write-offs, where they've given the client a number and then the matter hasn't been managed to that number. And they're having to write off any excess.

So bringing those write-offs down has been a compelling part of the business case in many law firms, the client business pressures that you heard earlier, of course, being another part of that. And certainly, it helps when-- if you're on the law firm side-- if your clients are starting to really push for LPM, or, as many of our panelists have talked about, push for other things-- predictability, efficiency, transparency, consistency, other terms they may use, but that all can use LPM as a way of improving in those areas.

And then another driver that we've seen in some organizations has been for people that want to differentiate, where there is a partner who recognizes that their particular practice is particularly competitive. And this may be a differentiator, as we mentioned earlier, that there's still an opportunity. Until every legal organization is implementing this thoroughly, there's still an opportunity to use LPM for differentiation. I mentioned this a little bit earlier, but ACC, the Association of Corporate Counsel, did a report back in 2009. So this report was published in 2009, worked on before that, so really in process, coming out of the value challenge, before the recession hit.

And in that document, that report on project management, they talked about what clients looked for from their lawyers. And the old normal was substantive legal expertise, the good lawyering, as it's been talked about today. But what they were looking at then-- and that "then" was almost 10 years ago now-- was not only that substantive legal knowledge as that foundation, but beyond that, the business acumen and then efficiency and predictability. As I mentioned earlier, what we're seeing-- and I heard this certainly from Stephanie and her team-- is that the in-house lawyers are expected to also demonstrate that same kind of business acumen and efficiency and predictability.

So some of the key issues for partner buy-in adoption-- I think you'll hear different panelists talk about this today. Overcoming skepticism, whether it's using pilots. Many firms, as you've heard talked about today, use pilots, use some of the data to help overcome skepticism, whether it's data on the profitability of matters, data on spend, other data on inefficiency. The risk management companies are certainly pushing this, because they have seen that their data shows that many of the claims come from a failure to communicate, failure to document, failure to manage risk.

Another part of it is communication incentives and disincentives, so ensuring that our incentive system is aligned with the right kind of behavior. So someone mentioned this morning adding matter profitability to their partner compensation criteria, then incentivizing people to be more interested in the efficiency and profitability of the matters. Having internal champions and firm leadership support, you've heard about today. Ease of use is another key for buy-in-- templates; technology models; professional support, as you've heard from people who are implementing this, or the leaders of these initiatives; and then data overall.

So with that as background, we're going to take a few polling questions. And then I'll turn it to our first speaker to talk a little bit about their LPM journey. So if we can bring up the polling questions. Whoops-- that was one from this morning. So we need-- there's a polling question that was up on the screen a few minutes ago, before we got started. And I'll read it to you in the room-- what ways has your organization used to get lawyer buy-in to LPM? Again, if you don't have the polling part of your iPad open, if you can open that and respond to the question, and those of you online as well.

OK, so for a large percentage, not really applicable-- they're not implementing LPM yet. But 15% used meetings to explain it. 12% with pilots, which is something we've seen is a common way of approaching it.

OK, the next question-- have you or your organization seen improvements in the efficient handling of matters using LPM approaches? So yes, to a significant degree; small degree; haven't seen improvement yet, but we're still too new in implementing it. Or again, if you're not sure-- in terms of what your organization is doing-- that's an option as well. OK, so many new, but 12% have seen a significant impact of using LPM approaches, and another 12% to a small degree.

And next-- if you have an LPM program or initiative, have you measured adoption in any way? OK, so 12% have measured adoption, and 40% no. And others, again, not sure what their organization's doing.

I'm going to skip the rest of the polling questions related to that-- because most of them had to do with how firms were measuring-- so we have more time for the panel. I realize, we should have had our panelists responding on these questions too, because they're some of the most advanced firms on these issues. And I'm going to turn it to Greg first, to talk a bit about what WilmerHale's done. And let's see-- I'll hand down the vote.

GREG LANTIER: Sounds good. Thanks, Susan. So I'm Greg Lantier. As Susan said, I'm a partner who does litigation, mostly on patent and other IP disputes at WilmerHale. And we're a firm of about 1,000 lawyers in 12 offices around the world, mainly in the United States. But we have offices in Europe and Asia as well. Just to give you a sense of the type of firm we are, we have about 500 litigators, about 200 lawyers doing securities work-- there's some overlap with litigation there, about 100 lawyers doing regulatory work, about 200-ish lawyers doing corporate work, and then a smattering of others in other specialties.

So it's a firm that has a broad range of practices. And for that reason, I think we had some unique challenges when it came to developing LPM and encouraging adoption of it. We've been doing LPM, in one way or another, for-- in some ways, as long as I can remember, but at least the last eight or so years. We formally, though, started with a very intense focus on developing a formal LPM program about 3 and 1/2 years ago, in 2014.

And what we decided to do at that point was a few different things that have turned out to work well for us. The first thing we decided was, we were not going to impose any rigid requirement on anybody when it came to LPM. We wanted our approach to be flexible, because we thought it would help encourage adoption. And we knew that there would be no one-size-fits-all type approach to LPM that would work for all of the different lawyers of different generations working in different practice areas on different types of matters. And so we wanted to make sure we kept things flexible.

We also knew that everybody in the firm, and the partners in particular, always feel like they're very busy. And hopefully, they are. But whether they are or they're not, they feel that way. And so we knew we needed to keep things simple, and make it such that it was a clear win from a cost benefit perspective for individual partners to use LPM and what we had in place.

And then finally, we wanted to make a program that was scalable, because our hope was that over time we would have broad adoption. But we didn't start in 2014 with the assumption that we could impose LPM from the top down and it would be quickly adopted. And so what we did was start small, and grew from there.

We have had good success. At this point, over 80% of our US partners are using our LPM program for at least some of their matters. The ones who are not-- it's generally because their clients don't require it. And they're getting paid what they're billing already. And so there's not as much of a pressure from the outside-- or from the inside-- to adopt LPM-type procedures.

What we did, as I said, was start small, and then tried to evolve over the course of several years. And I think that when we embarked on this originally, we sort of had a feeling that it would take a few years to get things in place. But once we did, it would all be put in place. Great-- we could set that project aside. And we would have mastered LPM. And then we could move along.

I think what we've realized over time is that it's just like the practice of every other aspect of the law, and that is that we are going to continue to be working on how we do LPM for the foreseeable future. From my perspective-- and I'm a practicing litigator, so most days I try to spend as little time on LPM as I possibly can, and maximize the number of hours I have available to work on developing legal positions and things of that nature. But from my perspective, there's really two key aspects of our LPM initiative. And they're similar to what others have talked about.

