Legal operations is not often considered in parallel with ethics. But, ethics and the professional standards by which lawyers must operate in any jurisdiction, are a perfect blueprint for the scoping of a legal operations, and more specifically, a legal project management strategy.

As legal operations professionals we are behind the curtain when it comes to the functioning of a global legal practice. There is, of course, an assumption that BigLaw knows better and therefore does better in all operational respects. However, we only have to look at the DEI data, legal press and sometimes even the tabloid press to know and understand that law firms are filled with human beings – the very same kind who populate all other industries and sectors and can be prone to temptation, greed and self preservation.

In legal operations we see the books and records of account, the firm’s time keeping practices and the multiple heads in the room with their clocks ticking. We know the talent in the room and we have a pretty good understanding of the relative contributions. Those in legal operations should have a detailed grasp of processes outside the room. We therefore understand the value (or not) of the handful of lawyers in attendance with their meters running.

The operations team sees the poor time narratives – that no-one can understand and that invariably get rejected at billing stage. We see the wholesale review and remediation of time entries by people who don’t understand the work being done. Yet those same people do sufficient ‘fixing’ to get the bill paid.

In legal operations we see the firms’ data on diversity. We see the quality of the data and we see the interpretation of the data. Typically, a legal operations function will run non-bias training and programmes and will respond to RfP questions on diversity and inclusion. In operations we will know how it is…as well as how it should be.

In legal operations, you will likely witness practices that run close to the line. Law is a competitive environment but success needs to sit on the right side of both the legal and moral line.

An issue riddled with ethical questions

Timesheet remediation is a very common practice in law firms. Nowhere in legal work are ethics and legal operations more intertwined. To get a bill through an e-billing system, the narrative and time code must be correct. The criteria for charging (maximum heads in the room for example) need to be met.

If the bill is rejected, who is going to fix it and how? Can a junior analyst or operations graduate with no legal experience, be tasked with amending the narrative? How will they know what it should say in order to reflect the actual activity, rather than an activity that will satisfy the e-billing algorithm? If the time entry goes back to the lawyer who recorded the time should they be time recording for fixing their own mistakes? Are they incentivised to fix the time entry if they are subject to billable hours targets and can’t record the time? If they aren’t incentivised and don’t fix the entry, will the firm just end up writing off the time?

If an operations team has to manipulate the time recording data to capture data requested by a client, should the cost of doing that go back to the client? Or is the client right to assume that the law firm is collecting sufficient data points to provide the information required?

These are all important questions, and for many firms, the starting point for their legal project management strategy. But legal project management is the opposite of timesheet remediation. Timesheet remediation on any scale should be completely unnecessary if the matter is being managed effectively. In this post we look at the relationship between ethics in legal service delivery and an effective legal project management strategy.

The relationship between legal operations and ethics

The relationship between legal project management and ethics is an important one. The Solicitors Regulation Authority, the American Bar Association, the Council of Bars and Law Societies of Europe – each has a code of conduct with which its admitted and practicing lawyers must comply. Those rules of professional conduct align with a number of the key principles of legal project management.

In England and Wales, solicitors are required to demonstrate competence in core project management principles. A practicing solicitor must:

“Initiate, plan, prioritise and manage work activities and projects to ensure that they are completed efficiently, on time and to an appropriate standard, both in relation to their own work and work that they lead or supervise”

Section D, Solicitor Competence Statement

Whilst the Statement of Solicitor Competence doesn’t expressly reference legal project management skills, the LPM skill set is very evident in the language of Section D. Solicitors in firms with dedicated legal project management functions, and those without, need to understand what legal project management is. They must also understand the ethical considerations that should be applied in delivering legal services.

Lawyers must be aware that whether or not the firm for which they work, offers them the support of a legal project management specialist, they each carry a professional responsibility to ensure the appropriate oversight and management of their matters.

