Legal Project Management Presentation for ACC Canada Vancouver

Legal Project Management Presentation for ACC Canada Vancouver, December 2 nd, 2010 Andrew Terrett, Director of Knowledge Management, BLG Carla Swansburg, Senior Counsel, Law Group, RBC

Is this your perception of Project Management? 2

Agenda Part 1: Some definitions Part 2: Why do lawyers need Project Management? Part 3: Key concepts Part 4: Application to legal services 3

Part 1 – Legal Project Management – key definitions 4

What is it really? Project Management is… • A mature discipline with: • A number of organisational “institutes” / associations - Project Management Institute (PMI) - Association for Project Management • Standards e. g. Project Management Body of Knowledge (PMBOK), PRINCE 2 (PRojects IN Controlled Environments) • Certifications e. g. PMP, CAPM, Pg. MP, Risk, Scheduling • Large growing global memberships – e. g. PMI is active in over 180 countries 5

A few definitions… • A project is “a temporary endeavor undertaken to create a unique product or service. ” (PMI) • Project Management is “the application of knowledge, skills, tools and techniques to project activities to meet project objectives” (PMI) • In reality…part art, part science • Art – people management, negotiation • Science – scope, time, cost, risk, communications, quality 6

Artistry? • PM is: • A set of tools, techniques and guidelines (a toolbox) • To be used as required • As appropriate – neither too much or too little (think “Goldilocks” – not too hot, not too cold…) • Not just for the “mega-projects” 7

Why has project management not captured the imagination of lawyers? • They don’t teach it at law school • It seems like lawyers don’t need project management • Lawyers have a framework – it’s called the Law! • It seems like there are just too many variables in legal practice so “let’s just get drafting and billing!” • Lawyers are not adept at applying best practices from the business world • Lawyers enjoy the autonomy that comes with subjectmatter expertise 8

Part 2 – Why do lawyers need Project Management? 9

Seven reasons… • Maintain sanity! • Budgetary certainty • Project Management is proven – it works! • Project Plans are great communication tools (90% of Project Management is COMMUNICATION). • Project Planning makes for better RFP responses for law firms and evaluations of RFP’s by in-house counsel • Project Plans make for better Knowledge Management • Project Plans are great learning tools for junior lawyers 10

Reason #1 - Maintain sanity! • Are you familiar with this scenario? A new project is announced. You experience the following: • • Excitement Disenchantment Confusion Panic! Disaster (Search for the guilty, punishment of the innocent) (Rewards for the non-participants…) • Good Project Management can reduce the likelihood of this scenario… 11

Reason #2 – Budgetary certainty • The economic imperative - “more for less” • Law departments are keen to negotiate alternative fee arrangements and firms are under pressure to oblige: • Association of Corporate Counsel (ACC) Value Challenge • AFA’s – Fixed fees, caps, blended rates (not discounts) • In-house counsel are getting more and more pressure to control and accurately predict costs • • • 12 They want value; and They want a reliable budget in advance; so Planning is becoming essential To deliver AFA and make a profit, law firms need PM Law Departments can use PM to negotiate and structure AFAs and manage internal projects

Reason #3 – Planning Precedes Performance • Project Management is proven • Research on IT software development projects shows better outcomes when PM discipline is adopted. • No organisation that adopts project management ever walks away from it. They simply evolve and mature in their usage • (But it’s not a magic bullet!) • The majority of project still fail in terms of on-time and on-budget delivery • But if you don’t use PM, you would have no idea what on-time and onbudget even means! 13

Reason #4 – Project Plans are a great communication tool and an opportunity for reflection • Project plans allow the planner to • Reflect • Identify and validate assumptions • Reduce risks • Project Management requires that a plan is communicated to all project “stakeholders” • The entire team • Clients/Business partners/internal clients for in-house lawyers • Entire external legal team • Students, law clerks/paralegals • For internal projects, other key people like corporate communications/PR, executives • In other words, anyone who has a stake in the project 14

Reason #5 – Project plans are great BD tools for law firms and evaluation tools for clients • Project plans allow law firms to respond more quickly to RFP’s and can distinguish firms • “Here’s how we would tackle your problem” • Demonstrates that the firm has thought this through • Demonstrates that they have done this type of work before • For in-house counsel, allows an easier comparison of responses and progress 15