The first is, we have a technological component. And we decided at the outset to develop our own technology in-house, rather than to purchase from a vendor LPM software. And so we've developed our own technology internally. It's allowed us to be flexible. It's given us a lot of ability to do things iteratively. And so if some aspect of the software isn't working right, we can adjust it quickly and do it in a very tailored way.

The other aspect of our LPM initiative is human. We have, at this point, 30 certified LPMs. They work on case teams. As I say it's never imposed. So nobody's ever required to include an LPM on a case team. But I will say that we've had very broad adoption. And we have more demand than we have supply. So it's something that has taken off quite well.

I'll touch on other aspects of our program as we talk further. But I'll pass the baton, now, down to Tim.

SUSAN LAMBRETH: You've got couple more slides. Do you want those, or just skip over to him?

GREG LANTIER: We can skip through them.

SUSAN LAMBRETH: OK.

TIMOTHY O'LEARY: Me or Scott?

SUSAN LAMBRETH: I'm sorry, it goes to Scott.

SCOTT PEDIGO: I'll hurry.

GREG LANTIER: My mistake. Thank you, Tim.

TIMOTHY O'LEARY: Sure.

GREG LANTIER: There you go, Scott.

SCOTT PEDIGO: Thank you.

SUSAN LAMBRETH: Should have lined people up the way-- to make it easier to pass the remote. Sorry about the background noise. I know they're working on that. So I know, it's a little distracting.

SCOTT PEDIGO: Well good afternoon. My name is Scott Pedigo. And I am with Baker, Donelson. I will give you a little bit of background about Baker, Donelson's involvement with LPM, and then my personal exposure to it. I'm the office managing shareholder of the Jackson, Mississippi, office of Baker, Donelson. We've got about 70 lawyers there. Baker, Donelson has about 20 offices across the Southeast, up to DC and Baltimore, 750-plus lawyers.

We have had a dedicated LPM office since 2010. That developed as a result of a variety of things that really were bubbling up over the years. First, in the early 2000s, we were trying to come up with solutions to deal with the increase in alternative fee arrangements, and getting away from the hourly billing. As everybody here, if you're in private practice, probably recalls-- feeling the increasing pressure on lowering costs and becoming more efficient as we went through that decade, really culminating in the Great Recession of 2008 and '09. And that's when the pressure really was on.

Around that time, we fortuitously were involved in some projects involving disaster recovery that utilized project management to a great degree. And our folks involved with that saw the need and the possibility of applying those techniques to legal services. And so we had a couple of partners really push it with our chief technology officer. And we developed our own software, called Baker Managed, that's built on a SharePoint platform that is a legal project management system that we developed in-house.

And we continue to improve it. It's evolved over the years. It started out being by request-- either by clients or by attorneys. It was improved and modified as we got feedback about it. A few years ago, we came up with a new budgeting tool that we installed with it. And this year, we've moved to rolling out a project management site-- for lack of a better word-- for every matter that we open. That doesn't mean it's used for every matter, by any means. But at least the tools are there, on the matter site, on our firm intranet that we use. And so we're hoping that will fuel continued use and adoption of it across our firm.

We have invested in LPM because we believe clients want and deserve greater predictability and accountability in the cost of the services we provide. And we think it's doing that. We think that clients deserve innovation, so that we can always improve how we're delivering services.

And the real benefit of it that I see, and that we've seen, is this. I mentioned earlier that one of the driving forces was reducing costs associated with the services we provide. But the way I see it is, it's a way to reduce costs but at the same time provide even better services. A lot of times I think you run into this problem. If you want to reduce costs, there's an incentive to cut corners, or spend less time, or whatever.

And you do not want that to happen. You want to improve the services you're providing, but squeezing efficiency out. And I think LPM does that, by giving you a uniform platform to plan what you're doing, plan the cost, be able to track the matter to the budget and the task to the budget, have a record of all of that as you complete the matter and projects, and then look back and see how you can improve it for the future.

Let me talk a little bit about how I have personally used it. I'm a litigator. And so I've used it in traditional litigation cases to manage matters, from the budgeting to the management of the matter to the close. I've also found it-- and really, I personally adopted it first in this context-- I've found it very helpful in the just counseling and advice work that I provide. I have clients that have various people calling me from different locations with different problems. And having a uniform spot where I can manage all of the varying projects that are ongoing has been very helpful to me. And for years, I was looking for a tool to be able to do that. And I finally, about four years ago, really found the Baker Managed platform that we have to be the most useful tool to do that.

And then most recently, while I'm not a transactional lawyer by any means, I do have one client that came to us with a need to handle a portfolio of what I'd call routine real estate transactions that-- at any given time, there may be 10 going on. There's a life to them, that we have to keep up with certain benchmarks and deadlines associated with the transactions, because there's a loan component that's forgiven over time if certain milestones are met.

But what we did was develop an online workflow to be able to track each of these transactions as they progressed, so that you go to one spot and really see where each transaction stands at any given time, and built-in or automated reminders about things that you need to do as time passes. And it's been very helpful for me to be able to keep up with that and monitor the team that's actually doing the work, because I'm not a real estate lawyer. But the client does come to me with questions about the progress of things like that.

And I've found it very helpful. And so I've used it in a lot of different contexts. So hopefully that will give some good perspective to the audience. So thank you.

TIMOTHY O'LEARY: OK, my name's Tim O'Leary. What did I do? Did I just hit the wrong button?

SUSAN LAMBRETH: No, it's OK. They're changing the slide.

[LAUGHTER]

SUSAN LAMBRETH: Sorry.

TIMOTHY O'LEARY: All right, I'm Tim O'Leary. I freaked myself out just now. I'm a shareholder at Sandberg Phoenix. And I've attended LPM roundtables in the past, in rooms just like this. And I know we have folks online as well. And I've always been awestruck by the accomplishments of my colleagues up here, and the things that their firms have been able to do. They really are cutting edge. They really are the leaders in LPM.

And I remember sitting down and thinking, that is fantastic. But I don't work in a 600-person law firm, much less one with 1,000 lawyers. So how is this relevant to me? And I'm here to tell you that it's not just for big firms anymore. Legal project management is relevant to smaller firms as well.

Now, to give you an idea of my firm, we're about 140 to 150 lawyers. Our regional footprint really only extends over three states, which is Missouri, Illinois, and Kansas. We have several offices. But our primary offices are in Kansas City and in St. Louis, with our main office being in St. Louis. So we don't have a big national presence, or even international presence, like my colleagues up here.

