New Law Firm Business Models Incorporate Project Management

project managementI went to a meetup that showed me all lawyers and law firms are not averse to change. In fact, there is a movement to incorporate project management principles into the practice of law. It may transform the traditional law firm model into a law firm business model.  First, what is the traditional model and why its not working?

The “Cravath” Practice Management Model

The evolution of today’s law firms can be traced back to Cravath Swaine & Moore, LLP founded in New York in 1819. Partly due to inconsistent standards of legal education back then, the Cravath partners developed a system of hiring, training and promoting lawyers that has been emulated by law firms of all sizes.

The model is familiar. The bottom of a pyramid formed by many junior employee lawyers is drawn from the top students at the top schools. These associates compete against each other for advancement.  Their ranks are winnowed down through the years. Only a few make it to the partnership level at the apex of the pyramid.  Meanwhile, from day one, the associates learn firm culture and how to provide high quality services to well-heeled clients billed in units of time.  The more time it takes to handle a matter, the better–associates are rewarded for technical perfection and thoroughness.  Lawyers are assisted by paralegals and support staff. The partners own the law firm, make the decisions, and retain the profits at the end of the year.

Practice Management vs. Project Management

The Cravath model worked when lawyers had a monopoly on information and could operate in a subject matter silo.  They set up their practice groups based on technical expertise in substantive areas.  (Not necessarily the service needs of clients.)

Globalization and technology have changed that.  Everyone with access to the internet can access legal information.  And that legal information—and more—is being delivered to consumers by people who may not have gone to law school.  Clients are demanding more efficiencies and more value from lawyers. In order to gain efficiencies and budgetary predictability, corporate clients are outsourcing and insourcing legal work.

So what does that mean for the traditional law firm model?  Will fewer lawyers be hired?  How will the partners’ profits be leveraged? I don’t have clear answers to those questions, but do think there is a better question. Are there ways to better serve our clients and potential clients?  In today’s world, regulations abound, jurisdictions overlap, and many people have little understanding that the law may provide them with help for their business or personal affairs.

Lawyers should not think of their practice in terms of a subject matter they studied in law school. Rather, they should think of their work in terms of demystifying process to help clients.  How about thinking of the work we do as applying our knowledge of substantive law and procedural process in project management to help clients?

Legal Innovations Include Project Management

So, back to the meetup last week.  Unlike the typical unstructured format of a meetup, John Duggan and Kim Davis of Seyfarth Shaw facilitated a presentation followed by a hands-on interactive exercise.  Seyfarth Shaw, a Chicago-based firm with offices around the world, for over fifteen years has been applying the Lean Six Sigma process improvement approach to providing legal services and managing client relationships. The firm has been recognized as innovative leader in utilizing project management principles and technology solutions in the practice of law.

John explained the Seyfarth Lean approach.  In a nutshell, project managers distill legal matters down to a process that can be managed more efficiently, with greater quality and at a lower cost.  The project management team works with the attorneys (and sometimes clients) to “process map” which means identify each step of a matter and then follow it through to see how long the step takes and where there are redundancies.

Acknowledging that they had to break down attorneys’ resistance to thinking about their work as more art than science, John and Kim shared experiences where different lawyers in the same organization doing the same types of legal matters often described their approaches as involving completely different processes.  Moreover, there were unhelpful complexities in the processes.

The meetup participants broke into teams of four or five people and got a “secular” taste of process mapping in planning a vacation.  Using large post-it notes, we broke down every step of going on a vacation from choosing a location to booking transportation and lodging to checking into the hotel.  There were a lot of steps, and they had to be done in the right order. There was a lot of reordering the post-it notes on the wall. It was a great experiential learning exercise.

John and Kim didn’t share where they and the project management team fit on the pyramid/triangle model—or if it even exists at Seyfarth.  What was clear from their presentation is that they are incredibly valuable professionals.  For a discussion of another firm committed to process mapping, watch the talk of Tom Lysaught at the Future is Now conference.

Modeling Project Management Talent

Whatever the business model lawyers develop going forward, it is clear that experts in other fields need to be included.  There is too much information out there to think that superior legal analyses and/or rainmaking abilities that may have qualified a partner of yesteryear to sit at the apex of a firm qualifies him to maintain that position today.

In February 2016, Deloitte published a report in reference to a study of UK lawyers.  Deloitte predicts in the very near future:

  • fewer traditional lawyers in law firms
  • A new mix of skills among the elite lawyers
  • Greater flexibility and mobility within the industry
  • A reformed workforce structure and alternative progression routes
  • A greater willingness to source people from other industries with non-traditional skills and training.

Practice Management diagramHere is what that new law firm could look like:

Assuming lawyers maintain ownership of the firms at the top of the pyramid, there will be fewer of them. The traditional permanent staff block will consist primarily of fee-earning lawyers who firms could attract, retain and develop in the conventional way. Not all of them will progress to the partners and leaders pool—some may move into the transient area.

And here’s the most interesting piece.  The non-traditional and transient employees include project managers, sales executives, dealmakers, data and tech experts and lawyers. Here human resources will come in and move out of the organization based on the need for additional or fewer resources. Lawyers will need to have skills broader than technical competence and be able to work in a team with other professionals.

Project Management is Flexible But Not Transient

I don’t agree with the Deloitte report’s conclusion that project managers should be considered a transient talent pool. Kim Davis has been at Seyfarth for several decades and leads a team of project managers.  The importance of project management will only sharpen as laws and regulations mount.  We lawyers who have a tendency to divide the world into lawyers and “non-lawyers,” should accept that other professionals, many of whom did not go to law school, can help us better deliver legal services to more people.

This tagline on the SeyfarthLean consulting website really caught my eye: “We don’t practice law. We improve the practice of law.” Lawyers should welcome it.

 

 

 

 

Share this:

Jayne Reardon
As a prior trial lawyer, Jayne leads lawyers to embrace the transformative possibilities of future law practice. As a prior disciplinary counsel, Jayne is passionate about promoting the core values of the legal profession. She is a graduate of the University of Michigan Law School and the University of Notre Dame. Jayne lives in Park Ridge, Illinois with her husband and those of her four children who are not otherwise living in college towns and beyond.
Jayne Reardon

One thought on “New Law Firm Business Models Incorporate Project Management

Leave a Reply

Your email address will not be published. Required fields are marked *