The Project Management Institute implemented a Code of Ethics and Professional Responsibility that applies to all of its members but represents a good base line for legal project managers. The latter however, must also have knowledge of the relevant code of professional conduct that applies to lawyers in the jurisdiction in which the legal services being managed, are delivered. These are standards set for our lawyers and should be the standards against which, legal project managers deliver projects.

Where confidence in the role of the legal project manager is often lacking, demonstrating a clear understanding of the rules of professional conduct that apply in the jurisdiction of enrolment, can go a long way to building credibility in both the individual and the role. Any LPM candidate not able to connect topics such as scope of work, pricing, communication and quality of work to the code applicable to the lawyers they support, should raise a red flag with recruiters and law firm partners alike.

Let’s look at some examples

In the UK, the Solicitor Competence Statement (SCS), introduced by the Solicitors Regulation Authority (SRA), outlines the skills and competencies necessary for solicitors to effectively perform their roles. The SRA also maintains the Code of Conduct for Solicitors. Both the competencies contained in the SCS and the behaviours outlined in the Code of Conduct can be mapped to the LPM competencies of scoping, pricing, communication and quality.

A similar mapping exercise can be made to the American Bar Association’s Model Rules of Professional Conduct.

Scope

Scoping is a key aspect of the legal project managers role. The scope of a legal matter is the work that is required in order to reach the client’s expectations and outcomes. To be able to do this adequately, it is essential to test and discuss your understanding of those expectations, with the client. It is not only what your firm does that is important, but also the cost of each work stream and the time required to complete it.

Law firms have historically relied on their standard form of engagement letter to agree a scope of work and the scope is often contained in just a short paragraph of that letter. That may not be sufficient to clarify the full scope of instructions in a way in which both lawyer and client are, and remain aligned.

Whilst client and lawyer may often believe they both understand the nature and detail of a mandate, this often turns out to be misconceived when the invoice is raised. The responsibility for aligning expectations of the engagement lie entirely with the law firm, whose professional responsibility it is to ensure that there is no ambiguity in connection with the instructions. Your legal project management team should be helping to clarify those instructions and the clients objectives by preparing a sufficiently detailed scoping document, comprehensive scope of work or scope agreement. They should also establish a point of contact within the client organisation authorised to provide instructions throughout the mandate and continually test those instructions against the established scope and objectives. To do this competently, your LPM must understand the attributes, needs and circumstances of the client.

ABA Model Rules 1.2(a) and 1.0(e) support the preparation of a detailed scoping document and at very least, require something more substantive than a line or paragraph in the engagement letter:

Rule 1.2(a) “Subject to paragraphs (c) and (d), a lawyer shall abide by a client’s decisions concerning the objectives of representation and, as required by Rule 1.4, shall consult with the client as to the means by which they are to be pursued. A lawyer may take such action on behalf of the client as is impliedly authorized to carry out the representation. A lawyer shall abide by a client’s decision whether to settle a matter.”

Rule 1.0(e) “Informed consent” denotes the agreement by a person to a proposed course of conduct after the lawyer has communicated adequate information and explanation about the material risks of and reasonably available alternatives to the proposed course of conduct.”

Notwithstanding the codes of conduct in place in both the UK and US, firms still regularly scope a complex piece of work across a handful, or less, of workstreams. For example, the retainer is established based on something like:

Preparation/matter set up	[£][$]25,000
Due diligence	[£][$]$75,000
Transaction documents	[£][$]50,000
Completion	[£][$]20,000

Work begins, notwithstanding that it may be unclear whether the [£][$]170,000 fee is indicative, or a quote. The client will rely on it being the latter and will believe that they have certainty. The law firm will commence work relying on its ability to revisit the indicative price, once the scope and objectives have been established to their satisfaction. None of the competencies or codes, whether PM or legal, have been fully complied with. The words ‘quote’ and ‘proposal’ are used interchangeably without attention to the meanings of and differences between those words.

A proper scope of work can substantially improve recovery for a law firm by providing a realistic documented roadmap to completion that can’t later be challenged for uncertainty. Similarly, out of scope work can be clearly identified and also scoped and budgeted in order to ensure the firm isn’t undertaking work for which it will not get paid.