We have four practice groups, which are business, business litigation, health law-- which is essentially medical malpractice, and products litigation. And underneath all of those business practice groups, like most of your firms, we have teams that are underneath those. And so that's kind of how our structure is.

So why is LPM relevant to smaller firms? Smaller firms of my size really aren't seeing pressure from the clients to implement LPM, like my colleagues. A lot of it is client-driven for some of the larger firms. That's not really the case for firms of my size, at least in my experience. So why do we need to do legal project management?

Well, we had a managing partner that attended a managing partner meeting. And they started to talk about LPM. And he immediately saw that it is the future. The future is here. And the future is not going anywhere. Firms like my colleagues' up here generally set the trend for the legal marketplace. And it takes time, but inevitably, it always goes down and becomes relevant to smaller firms.

So my managing partner saw that even though it's not, right now, for us something that's being demanded by our clients, it's something that could set us apart from the people that we're competing with in our marketplace, with firms in our relative size. We can go to our clients and show that we are doing this. And we're not just checking a box. We are actually putting together-- we're spending time and we're spending money, and we're putting together a meaningful legal project management initiative in our firm.

Now, my managing partner also understood that legal project management, importantly, gives value to the client. It can give monetary value by increasing efficiencies, and all the other things that you've heard people talk about up here. But it also has intangible value. They know that we care about them as clients, because we're spending the time and we're spending the money to increase efficiencies, even though they're not asking us to do that. It's important that we can demonstrate that to our clients.

And of course, improving efficiencies, but we also saw an opportunity here to enhance our firm talent. When you're going through the mapping process-- and I'll talk about what we did in a little bit-- but you really can assess, do we have the right people working on the work or assigning them? Do they like it? Right? Sometimes stuff just gets assigned. And you don't really ask the associate, is this an area that you're actually interested in? If you get people that are interested in the law that they're doing and they have the skills to do it, you can better place your talent to do the work that's coming into the firm. And we think that's really an important component to the process that we've gone through.

Now, we kind of have a different buy-in, because this really started with our managing partner. And the managing partner-- we happened to be redoing our strategic plan at the time. And he put legal project management in our strategic plan as something that we were going to focus on during the coming years. And we didn't even know what legal project management was at the time. It was just-- it impressed him so much that we put it in our strategic plan without any idea of what it meant. And then he got the executive committee on board, and the practice group leaders. And all of those people were on board to help us move forward.

So the next step was-- Tim, would you like to head up our initiative for legal project management? He said it in the kind of way that's not-- would you like to, but-- you're going to, and even though I had no background in legal project management other than what I did in working on my own cases. So how hard can that be?

Turns out it's really hard. We sat around. We got some books. We looked at technology. We thought, hey, we'll just put something on and we'll be done. And that's legal project management-- mission accomplished. That did not work out well. It took very little time to understand-- we are way out of our depth. We don't know what this is. We need help.

So what we did is, we did a request for proposal to a variety of firms, including LawVision. We spent a lot of time talking to all the prospective folks that could come in and teach us how to do this, and help us define what legal project management should mean for a firm of our size, with our goals. And ultimately, it was a very valuable process, because we learned immediately, there's a lot of different ways to attack this animal.

But we were really comfortable with Carla and so we went with LawVision. And what Carla did is, she asked us to identify some of our teams that we thought would be helpful to go through a pilot program with. And so we picked two teams. We had one team that was very sure that they had really good processes in place. Didn't really want to do it, but I know the guy that started that team. And I said, would you just do it? Just go through the process, man. I need to find some teams to do this. And he said, OK.

And he has become a cheerleader for legal project management, because he understood, when he went through the mapping process, that there were improvements that could be made in how they handled the work. And they really thought they were good at what they did. And they were. But there were improvements to be made. We were leaking billing opportunities. We were not as efficient as we could be in some of the ways we handled the work that needed to be done.

And so it was very effective. And in these meetings, by the way, we had the partners, we had the associates, we had the paralegals. And we brought in our accounting people, the people who knew what our software was, because we didn't really understand the capabilities that were already in our firm that we could use to help implement our legal project management system.

So instead of going out and buying software that we would then develop a legal project program around, we developed our legal project management program where it was able to use a lot of our existing software. And as we get better-- we're only about a year into this. As we get better, then maybe we can look at software to supplement the program.

So I absolutely agree with everybody on the panel that said going out and buying a bunch of software isn't really the answer. It's really getting the processes in place. Then if you need outside software, then you can buy some stuff to supplement it or develop your own.

The other pilot group, by the way, was with a difficult partner, difficult personality. I don't think he was excited to do it. I don't think he wanted to do it. He's a little bit of a naysayer, on a lot of levels, in the firm. And he too, having gone through the process, is a real cheerleader for legal project management. And I think there were some partners that may have been a little reluctant for the investment of time and capital into a legal project management program. But when that partner came through on the other end of the program we did with Carla, and came out as a cheerleader for LPM, I think he put those people to bed. I don't see there's going to be a big problem, because if this guy found value in it, everybody is going to find value in it.

So where we are now is, we're in the process of picking two more teams. And we're kind of getting with Carla. We talked about it yesterday. We've been talking about it for weeks, about our next steps. And hopefully we can get a couple more teams trained, and then bring it in-house and find ways to measure the successes.

We need to work a little bit better on getting our metrics down. Task codes are being talked about. Nobody in our firm really puts in task codes correctly. And so our metrics aren't that strong. So that's really an early tackling thing that we need to do. And that's certainly on our agenda.

But in the end, legal project management provides tangible value to the clients. And that is reason enough to take it seriously and to develop a program for your law firm, regardless of the size.

SUSAN LAMBRETH: OK, thanks, Tim. OK, now we're going to turn-- well, actually, before I can do questions for the panel, anyone have a question first, for each of the presentations they made? Yes?

AUDIENCE: [INAUDIBLE]

What are some techniques that you use with those partners to get them on board?

SUSAN LAMBRETH: So the question was, for partners-- where Tim described partners that were naysayers at the outset, but after going through their pilot became cheerleaders for it, what were some of the things that caused them to become cheerleaders?

TIMOTHY O'LEARY: Well, really, what it was is I think they found value in the mapping of their processes. I think they saw value in how they can on-board new people to those teams with a lot more efficiency. And everybody understands where they fit in the process. That was something they really enjoyed.

Another thing they liked-- this particular partner had a client with really crazy billing codes. And we didn't have the billing codes in our-- we had Elite. And they didn't have the correct billing code. So they would have to type in these codes in their billing entries. And we're like, that's crazy. But they never asked accounting if they could create new codes based on what these clients needed. They just never thought to ask them.

