By and -

Snapshot

  • Professional managers are becoming more prevalent within legal practices and in-house legal teams.
  • It is critical that lawyers understand how managerial approaches relate to their professional obligations.
  • This paper analyses the extent to which Legal Project Management can support as well as challenge legal professional values and rules of conduct.

Managerial concepts and practices – and indeed professional managers – are becoming more prevalent within legal practices and in-house legal teams. It is critical that lawyers understand how managerial approaches relate to their professional obligations. This article reviews Legal Project Management (‘LPM’) as one such emergent area of ‘managerial’ practice, and investigates the way in which LPM both supports and challenges legal professional values and conduct rules.

LPM applies project management approaches to improve the delivery of legal services1. According to LPM, every legal matter or case is a separate ‘project’, that is, ‘a temporary endeavour undertaken to create a unique product, service or result’2. LPM is sometimes referred to as ‘matter management’ or ‘case management’. Examples of LPM include legal teams engaging in:

  • up-front strategic planning about legal and non-legal considerations relevant to delivering the client’s objectives in a matter (or later, a case);
  • planning the tasks required to deliver a matter, and then documenting, tracking and reporting upon the delivery of these planned tasks;
  • using historical data about completed tasks (such as scope, duration, costs, resources and risks) to help estimate these same parameters for future tasks;
  • approaches to enhance the communication and delegation between team members; and
  • methods to help continuously improve the effective and efficient delivery of legal matters.

The proposed benefits of LPM are in assisting the ‘successful’ delivery of legal services – noting that ‘success’ is defined subjectively according to each person or entity involved in a matter. From the legal team’s perspective, these benefits generally relate to minimising surprises (through improved planning and risk management, for example) and maximising ‘return on effort’ (such as improved estimating, resources utilisation and budget management, and reduced re-work through better communication)3.

Unlike the legal profession, project management is not directly regulated. However, project managers who are members of credible professional project management associations are subject to those associations’ respective codes of ethical conduct and practice. For example, the Australian Institute of Project Management’s code of conduct covers integrity (honesty and avoiding conflicts of interest), leadership and responsibility (extending to social and environmental interests), competence, lawfulness, and upholding the profession’s reputation4.

Whilst for LPM practitioners it would be desirable for these professional obligations to align with legal professional ethics, to-date, such a discussion has not occurred. In this paper, we analyse the extent to which LPM is aligned or divergent with lawyers’ professional responsibilities in three areas: (i) providing transparent legal costs and affordable justice; (ii) being a client’s trusted advisor; and (iii) retaining independence and integrity.

Transparent legal costs and affordable justice

Historically, lawyers have provided their services on a time and disbursements basis. The Legal Profession Uniform Law (‘LPUL’) costs disclosure regime requires NSW lawyers to communicate to clients ‘the basis on which legal costs will be calculated and an estimate of the total legal costs (s 174(1)(a)) – with notable exclusions from this disclosure requirement for any ‘commercial or government client’ (s 170(2)).

LPM offers a framework for more accurately scoping, scheduling and costing matters.

For matters with a higher degree of certainty about the legal work required, this is achieved by: (i) deconstructing a matter into its underlying activities; (ii) developing standard descriptions for these activities (e.g., labelling ‘discovery’ tasks the same way, even across different matters), and then (iii) recording performance data for these activities, such as time, cost, resources and delivered outputs. The outcome of this process is also a set of highly structured performance data, which enables lawyers to track the performance of their current matter more accurately, as well as make more informed estimates about future, similar matters. As noted in the Law Society of NSW’s Costs Guide (2017), matters with more standardised sets of activities may be suitable for fixed fees – and the structured data provided by adopting an LPM approach will help inform the accurate calculation of these fixed fees. Indeed, the ability to determine costs and resources more accurately may, in some circumstances, make such matters suitable candidates for outsourcing to Alternative Legal Service Providers5, subject to considerations such as volume, data sovereignty and risk appetite. This provides lawyers with a lower cost base option to provide their legal services.

For matters with less certainty about the exact legal work required (e.g. in a long-running litigation), LPM uses ‘agile’ project management techniques to provide more iterative planning and performance tracking, as well as ‘top-down’ estimating techniques such as using similar matters as a guide to provide more informed estimates. In practice, cost ranges with a lower and upper estimate are often used is these circumstances.