Where recovery improves, the role of the legal project manager becomes more credible and carries economic value for the firm. Testing clients for materiality levels, need for tax advice, competition analysis, access to data, and appetite for warranties and indemnities, can both impact the cost of delivery but also inform the legal team in a way that allows them to drive efficiency. A more efficiently delivered legal matter will provide a bottom line boost.

Pricing/budget

Legal project management, through the scoping exercise, encourages the elaboration of tasks included within the service delivery. This allows for time estimations and the identification of resources before the work begins.

Whilst customary fees are relevant and can be helpful in formulating a price, LPM discourages the ‘finger in the wind’ approach to pricing as well as the use of general estimates derived from prior experience. Neither approach calls for the consideration of the complexity of the matter being priced, relevant timescales or limits, the skills of the lawyer, or the type of fee arrangement (e.g. contingent fees). Each of these things can negatively impact the ability to recover time on the clock if they aren’t properly accounted for in the pricing model.

If a fee proposal rather than a fee quote has been provided, the legal project manager should begin to track and report the accruals to the client (in the interests of properly accounting to clients) from the start of the work. The legal project manager must also however, track and manage the delivery team to ensure timescales are met and resource requirements are sufficient to ensure that the quality of the work is adequate.

ABA Model Rule 1.5 aligns and supports the principle of proper accounting but also imports a requirement for the delivery of a detailed budget at the beginning of an instruction:

“(a) A lawyer shall not make an agreement for, charge, or collect an unreasonable fee or an unreasonable amount for expenses. The factors to be considered in determining the reasonableness of a fee include the following:

(1) the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly;

(2) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer;

(3) the fee customarily charged in the locality for similar legal services;

(4) the amount involved and the results obtained;

(5) the time limitations imposed by the client or by the circumstances;

(6) the nature and length of the professional relationship with the client;

(7) the experience, reputation, and ability of the lawyer or lawyers performing the services; and

(8) whether the fee is fixed or contingent.

(b) The scope of the representation and the basis or rate of the fee and expenses for which the client will be responsible shall be communicated to the client, preferably in writing, before or within a reasonable time after commencing the representation, except when the lawyer will charge a regularly represented client on the same basis or rate. Any changes in the basis or rate of the fee or expenses shall also be communicated to the client.

(c) A fee may be contingent on the outcome of the matter for which the service is rendered, except in a matter in which a contingent fee is prohibited by paragraph (d) or other law. A contingent fee agreement shall be in writing signed by the client and shall state the method by which the fee is to be determined, including the percentage or percentages that shall accrue to the lawyer in the event of settlement, trial or appeal; litigation and other expenses to be deducted from the recovery; and whether such expenses are to be deducted before or after the contingent fee is calculated. The agreement must clearly notify the client of any expenses for which the client will be liable whether or not the client is the prevailing party. Upon conclusion of a contingent fee matter, the lawyer shall provide the client with a written statement stating the outcome of the matter and, if there is a recovery, showing the remittance to the client and the method of its determination.”

Communication

One of the most frequently levied criticisms of law firms by their clients is a lack of information or insufficient communication, particularly in connection with the accrual of the billable hour. Incomplete information can also be an issue with law firms telling clients only what they think the client wants to hear and not what they need to hear in order to make informed decisions about matter strategy.

Legal matters have grown in size over the last couple of decades. The teams deployed by law firms to handle such large and complex matters have also grown and increasingly large and complex client stakeholder groups are often also evident.

The SCS and SRA Code of Conduct deal with the basics.

It is the responsibility of the legal project manager to formulate a communications plan and share it with the delivery team to ensure that all lawyers in the delivery team are able to comply with their code obligations.