Reason #6 – Project Plans are great KM tools • Knowledge Management is all about lawyers accessing the right information at the right time. • We collect and re-use precedents, research memos, clauses • Why not project plans? • Avoids “wheel re-invention” • Embeds knowledge for others to access • Allows for evolution of process improvement 16

Reason #7 – Project Plans are great learning tools • It is in the organisation’s interests that new lawyers get up to speed as quickly as possible on any given legal matter. • A project plan provides an overview of the entire process. It defines what is meant by “done” and describes the necessary steps. 17

Part 3 – Key Project Management Concepts 18

Some key PM concepts (as described in the PMI’s PMBOK) • Scope, Time, Cost, Risk, Quality, Communication • Bear in mind PMBOK is a “toolkit’ – pick the pieces that suit the circumstances • In legal services, “one size does not fit all…” • there’s complexity • there are unknowns associated with negotiation • litigation (strategic aspect) 19

The Four Project Stages (the PMBOK “Waterfall” approach) 20

Initiation • Ask / Listen in this stage • Should we do “this”? • What are the alternatives and their merits? • Typically, as lawyers, the approval to proceed has already been given e. g. • Acquire this target • Defend the client against this lawsuit • Output • In-house Counsel – Response to a situation • Private Practice – Engagement / Retainer Letter 21

Planning • Ask / Listen in this stage • • • What does “done” look like? What is “success” here? What do we need to do to get there? Who is best to do it? What will it cost? • Typical response before PM…. . • We don’t have time to plan, we need to start now…. . • (Equivalent of saying “We would rather do this quickly than efficiently”) • Output • Scope • Project Plan/Strategy • Fee/cost estimate 22

1 st key concept - Scope • Scope” is the work that must be performed • to deliver a product or service and • meet specified requirements. • In-Scope / Out-of-Scope • Think of this as two lists – A and B… • Scope Management • “Speak now or forever hold your peace” • Define the impact of scope changes before scope is approved. (Scope Change not scope creep…) • Distinguish must haves from nice to haves 23

Work Breakdown Structure (WBS) • Two approaches • Top down (Decomposition) • Bottom-up • Expert judgment • Find the people who have done it before… • Templates • “Progressive elaboration” • You don’t have a crystal ball so that you can look 5 years down the road… • Particularly important, for example, for litigation 24

A simple WBS example 25

Commercial Lending Agreement Example (High level) Commercial Lending Agreement Letter of Intent or Memorandum of Understanding Due Diligence Review of title? 26 Negotiation and Settlement of Documents Loan Agreement Guarantees Closing

Commercial Litigation Pleadings 27 Discovery/ Depositions Motions Pre-trial preparation Trial Appeal Mediation/ Settlement

2 nd key concept – time management • Logic/network diagrams • Bar charts, milestones, “gates” • Critical Path 28

3 rd key concept – Cost Planning • To create a budget (from nothing) • Step 1 - Work Breakdown Structure (Task list) • Step 2 - Assigning resources (each of which have a cost) • Step 3 - Consider contingencies …gives us an estimate • The importance of historical data • Don’t start with a blank sheet of paper unless you have to! • Time and billing systems – vast quantities of historical data but difficult to mine without other tools… • “Ball-parking” budgets is massively unreliable • Don’t do it! 29

Execution/Monitor and control • Deliver the work product • Ask / Listen in this stage • • Are we on time? Are we on budget? Have we met the deliverables? Have the objectives changed? • Typical response before PM • Focus on the tasks and get them done • Output • Communication • Revised plan • Deliverables 30 Execution Monitor and Control

4 th key concept – Cost management • Step 1 – Determine at what level of detail you will manage the budget • Step 2 - For law firms: ensure timekeepers regularly enter their time • Step 3 – Compare estimate, cost to date and remaining work • You don’t need sophisticated tools to do this…. • Project plan allows in-house counsel to track firms’ progress 31

Closing • Ask / Listen in this stage • • What did we do well? What can be done better next time? Did I receive value for the costs? (client) Did we deliver value for the costs (law firm) • Typical response before PM • Get the bill paid (Private Practice) • Determine if any deliverables will make good precedents (KM opportunity) • Output • Lessons Learned • Process Assets 32

5 th Key PM concept - Risk • Two elements: • Probability (is it going to happen? ) and • Severity (how bad would that be? ) • Risk Management process: • Identify, Analyse, Respond • Risk rating = probability * severity • Allows counsel to focus on true risks and spend less time/effort on minimal risks • Risk Response Planning: • Mitigate, Avoid, Transfer, Accept • Risks can be hidden, missing or unclear because requirements are unclear…What are the risk triggers? 33

6 th Key PM concept – Communication • Communication Planning – who needs to know what, when, how? • Project Sponsor – Who is the overall decision maker? • Responsibility Planning: • • 34 Who is responsible? Who is accountable? Who needs to be consulted? Who needs to be informed?