Regardless of the techniques used, LPM in this context enables:

  • more efficient, effective – and, by extension, more affordable – legal services; and
  • informed and transparent costing discussions with clients.

Recent costs disputes, such as Shi v Mills Oakley [2020] VSC 498, highlight the importance of tracking and reviewing costs estimates as a matter progresses. LPM provides a structured basis for doing so. This is particularly relevant where the basis of a costs estimate – specifically, where the scope of work to be delivered (as distinct from the agreed rates) – has changed. If these scope changes are not discussed with the client in a timely manner, the lawyer faces a Morton’s fork: either accept the additional work without additional payment (what is referred to in practice as ‘scope creep’) or risk a potential subsequent costs dispute. Whilst we note that changes to agreed rates should also be disclosed promptly, in this article, we are focusing upon changes to scope.

A similar challenge arises where a lawyer identifies additional ‘out of scope’ work which they believe is required to deliver the client’s objectives. In this scenario, the lawyer should first confirm the revised scope before proceeding, or else risk a costs dispute and/or a negligence claim. By clarifying and then tracking a matter’s scope and associated fees, LPM equally protects both the lawyer and the client6.

Noting these benefits, is it reasonable for clients to be charged for LPM activities? It is not permissible for a legal practice to charge for the preparation or giving of either a bill (LPUL, s 191) or a progress report of legal costs owed by the client to date (LPUL, s 190). However, it is permissible to charge for the strategic and detailed planning of a matter, and subsequently tracking and reporting upon the delivery of these planned tasks, as well as any further re-planning – subject, of course, to these costs being appropriately disclosed and approved in the costs agreement.

Lawyer as the client’s trusted advisor

A lawyer’s traditional duty to fearlessly serve their client’s interests has come to require, more explicitly, educating and empowering the client to understand their own interests and thereby make informed legal decisions (Australian Solicitors’ Conduct Rules 2015 (‘ASCR’), ss 7 and 8). By providing greater transparency in both the outcomes to be achieved and the activities required to achieve them, LPM practices support client autonomy. LPM encourages communication that is timely, responsive, accurate and complete7.

Furthermore, this process of clarifying outcomes helps lawyers meet their clients’ expectations by reducing the likelihood of mismatched assumptions8. This dynamic is itself a significant risk-mitigant for guarding against project ‘failure’, noting that:

  • a leading cause of project failure (across all sectors) is a misunderstanding of the client’s requirements or desired outcomes9; and
  • a repeat leading cause of professional complaints against lawyers is poor communication10.

Of course, realising these benefits is dependent upon lawyers choosing to communicate in a transparent manner, even when this communication is difficult – for example, reporting that a matter is delayed or has exceed the costs estimate; or admitting that a strategic approach or chosen technical platform (e.g. an online disputes resolution platform) is no longer suitable. In a global, cross-sector survey of 337 project managers, the most frequently reported ethical issue was a failure to disclose project performance issues11. Project managers may prefer to rationalise a previous poor decision rather than admit a mistake12.

There are further challenges that LPM can raise in respect to ASCR (ss 4, 7 and 8). In an increasingly competitive market, some lawyers may feel pressure to adopt contemporary ‘buzz word’ phrases such as LPM, and indeed to over-sell their relevant expertise, available resources, and process maturity in LPM. This temptation might be particularly so for larger, more complex matters requiring a considerable degree of matter management. Similarly, lawyers may feel pressure to underbid in order to secure an engagement, using scope exclusions and disclaimers to subsequently increase fees. In addition to potential breaches of the Australian Consumer Law and the ASCR, which prohibit misleading and deceptive or dishonest practices, such behaviour also disempowers clients to make informed decisions about the real costs or quality of their legal services delivery.

And finally, LPM challenges the legal profession’s historical focus upon ‘quality’ as a mark of professionalism. LPM recognises the importance of understanding and then operating within the client’s scope, time, and cost requirements (referred to in project management as the ‘triple constraint’). However, this does potentially give rise to a scenario where a client could request the delivery of legal services with such severe time and/or cost constraints that the lawyer would need to deliver less or lower-quality work in order to meet these constraints – or in client parlance, ‘do it quick and cheap’. Lawyers should remain mindful of their professional obligation to always deliver a ‘reasonable’ standard of legal service. In such circumstances, lawyers should clarify with the client what that standard is, whilst being aware they cannot vary their standard of care to below ‘reasonable’.