Having everybody in the room, that problem was solved in a half hour. I mean, it was nothing. And it was such a major, like, light bulb on him-- there's value just being in a room with all the stakeholders and all these people that know how to do the work-- that he was sold right then and there.

And he's come out of it-- he has a team that loses a lot of people, a lot of people come in. It's just the nature of the practice that he has. And he's had a lot of success in onboarding new people. I think his people have become more efficient, because they understand where they fit in. He wasn't really good at having team meetings and explaining everything. He would put a file on your desk. And then you're responsible to go ask other associates how you do it. He's one of those guys.

So this really-- just going through the process-- and understanding it takes time to do it. But once it's done, there is definite value there. And it can carry itself, provided you continue to have the meetings and make sure the initiative isn't lost. So we've been taking good efforts. And we have monthly meetings with him to make sure he's met with his team. And we make sure what he's talking about with his team, to keep the initiative going. But he's been a cheerleader. And I've got to tell you, I was stunned by it. I wouldn't have thought he would have been.

SUSAN LAMBRETH: Great. Any other questions, before we pose some to the panel? OK.

Well, Greg, you mentioned that you've got, I think, 80% of your partners using some aspects of your legal project management or matter management program. How did you obtain partner buy-in? And how did you get the lawyers to invest initial time or initial legwork in getting project management going?

GREG LANTIER: Sure. So I think there are a few different answers to that. And none is true for everybody, or the specific reason why we've had the success that we have had in getting adoption.

Going back to what I said earlier, I think one of the things that we were very focused on was making things simple and easy for partners, as well as valuable. And so it's sort of along the lines of-- I didn't have time to write you a short letter, so I wrote you a long one. We spent a lot of time internally trying to come up with ways to present data to partners that would be useful to them, but not overwhelming, and also presented in a variety of different ways so that partners could select very quickly from a menu of different options for matter metric data, that they could then receive on a weekly or whatever periodic basis they liked.

And I think that that was a very important first step, because what it did was it built a level of trust, I think, between the partners and the legal ops group that was working on our LPM initiative, because every lawyer, I feel like, at the firm wants help with their matters, and managing their matters. But the concern is that you sign up for something and it winds up not being help, but rather being onerous and rigid-- not very helpful but, at the same time, quite time-consuming. And you've gone backwards. And I think by making sure that we had presented information in ways that was very useful, very direct, and didn't take a lot of time to process, that helped to get partner buy-in. And once partners started to actually use that matter metric data, I think it encouraged them to start to use the other options that we have available inside the firm to help with LPM.

Another thing we did, and it sounds like many have done this, is we had some early adopters-- I was one of them-- who tried the program early, focused on it, gave feedback early on, before we tried to do a large-scale rollout to the entire partnership. And what that enabled us to do was first, work out some of the kinks that are inevitable anytime you start a program like this, but also to have some early successes that we could then use to convey the value of LPM to other partners within the firm.

And then I'd say the third thing we did that turned out to be the right decision-- and I mentioned this before-- is we never made anybody do anything. So it's always been something that we've offered. We've tried to educate partners about what's available. But we've never said to anybody, you must do this this way. And so we've had sort of organic growth. And I think as a result, that folks, when they've picked up LPM and they've started to use the different tools, they felt like they did it because they thought it was the right thing to do for the client for that matter, and not because somebody in the management of the firm was imposing just one more administrative obligation on them.

SUSAN LAMBRETH: Great, thank you. Stephanie, you described a very impressive program at your organization this morning. How did you go about getting buy-in to implement your legal project management efforts and consortium within your organization?

STEPHANIE HAMON: So unlike what Greg just described, when you are in-house, and not in private practice, you don't have a partnership structure. You have a corporate structure. So when big boss say jump, people tend to jump. And I must say, that helps. I think that big top-down mandate is-- a little bit like what Tim was saying, we have a GC that has got that vision, and is really clear that we need to run our legal function as a business. And that is one of the fundamentals of it. So that's a very strong message.

It couldn't just be that just top-down, though, because what we're trying to do with LPM is also changing behavior, changing mindset. So if it's enforced and imposed on people, you're not going to have the entirety of the function embracing it. So we need a bit of a bottom-up approach as well.

So we run pilots. So that's where we started with our investigation matter. And what we did was making sure that those lawyers that were sticking their neck out, in a way, also got recognition from senior leadership. They got a lot of air time. And they got recognition for it.

So then what we saw is other lawyers in the function-- call it competitive edge or a form of fear of missing out, but they wanted to join and be part of the cool kids' club. And what you have to, I think, bear in mind a little bit, too-- the casing question earlier-- depending on who you talk to, the numbers are different. But you've got a 30-30-30 rule, or 20-60-20. Basically, no matter what you do, 30% of the people are always going to be happy and follow you. 30% are never, ever going to change, whatever you do. What you need to do is concentrate on the swing voters in the middle, the one that you can actually try and make buy into what you're trying to do.

And it's really changing this behavior. And here-- actually, we were just discussing with Greg before-- it's just the face-to-face time, just spending time embedding it and articulating for each of the individuals what's in it for them. Make it relatable to them, because there's not one size fits all. So it's really, what's in it for me? Why should I do it?

I think it was Tim as well who used the word admin. And one of the tips we could give [? Caitlyn ?] is-- indeed, initially, lawyers will see that as admin and boring, and that's not part of my job. I didn't become a lawyer to do LPM work. For Christ's sake, I just want to study law.

So the way we did it, as well, was to start with almost being more facilitators. Look, let me take that piece of admin away from you. It's annoying for you. It's not a good use of your time. You're far more clever, far more important. I've got people that can do that for you.

And then you just creep your way up the value chain. Say, well, actually, now that I've done that for you, maybe I could help you there. And you just suddenly more and more play into it.

And I have to say, for some of the naysayers, actually, in-house, sometimes our law firms have been our best partner. Because we had law films that were really good. And actually the pull-- or the push, rather, was coming from the law firm to our in-house lawyer. I had a couple of law firms calling me and say, Stephanie, you tell us you are LPM and you want alternative fee arrangements. Your lawyers just don't want it.

So my nickname internally, and with some of our panel firm is Scary Stephanie, because I'm usually the one sent to deliver the message nobody really wants to hear about. But that's a bit of a carrot-and-stick approach. But that's how we've been doing it.