7 th Key PM concept - Quality • Quality is defined as “The degree to which a set of inherent characteristics fulfils requirements” • What is quality in the context of legal services? 35

The Project Management “Iron Triangle” or “Triple Constraint” Time Cost 36 Risk & Quality Scope

Part 4 – Application of PM principles to legal practice 37

Objection #1 - “Yes, but issues come up…” • Issues come up in every project that require changes to scope, schedule, etc. • Issues simply highlight the importance of • Agreeing in advance what “done” looks like; and • Agreeing to a process for approving changes • “Scope Change Management” • New tasks, new dollars, amended timeline • “The Iron Triangle”… 38

Objection #2 – “We cannot plan from beginning to end” (say the litigators in unison…) • So don’t try! • Litigation is not so much a single project as a series • Clearly you cannot schedule from pleadings to trial – litigation is too fluid. The planning horizon is much shorter • “Progressive elaboration”!!! • Plan to the next milestone or deliverable • Be prepared to throw away the plan! 39

Objection #3 – “We’re already doing a lot of this…” • You may well be… • But Legal Project Management: • Makes explicit what was previously implicit • Adds structure to what you already do (provides a template for better organization and planning of legal matters) • Introduces a common vocabulary 40

Objection #4 – “Everything I do is unique…every deal is different” • (aka “fear of Susskind”…) • Response - you actually need more PM! • Project Management is about structure • not necessarily about process improvement, commoditisation, etc. • (“Yeah but…”) 41

Objection #5 – “PM cannot be done in the context of a law firm/client relationship” • Roles and responsibilities • What PM skills are available – • Do they have dedicated PM’s or “dabblers”? • Do we have an agreed PM methodology? • Who’s in charge? • Inhouse • General Counsel • Assistant General Counsel • Senior Counsel • External Counsel • Partner? • Senior associate? • Paralegal (project co-ordinator) 42

Objection #6 – “There’s no suitable PM software for lawyers…” • There are many software applications that can assist with project management planning and execution • Some options for your consideration… • • MS Project 2010 (Server), Primavera, Liquid Planner, Onit, Swiftlight Budgeting software – e. g. Budget Manager, Engage, Feesability e. Billing Software e. g. Serengeti Matter Management – Needles, Prolaw, Amicus Attorney • (Note: The Apollo moon landings didn’t have MS Project…) • Use software as a tool. It should not replace critical thinking 43

“One size does not fit all…” Transactions Litigation Compliance Can you scope out this project from beginning to end? Yes (generally) Yes - tasks to the next milestone in detail. You can also plan end-toend at a high level with a lower degree of certainty Yes, but more process than project. Deliverables are defined already Can you estimate time and costs required based on the tasks? Yes (generally) Yes – reliable estimates to the next milestone and less accurate high level time and cost estimates for future phases Yes Can you define communication and responsibility requirements? Yes Yes Yes Can you identify risk and associated mitigation 44 strategies?

“OK, I get it. Where do I start”… • Start small • Pick an area (start with the simpler areas – not IPO, not Class Actions…) • Bring in a consultant for basic Legal PM training like this • Create a Work Breakdown Structure and try to execute against it • (It won’t be fun the first time…) • Learn quickly and “fail forward” • Apply Lessons Learned, “rinse and repeat”… • Then start talking to external counsel • Start small, pick another area • Create a Work Breakdown Structure, try to execute against it… • Figure out what tools and techniques work best for you. 45

Discussion 46

Example Scope Statement template 47

Project Communications Plan 48

Example Responsibility Matrix 49

Risk Assessment Matrix 50

Contact Details Andrew Terrett, PMP Director of Knowledge Management Borden Ladner Gervais LLP Toronto (416) 367 6497 aterrett@blg. com 51 Carla Swansburg Senior Counsel Royal Bank of Canada Toronto (416) 974 -6712 Carla. swansburg@rbc. com