The ABA Model Rules set similar expectations for communication. Model Rule 1.4 requires that:

“(a) A lawyer shall:

(1) promptly inform the client of any decision or circumstance with respect to which the client’s informed consent, as defined in Rule 1.0(e), is required by these Rules;

(2) reasonably consult with the client about the means by which the client’s objectives are to be accomplished;

(3) keep the client reasonably informed about the status of the matter;

(4) promptly comply with reasonable requests for information; and

(5) consult with the client about any relevant limitation on the lawyer’s conduct when the lawyer knows that the client expects assistance not permitted by the Rules of Professional Conduct or other law.

(b) A lawyer shall explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation.”

The ABA Model Rules go further and consider confidentiality (in Model Rule 1.6) and internal communications (in Model Rules 5.1 and 5.3). This anticipates an adequate communications plan which should also take into account the parties involved and the information to which they should have access. With the adoption of collaboration software and virtual deal spaces, an appropriate communication plan that documents more than a working parties list, is essential to ensure that confidentiality is maintained but also that the right people have the right information at the right time to enable the matter to be delivered efficiently, the client to be kept informed and the relevant codes of conduct complied with.

A comprehensive communication plan also plays into budgeting and scoping. If regular update meetings are necessary, these will need to be budgeted for to ensure the firm is covered for costs.

Quality

Note the references to quality above. Whilst the principles of legal project management do not include any separate process of quality control, legal project management can direct quality outcomes where lawyers and legal project managers apply the relevant code with a view to competent delivery of services. Black box thinking, checklists and documented budgets all drive process improvements across service delivery through a continuous lookback, review and improve approach.

Lesson summary

By making the connection between the discipline of legal project management and the ethical and other standards expected of lawyers, the benefit for your firm can be twofold.

A legal project manager who is also a qualified solicitor or lawyer will be subject to the same standards as all lawyers within the organisation. Applying the principles of legal project management as a means of meeting those practice standards will encourage all lawyers to adopt LPM principles across the work that they do, as well as the work that is supported by a dedicated LPM. This should, and in all likelihood will, have a positive impact on the quality of work that your lawyers deliver. Furthermore, where the adoption of legal project management principles has been met with resistance across your organisation, the application of the discipline in order to meet the standards, lends a certain credibility that may well have been overlooked by those more resistant to change and can be a positive boost to your legal operations strategy.

This article however, describes aspects of LPM that require knowledge and experience that can only be derived from consistently delivering complex matters and developing an understanding of the resource group, the skills of the lawyers, the risks that the client may face and the ability to comprehensively communicate at a senior level, both internally and with senior stakeholders. It is neither a junior nor admin role and treating it as such will result in frustrated lawyers, clients and legal operations staff.

There is a strong argument in the world of legal, for project managers to be drawn from a cohort of practicing attorneys and solicitors. They will come to the role with credibility and the ‘grey hair’ to enable them to direct a transaction or matter. If the matter is budgeted and managed, and transparent lines of communication put in place for the life of the matter, the client experience will improve. Managing resources against a detailed scope with built-in contingencies will improve recovery. Applying an innovative mindset to the way a matter is delivered (including how matters are priced and how time is recorded) will improve the lawyers’ experience.

A successful legal operations team should include a very lean but experienced LPM team. Administrators, fixing timesheets and manipulating billing data to close the gap to real time financial reporting, should be very few or eliminated altogether. Your LPM strategy should be mapped against the code of conduct governing the lawyers delivering the work. The work undertaken by your LPMs should be delivered consistently, across all matters, proportionately to the instruction.

Include project management in your scope of work. Anything that doesn’t fit into the drafting, advising, and negotiating line items of the time sheet, is in all likelihood, project management. Essential meetings to deliver materiality, client expectations, approaches to warranties or indemnities, expectations on timing, or to share regulatory deadlines, are all legal project management. Information should be shared once, but memorialised and retained somewhere obvious and accessible.

Once legal project management is defined and scoped in this way, it is much easier to show that where the work is undertaken by a qualified lawyer, even if they are a dedicated legal project manager, it is work that can, and always has been charged at strategic lawyer rates.

The legal project manager’s framework for success should follow the relevant code of conduct and provide a high standard of:

• scoping
• communication
• pricing, budgeting and financial reporting
• quality