The 7 Deadly Law Firm Write-Off Sins

In my last post of 2010, I described an action-packed three months in the trenches delivering Legal Project Management programs to various firms, capped by 17 straight one-day stands in December.  I said we were learning a lot about law firm best practices, worst practices and non-existent practices, and promised to share some lessons learned in a series of blog posts in 2011.  Here is the first, The Seven Deadly Law Firm Write-Off Sins.

 Law firms of all sizes write off or write down an incredible amount of time – associate time, partner time, practice group time, time logged by colleagues in other practice groups.  You want to know why?

 1.  Over-optimistic time and budget estimates: in an effort to please the client, the partner managing the matter negotiates unrealistic performance and costs standards. In other cases, the lawyer (or project manager) lacks the expertise to understand all phases of the matter and therefore improperly sets cost expectations with client (e.g., when a corporate relationship partner assumes oversight of a litigation matter).  The budget gets busted because there isn’t a prayer it can be met.

 2.  There was no agreement or definite budget negotiated with the client, and the law firm has operated and billed as usual – that is, doing all they feel is necessary and can justifiably bill for.  Now, the client gets the bill, says the amount billed exceeds expectations or acceptable budget, and demands a write-down.

 3.  Changes to the agreed-upon scope of work were neither discussed with the client at the outset nor communicated as budgets were exceeded — and now the client refuses to pay for the “surprise” overruns.

 4.  Associates spend too much time performing legal work, either because they’re being pressed to maximize billable hours or because they are not given clear instructions or clear time restrictions.

 5.  Partners in other practices who are called in to provide specialized support bill more time than the budget can handle or delay the project by missing task deadlines.

 6.  When the original lawyers or paralegals assigned to a team become unavailable due to shifting firm priorities or fall behind due to work overload, replacement or additional timekeepers must be assigned, briefed and brought up to speed, duplicating time already spent.

 7.  The client declines to pay for a certain timekeeper’s billings because that timekeeper is not on the “team” list that client approved.

In all these cases, the problems suggest their own solutions: careful scoping, realistic estimates, clear communications with the team and with the client, and a determination to keep all players in the loop at all times.  Really, it doesn’t seem that hard, does it?

© 2011, Edge International US, LLC.  All rights reserved.

No part of this post may be copied or reproduced without the express permission from Edge International US, LLC.

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2 Responses to The 7 Deadly Law Firm Write-Off Sins

  1. Pam, thank you for sharing your findings as they are important for all of us to stay on top of in order to intelligently lead our clients. If this list isn’t a call for firms to take a serious look at operations, I don’t know what is.

    It is quite disappointing that the majority of what you have outlined has to do with a lack of organization, analysis and communication, and could be completely avoided if there was adequate training in these areas.

  2. Pam –

    Concur with Nancy – important information and much needed.

    Your line about Best Practices, Worst Practices, and Non-existent Practices is excellent and made me smile.

    Spend most of my time with law firms in an area of non-existent practices:
    Almost no firms are intentional about how to manage internal conflict.

    I could add to your number an even greater amount firms loose annually from lost productivity/time, turnover, and formal disputing due to unconsidered and under-managed conflict.

    Why is that Law Firms, looked to by clients for guidance on so many issues, are managed as badly as they are?

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