And we talked a bit about data, the power of data and just being able to articulate, black on white. What is the impact of what you're doing? And our GC, actually, has been quite blunt lately. I was saying this morning how we're looking at the total cost of legal. So you've got internal cost-- basically headcount, our lawyers-- and external spend. So when you're talking to the business, because they don't really understand how we engage external lawyers, they say, well, oh, just cut headcount, because then you're going to reduce costs.

And what we've been demonstrating to our function internally is by managing external cost efficiently, we have saved headcount. And we've got evidence of that. So suddenly, they realize-- well, actually, if I do LPM right, and I do my pricing right, I might just help keep my job. So that is a quite powerful incentive.

And I was a bit shy about saying it. But our GC has just been really going out there and saying, look, that is related. Last year this is how much efficiency we've delivered. And as a result the CFO has told us, you can manage it the way you want. I'm not going to ask you any more for headcount reduction. That, I can tell you, is quite powerful too.

SUSAN LAMBRETH: That's great. Leslie, how did you go about getting buy-in in your organization?

LESLIE PLASKON: Well, it's interesting, because I think that at the end of the day, our success has really been client-driven. The clients have said, you need to do this. So what we do a lot at Paul Hastings is we have different general counsels come in on the same day for a panel, to the firm. And we broadcast it.

I'm part of big law, so it does impact how other people, other firms are approaching things. But this is what we were hearing from the clients-- you guys need to address the efficiencies, the costs. And it's going to win you business. And people said, hmm, it's going to win us business.

And so all of a sudden, the marketing folks said, look, you guys really need to do this. And it can't be a check-the-box do it, where we have task codes and everyone fills out 101. And they don't use the other task codes. And your bill just shows everyone-- all they did was discovery on litigation. That's not legal project management. And so we really heard from clients that we need to do it.

And what we did to get it done was really to develop the infrastructure. And big law firms have more room, maybe, for that. But I think any firm-- anybody can be doing this. You just have to have people and teams focused on it.

So we did hire someone who's our pricing director. And that person is in charge of a team that really helps us implement this. This is something that we take great pride in, because they're very involved in making sure that the whole firm-- all the partners have buy-in, that the associates have buy-in, and that the secretaries and the folks doing the time entries and the billing understand the process. So there's a lot of time spent just making sure that we're all understanding the process and that we're doing it.

So those are the key points. But I think the biggie, really, is that the clients are really demanding this. And if you're not going to do it, you're not going to be competitive. And so that's really I think, the bottom line.

SUSAN LAMBRETH: OK, great. Suzanne, you talked a little bit in your earlier remarks today about starting with a grassroots effort in your role. So maybe if you can expand a little more in terms of getting broader partner buy-in, but also, how have you aligned your incentives internally in the firm to incentivize efficiency and motivate people to be involved in this initiative?

SUZANNE WOOD: OK, so there's a couple of different pieces to that. And just playing off of what Leslie was talking about, if you are in an organization where you're trying to just get this started, and you know that your clients are talking about it, or at least you've heard today that your clients are talking about it, or if clients are, the first thing we did is I actually went and met with our business development team and our marketing team and said, OK, of all of the RFPs that are coming in, how many of those reference LPM? And it wasn't just looking for the LPM word, but also looking for efficiency and value and things like that.

So then I was able to say, OK, out of this percentage of-- number of RFPs that have come in over the last quarter, what is the percentage of those that are looking for LPM? And how many of those are existing clients? And how many of those are clients that we're wanting to attain, et cetera?

And that became a really nice PowerPoint slide, right? That was an easy thing that could go to our management committee, could be passed around to the partners saying, people are asking for it. I name-dropped in there, right? So a couple of clients in there, like-- such and such client's looking for it, in particular. And that really spoke to people. So that got us that initial interest.

The other piece, in terms of that initial expansion from my team of one to a team of two, was really focusing on-- we did anything that people brought to us. We saw ourselves as a service to the partners. So even if I might not personally have been pulling some information or compiling it, I'd say, don't worry. Leave it with me. I'll go coordinate and I'll liaise with people.

And so people who have more traditional project management backgrounds, a lot of the things that are taught at the PMP level are very checklist-based. You're going to have all of these records. You're going to have all of this sort of rigor. We took and stripped most of that away. And then to the extent that we needed to have any of those documents, we did the first draft of them.

And so I would do a first draft, send it to the partner-- here's what I think the draft report would look like, if this is along the lines of what you're looking for. Because lawyers love to edit documents. They love to have something to start from. And I know that, right? And so that's the way we approached it at that front end.

So as soon as you are seen as taking stuff off of the partner's plate, and providing a service that the clients want, then you get that initial buy-in. You've got people who are interested, because you're actually making their lives easier. Because a lot of these things we're talking about are things partners are already doing. Some of them are doing them really well. And some of them are really terrible at them. And so the best thing they can say is, I'm terrible at it. Can you help me? And then that actually helps us. So that was our initial starting point of that grassroots, getting people organized, getting aligned.

In terms of how we're getting that more broadly, I think that there's a couple of pieces. And we will see a huge increase this year. Because of our movement to a new accounting system, moving to SAP, there will be a lot more data available. And it's going to be available in dashboards and in real time.

And so partners who would have had to have requested reports coming from accounting historically, about their own metrics and clients, will be able to see that in real time. And so people will be very, very keen to make their metrics look better, both personally as well as on a client basis. And so they know that they can come to us. And we can actually help them make that better.

And so there are no rules about-- you have to use this department. We are here to make people look better. I'm not going to try and rat out such and such partner who's not profitable. But I might call them and say, you know what? I can help you. And let's see how we can work together to make your client happy. Or let's see how we can make your numbers look better. What are the things that we can drive? What do those metrics look like? So very much a partnership.

We are not sort of that scary department that is saying, you must do this. Your metrics look bad. And I think that's been, actually, the best way for us to approach it to get the buy-in. Hopefully that answered the question.

SUSAN LAMBRETH: Great. And Scott, how have you aligned your compensation system to incentivize lawyers being more efficient, versus what's historically been the volume revenues approach that the partners were measured by, your shareholders in your firm measured by, as well as the competing issue of associates are told they need to be efficient. Yet at the same time, they need to get their billable hours up. How has your firm addressed that?

SCOTT PEDIGO: Well, a couple of different ways. First, as far as how we got people to adopt LPM, it really came first by necessity, with lawyers who had very large portfolios of matters that really had to come up with a system to keep up with hundreds of matters at a time. And this was a system that could do it.

