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Eugenia Navarro (ESADE): “Law firm management must go from reactive to predictive"
The legal sector needs to understand the importance of working on a project basis in order to better adapt to companies’ needs. In-house corporate lawyers are increasingly outsourcing certain portions of judicial processes to small law firms that operate effectively at low cost, and inform their clients about the risks associated with legal actions similar to the case at hand. In order for corporate legal departments to be able to efficiently control the performance of contracted services, large companies have started to introduce legal project management (LPM). For small “boutique” law firms, familiarity with this technique can provide access to the new market for process segments, while at the same time reducing costs and, accordingly, providing a competitive advantage in the market. Eugenia Navarro, Lecturer of Strategy and Legal Marketing at ESADE Law School, and Jose Luís Pérez, Partner at Pérez Partners, participated in a recent conference entitled “How can I work with Legal Project Management?”, organised by ESADE Law School. The aim of the session was to analyse direct costs in legal services organised with LPM.
“Corporate clients want predictability in results, and also in prices, as in alternative fee arrangements (AFAs), a pricing method that provides an alternative to hourly billing. There is now an emerging market in which more players are competing for a smaller budget,” explained Ms. Navarro. The present-day legal profession, she argued, is characterised by “law firm management going from reactive to predictive”. She added: “Technical capacity is a given. Differentiation lies in providing the client with a roadmap that makes it possible to predict the expected results and times, as well as substantially improved communication.” Finally, Ms. Navarro noted: “LPM is a tool that makes it possible to transform the service in that direction, within corporate projects.”
Jose Luís Pérez, Partner at Pérez Partners, commented: “In a legal service, it’s worthwhile to make PERT diagrams – that is, using the Programme Evaluation and Review Technique – or risk matrices. Dedicating more time to activities that are considered non-billable hours adds value to the service.” Some of this time, Mr. Pérez explained, is invested in “taking time to clearly define what the client wants when they outsource work to an outside firm, in order to adequately quantify the time required and the relevance of each activity, identify the ‘bottlenecks’ in the process, consider the risks of the project, and generate a systematic communication plan for the client”. He added: “By properly defining these parameters, you’ve already reduced the number of hours dedicated to execution. You reduce billable hours by eliminating mechanical tasks.” Finally, Mr. Pérez noted, “A lawyer’s hours cannot be kept in stock. Any hours you haven’t been sold today can not be sold tomorrow”
LPM is a work methodology that makes it possible to effectively manage the knowledge that an organisation already has. Therefore, it is very important to define useful parameters during the closing phase of a project through orderly feedback. “LPM can be used for large projects as well as for the management of small law firms,” concluded Mr. Pérez. “This can open up an opportunity to access a share of the market for process segments outsourced by large corporations. LPM is becoming the rule for outsourcing because in-house lawyers use it in their selection process, as it allows them to gain more control over the expected results.”