Beyond that it was, how do we make it easier for people to use this? And so how can we developed tools that it doesn't take a lot of time to use? One thing we did was, for example, developing template budgets. We made available working dollar credit, where you've actually got working dollar credit in your column for developing a template budget for a certain type of matter. And then we turned that into a template that could be used and rolled out to other matters like it. And so it provided an incentive for somebody to sit down and try to do it right, because in a way, they were getting paid for it.

Now, on compensation, several years ago, we sat down and developed a profitability metric that's assigned to each attorney that's basically-- it assigns them a cost per hour. And we can use that metric also to at least judge relative profitability of work. We don't have a formula that's tied to that metric to set compensation, but that metric is included in our management reports that all attorneys receive.

It is something that is discussed and looked at in the compensation meetings. And it can be a factor-- and is a factor, sometimes, to the bump-up or the bump-down, because all work is not the same. If a profitability metric is 8%, it's different than if the profitability metric is 35%. And so that is, of course, getting the attention of folks.

And then, while we certainly don't mandate that you use legal project management across the board, there are certain situations where we have a problem with a certain set of work that we need to improve where we have said, look, if this doesn't improve-- the profitability of it doesn't improve within the next year or hit this certain level, then there will be an adjustment of so much on compensation. That's rare. For the most part we have stayed away from using compensation to try to impose it, because while it can work when it's absolutely necessary, I think the better approach is really making it easy, getting your practice leaders and management leaders to use it, and have people see the benefits of it.

SUSAN LAMBRETH: Great. Leslie, how has your firm aligned incentives to encourage efficiency?

LESLIE PLASKON: A few different ways. We have a lot of metrics that-- the partners are tracked. And we see it. We can press a button and see what our metrics are today. So we can see how we're doing in terms of total dollars collected. But there's measurements on realization. And it's measured in a very sophisticated way-- billing rate realization and combined realization, so we get percentages. So if you are inefficient in terms of how you're running your matters, and you're running at 65%, 70% of what the billing rates are, it's not good when you have your composition meetings.

And so it's very, very much reviewed. There's an understanding that we do need to invest and write off time. And sometimes you will be incurring write-offs. But overall, your overall numbers will reflect how efficient you are. So that's a big part.

From the associate perspective, we don't have-- if you bill 2,500 hours, you're going to get paid a lot. You're measured on your efficiency. You're measured on how much we collect, if you will, per hour.

What we've done with the first-years and even-- I think we're now following it into the second-years, we have some clients who've said, we really don't want to pay for you guys to train the first-years. And so what we've done is we've built in flexibility to the system, where partners can put time that's what they call training time into a separate billing number. And it won't be charged to the client. And it also won't be charged to your realization rate. And so the first-years know that. The second-years know that for part of the time, they have their time reallocated. Which is great, because you can invest more time, which makes people more efficient as they go up the curve.

The third piece is that-- oh, and back to the associates. We give people superstar bonuses based on their evaluations. So people get graded on their competency, in terms of their legal excellence and their contribution to the team. So again, the bonuses are not driven by hours. We want the associates to be able to perform at the highest level. And so it's not tied to how much they bill.

SCOTT PEDIGO: Now, I should mention, we also use a training number for associates that scales down as they get experience. Say it's 100, 150 hours the first year, they can get billable hour credit for that. It's not charged to the client. And it graduates down after that.

I've found that, because of the increased emphasis on the partners' profitability and efficiency, that that's really effective in driving the associates' interest in that as well. They know that they can't waste a bunch of time just putting matter on a file, because we're not about just billing dollars. We're about performing great legal services for as little as we can.

And once you get the partner buy-in and they understand that, they're very effective at driving that with the associates. And we also have the associate bonuses tied to profitability, as opposed to just hours. We do have some small bonuses available based on hours. But the true bonus eligibility comes from profitability for associates.

SUSAN LAMBRETH: Yes, and as best we can tell from some of the data we've seen, about 25% of Am Law 100 firms now have added matter profitability as a partner comp criteria. And so then that changes the whole equation of-- I'm not just looking at getting my column for volume revenues, but actually, how profitable is the work that I have.

You had your hand raised for a question?

AUDIENCE: [INAUDIBLE] connected to how you measure all of this. And so it's a really broad question, is how are we measuring this? Now, obviously, profitability is one easy way to measure. But if you're just gearing up, how are you measuring it?

SUSAN LAMBRETH: So the question is, how are you measuring progress, adoption, implementation of LPM? Anybody want to take a quick shot at it? We've got about a minute.

SUZANNE WOOD: Sure, I'll take a quick--

SCOTT PEDIGO: OK.

SUZANNE WOOD: Oh, I'm sorry.

STEPHANIE HAMON: No, go ahead.

SUSAN LAMBRETH: Oh wait-- no, actually, we've got-- no, we have 15 minutes. I'm sorry. We've got 15 minutes. So we have time for more-- 15 minutes. And then we have time for more of our panel questions. So go ahead, yes?

SUZANNE WOOD: I think at the starting point, the first thing that I did was start looking at how many people have budgets in place, right? And so I started tracking metrics about how many budgets do we have. And then the next thing was, how many are actually looking at reports that are going out? And so how many reports do we have going out? And so I wasn't even looking at profitability, nothing intense like that, but who is using our services, right?

And so once you started getting those and started looking at different practice groups, different offices, different industries, and just generally, how are you getting out there? Because it isn't just about the profitability metrics or the numbers. The other piece is the satisfaction, right? So how do our clients actually-- are we getting positive feedback? And it wasn't even, at first, in a formalistic way, as part of a broader client satisfaction process. But are we starting to get some positive feedback, both from our internal and external clients?

And then we started looking at profitability. And the profitability piece, and all of the metrics, we look at a client level. So most of my people, rather than doing project or matter management, do what I call program management at the client level. And so they'll look at the profitability of the client overall, because within that client mix, you're going to have some that you win and some that you lose. And so if you look at each individual matter's profitability, you're really judging on too small of a set.

And so looking at overall, what is the leverage that you have on that portfolio as a whole, or the matters with it? Looking at your RFP wins and losses for that client, and pulling all of those metrics together, because that, I think, gives you a more holistic picture of your success. But start easy, in terms of who's using you? And what does that look like? And then you can build from there.

SUSAN LAMBRETH: And I think some of the firms that have been doing this a long time, there's this-- the measures they use at different stages of adoption. So at the early stage it's just, who's using it? And even, it can be things like how many people have gone to an internal training program that you've put on? How many people are using a tool? How many people are looking at a management report of some sort? That kind of thing.

Then it can progress to levels of-- are we actually under active management? I know some of the people on our LPM roundtable talked about how many matters or what percentage of the revenues of the firm are under more active management, where they've actually got a scope document or a plan and they're managing it throughout, and looking at that as another measure of adoption. The client satisfaction, obviously, being a very important one.

When this first started, because the struggle it launched on the law firm side is so much about reducing write-offs, the initial thinking was, well, if we're implementing this firm-wide we should start to see some reduction in write-offs. The challenge firms have found with that is that we've got downward pressures anyway on write-offs, as anyone-- we've seen the annual reports about that. So there's downward pressure already on write-offs.

And most firms-- even that have been implementing a long time, like some of our panelists, they're only getting it up and running, to full active management, on a small percentage of total matters, just because it takes a while. You don't just dive in on a matter that's been going on for four years and necessarily change the way it's running, unless there's a problem. And so where firms have found very, very powerful success stories has been around measuring on a particular client's matter-- satisfaction, but also measuring reduction of write-offs for a particular client matter or portfolio of matters. Like Suzanne was just describing too, where firms have seen huge improvement in terms of reduction of write-offs, but where they've been able to manage it around a particular client where they're using those approaches, versus looking at it firm-wide, where it's hard to isolate the impact of LPM compared to other things.

And another adoption measure has been how many pilots have gotten up and running, and communication of success stories internally. Again, that part's anecdotal. But it does tend to start a groundswell of enthusiasm to get more going throughout the firm. Anyone else want to share other--

STEPHANIE HAMON: Building on the client satisfaction and moving away from the write-offs point, what you have to understand when you're in private practice, in-house, the way we work is at the beginning of the year, you have to set a budget. And you're accountable for that budget, to your finance officer, CFO, COO, whatever. And if you don't have reliable information, what happens is throughout the course of the year, you have to get back to your CFO and your COO and say, got that slightly wrong. You might get a bit more.

But conversely, going back and saying, actually I got it wrong. I'm going to be able to give you a lot of savings, is not necessarily a good thing either, because that means you have used a lot of capital that might have been redeployed to make investments in other places. So the need for in-house to have an accurate budget is really critical. And in a way it's-- help us help you by being quite good.

So the way we've looked at how we've demonstrated efficiencies-- when we started applying LPM, you start with the basics, like just copying. And suddenly, that already had a big impact on the budget, and how predictable that was. And you know, our CFO and COO are very reasonable people. If you say, look, honestly, on this matter, I can only give you with certainty the visibility for the next quarter, and those are the three scenarios that might happen. So if we go that way, that might go up. We go that way, we know what it's going to be, or it can be less.

But being able to use LPM-- and I can't remember who said it earlier, but articulating what the lawyers are doing in a language that non-lawyers can understand is also one of the big gain within, because we've been able to get the business more comfortable about the fact that we're not drowning them in jargon. We cannot find commercial terms, what it is we're doing. So with not cost-saving, but just looking at scoping, because we realized, again, that-- we thought it was clear in our head that we asked for that. And the lawyers assumed we wanted this. So by just having the conversation, suddenly we agreed on that number, so a straight cost-saving.

And then there's all the efficiency, in the sense of more cost avoidance. Actually, if we hadn't done it, we would have had two law firms doing the same thing. Or we'd have had three associates doing what one associate could do. So while it might not impact our P&L, it's cost avoidance, the efficiency point of it.

But really, by doing it as a law firm, you're helping your clients look good internally, look credible. And they will never thank you enough for that, because I can tell you, as a GC, it's quite uncomfortable having to go back and say, we got this completely wrong, I need X more million, because you're not making a lot of friends when you do that.

SUSAN LAMBRETH: Anyone on the panel have some other measures to share, or does that pretty much cover it?

GREG LANTIER: I'll make the point, perhaps, that when we are talking about write-offs-- and from the law firm perspective, that is an important aspect of this. And it's a key selling point, when you're selling LPM to partners, that this is going to help us make more money. It is-- at least in our experience, my experience, it's very difficult to figure out how to come up with a credible and true or accurate numeric measurement of how much value you as a firm are deriving from your LPM initiative. And it's something that we've worked on. We're going to focus on it this year and try to figure out a way to do it. But it's very hard.

I will say that anecdotally, and on a case-by-case basis, we have very strong evidence that LPM is improving the bottom line. We've had one experience where we had a certain set of matters that a client required to be done on a fixed fee. We were doing very poorly on realization on those matters. But we wanted to keep doing them for the client. We instituted LPM with a partner who was very supportive of trying it out but had never used it before. And we saw about a 20% increase on realization on those matters, after a year of putting LPM in place on those matters.

So you have a few stories like that and it gets partners interested. But it is, at the end of the year, very difficult to say, well, we spent X number of dollars on our LPM initiative this year. But we made Y dollars more because of it. And so that is one challenge that I think a lot of organizations face internally, when we're trying to justify the spend on LPM.

SUSAN LAMBRETH: Yeah, we've got a session, actually, coming up at our next LPM roundtable on that topic. Stuart Dodds from Baker McKenzie, which has had one of the longest-running programs on LPM too, he's been measuring it at about a savings of 10 million pounds a year over their function. Now, it's a very large firm. And they have a very large function. And then I've got some other panelists that are going to speak on that topic on a P3 conference coming up.

So I think you'll start to see more in the press about that kind of ROI. Part of it has just been a function of, again, firms doing it long enough to be able to tell, what is the difference doing LPM? Because I think no one wants to put themselves out there and say it was a function of LPM when there could be a lot of other factors, and lose credibility for the whole program.

Other questions? You guys have another question? OK, well, I'd love to ask our panel, then-- we've got law firms and legal departments in the audience in widely-varying stages of implementing LPM, as we saw from our survey this morning. If you were in a legal organization that was just getting started, when many others have been doing this for a longer time, what would you focus on first? Tim, can you share some ideas with the audience?

TIMOTHY O'LEARY: Yeah. I would definitely focus on evaluating what legal project management means to you and your firm. What are your goals? There's a lot of different models out there that you can look at. A lot of firms approach these things in a lot of different ways. But I think it really is incumbent upon the firm to say, this is what we want our legal project management to look like. And you have to figure that out before you start an implementation program, or you're going to be wasting your time and spinning your wheels. And you don't want to do that.

So you really have to know what your goals are as a firm. You have to identify what you want to do in terms of legal project management. For us, Carla was instrumental on that, through LawVision, because as I spoke earlier, we didn't really know what legal project management should be for our firm. I think we've now identified it. We've started the process. And I'm confident it's going to be a success.

In fact, our managing partner-- who is a cheerleader of this, but it's not a top-down. It's also kind of a grassroots. We're adding it to our orientation for associates. And we're going to the associate committee meetings and we're talking about LPM. But he is in the next group that we're going to go forward with. He does trusts and estates. He heads the trust and estate program. And he wanted trusts and estates to be part of legal project management. So he's going to actually take time and he is going to go through the next pilot group with his trust and estate team.

And I thought that was a terrific example that says a lot to the other people in the firm, that this isn't just talk. We are a committed firm to this idea. And when you have the managing partner taking time out of his day to do it, it says a lot. But yeah, really, my first key is identify what you want it to be. And then do not look for technology until you know what it is.

SUSAN LAMBRETH: Anyone else want to share some ideas, how to get started first?

SCOTT PEDIGO: Well, this is just from my perspective, I think it's important-- I always come back to, you've got to make this easy for the lawyers, because they want to practice law. They don't want to be doing everything else. And so I think it's important to have dedicated support for practice management that can take care of the tasks associated with getting the system that you need, structuring it the way the lawyers want, giving them the tools to be able to handle their matters like they did before but just using this system, as opposed to the lawyers trying to figure out-- what system am I going to create? I think you have to have non-lawyer staff, frankly, to support the effort. Otherwise, it will be very difficult to get most lawyers to dedicate the time necessary for it.

SUSAN LAMBRETH: And part of, too, I think, what you're hearing is, there are firms here that have a lot of internal professionals to support this. But another part of it is changing the thinking of the lawyers generally, that LPM is not this admin thing that we go do, separate from practicing law. But that LPM can be a part of how we actually do our work.

I know I've seen sessions where very powerful, high-level partners in the firm sat down to do a stakeholder analysis and a scope of work document. And they were like, wow, this just adds to how we usually have our strategy meeting at the outset of a case. And if they're not thinking about it as this kind of ministerial-type thing they need to do, but they're seeing it as-- this changes how we think through the people involved in a matter, what are the risks, how we communicate with our client, what is the client really even looking for? If they think about it, really, as this way that they clarify things with the client and communicate it differently, all of a sudden, it's not something you want to hand off to someone as an admin task. But it's actually fundamental to how we engage with our clients and manage those relationships and ensure that they're satisfied.

SCOTT PEDIGO: Yeah, the number one thing is making sure that they understand this is not duplicative or extra work. It's just changing the way you're doing the things that you always should have done and maybe were doing. But it's just changing the way of doing it. And it's putting it in a platform that you can engage with and see in real time, and that is much easier to share with the broader team, share with the client. But you have to eliminate duplication, for sure.

SUSAN LAMBRETH: I understand we have a question on here. [INAUDIBLE] OK. OK, great. So we have a question from the web cast. Could you explain how LPM translates into increased profitability if you still use a billable-hour model, just by reducing write-offs? Or does it allow you to charge premiums or some other way to get paid for increased efficiency? Anyone want to tackle that?

GREG LANTIER: I can take--

SUSAN LAMBRETH: Sure.

GREG LANTIER: A first stab at it. So if your matter is just a straight billable-hour matter, then I think it primarily is through reduction in write-offs, time that you would have had to write off because you didn't feel comfortable with charging the client for it, or the client came back and said, I'm not comfortable paying for this time because it's excessive, you reduce.

But in my experience, where you really get special value out of LPM, in terms of reducing write-offs, is in the realm of alternative fee arrangements. And while we've seen the increase in demand for LPM, we've likewise seen a very strong increase in demand for alternative fee arrangements on our matters. And so there, I wouldn't say you can charge a premium. But you could imagine that if you have a client who has an hourly arrangement with you in which they receive some form of a percentage discount based on volume of work or something else, and then you take on a matter on an AFA basis, you could, if you're managing the matter well, achieve better realization on that matter than you would have achieved had you billed it in a straight hourly fashion, given the volume discount that that client was receiving.

STEPHANIE HAMON: And as far as we're concerned on the client side, the whole point of using LPM is to move completely away from the hourly rates. We don't want any hourly rates anymore. And what we see is law firms have really adopted LPM well. Our pricing seems differently. They're completely putting aside the hourly rate. What they're looking at is what I called earlier the deliverables, the output. And say, OK, what resources do I need to deliver that-- not number of hours, but how much equivalent FTE do I need? What's the cost of that for me? How much margin do I want to make on it? And here's a price. And that's a different way of pricing it. And then they see this profitability increasing.

And we have done another pilot on part of our litigation portfolio. And we outsourced it to two firms. And we've seen the difference. One was using LPM technique, the other not, and a more traditional set-up. And when we were getting the two firms together to renegotiate the annual retainer, one firm was-- the partner, the poor guy had no more hair. I think it's because he pulled his hair out from trying to make it happen. It's like, I'm getting killed by my management because we have such poor recovery rates and profitability on that matter.

And the partner from the other firm said, actually, we're quite happy about the profit we're making on that matter. So you're both getting the same portfolio, the same number of cases, have got the same profile. Do you see where there's a problem here? Because actually, one of the firm was more than happy, because they had applied legal project management methodology, they had resourced it, staffed it in the right way, they were making a profit out of it. And they were quite happy with it. And they were asking for more.

So when we said we actually want to include more matters in the portfolio, they were like-- yeah. By all means, bring it on. And the other firm was like, I don't see how I can sell it to my management, because they were still assessing it on an hourly-rate profitability model. So if you use LPM, you're going to be able to dispense with the hourly rate altogether.

SUSAN LAMBRETH: That's great.

SUZANNE WOOD: Yeah, even if you're still stuck in that hourly-rate model, it's about changing from that realization level of thinking to the profitability thinking. And so we have for each of our people a cost rate associated, an hourly cost rate for individuals. And so then you can look at, what's the right staffing model for this, right? So on an hourly rate basis, if I have my most highly-compensated partner doing this, it's going to tank my profitability even if I am using their standard hourly rates, at some occasions.

So you need to look at-- who are the right resources to be doing this task? Who are the people? And that is the level 2.0, in terms of when you're looking at your LPM. I can come up with a budget and I can track to that budget. But it actually may not be a profitable budget if I'm using the wrong people. And so you really have to then move into that model of looking at-- who are the right people? Who is the right-- you shouldn't have your partners doing your due diligence. You should have a more junior associate. And so looking at all of those things pulls that profitability. Even if you can't get away from the hourly-- which, I agree, we should all be away from the hourly-- but it's that transition point.

SUSAN LAMBRETH: OK, great. We're past time. But join me, please, in thanking our panel.

[APPLAUSE]

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