Lawyers’ independence and integrity

Far from simply being professional oversight, LPM offers a participative form of matter management that supports more meaningful professional relationships and wellbeing. Industry practitioners assert that LPM improves:

  • teamwork and collaboration, by clarifying roles and responsibilities13;
  • delegation, by clarifying expectations and constraints (such as timeframes), and which in turn reduces rework and conflict14; and
  • the training and supervision of junior lawyers, by planning for the additional time and resources this requires, and accordingly managing the client’s expectations with realistic timeframes15.

Notwithstanding these benefits, increased collaboration potentially threatens individual professional responsibility – such as where legal work is performed across teams or practice groups16; or when lawyers follow pre-determined task lists or workflows, and particularly so if these tasks are embedded into automated systems17. Greater collaboration, especially where this extends the project team to third party providers, also means greater risk of breaches of confidentiality and conflicts of interest, as well as the inadvertent waiver of privilege (as recently highlighted by the 2020 cyber security breach of services provider Law in Order).

Lawyers should be aware of their ongoing requirement to exercise professional independence, including integrity and responsibility, regardless of the approach used to plan or allocate their work. Practically, this may involve: (i) lawyers being more involved in the development and periodic review of their templated tasks lists and automated workflows, (ii) clearly assigned tasks and responsibilities for team members, and (iii) ensuring that privilege, confidentiality, and conflict are reconsidered when new team members or third-party providers join a matter.

#This article is an output of the Law Society of New South Wales Future of Law and Innovation in the Legal Profession (flip) research stream at UNSW Law & Justice. The writers acknowledge flip’s funding support.

Endnotes

  1. Justine Rogers, Peter Dombkins, & Felicity Bell, ‘Legal Project Management: Projectifying the Legal Profession’ (2021) 2(2) Law, Technology and Humans <https://doi.org/10.5204/lthj.1610>
  2. Project Management Institute, A Guide to the Project Management Body of Knowledge (Newtown Square, Pennsylvania, 6th ed, 2017) .
  3. Therese Linton, Legal Project Management (LexisNexis Butterworths, 2014) (‘Linton’).
  4. Australian Institute of Project Management, Code of Ethics & Professional Conduct (2015) <https://www.aipm.com.au/documents/aipm-key-documents/aipm_code_of_ethics_2015.aspx>
  5. Thomson Reuters, Alternative Legal Service Providers 2021 <https://www.thomsonreuters.com/en-us/posts/legal/alsp-report-2021/>.
  6. Susan Raridon Lambreth and David Rueff Jr, Power of Legal Project Management: A Practical Handbook, (American Bar Association, 2014).
  7. Scott Preston and Ryan McClead, ‘Legal Project Management: Where Rubber Meets the Road’, 19 February 2013 <http://www.scribd.com/doc/126882202/ Legal-Project-Management-Where-the-rubber-meets-the-road>
  8. James Mullan, ‘Legal Project Management: Passing Fad or Here to Stay?’ (2012) 12 Legal Information Management, 214 (‘Mullan’).
  9. Project Management Institute, ‘Success Rates Rise: Transforming the high cost of low performance’, PMI’s Pulse of the Profession 2017 <https://www.pmi.org/-/media/pmi/documents/public/pdf/learning/thought-leadership/pulse/pulse-of-the-profession-2017.pdf>
  10. Office of the Legal Services Commissioner, Annual Report 2019-2020  <https://www.olsc.nsw.gov.au/Documents/2019%202020%20Annual%20Report%20final.pdf>
  11. Ralf Muller et al., ‘The Interrelationship of Governance, Trust, and Ethics in Temporary Organizations’ (2013) 44 (4) Project Management Journal 26–44.
  12. Jeffrey H. Schweriner. Ethics considerations for the project manager in professional services. Paper presented at PMI® Global Congress 2007—EMEA, Budapest, Hungary. Newtown Square, PA: Project Management Institute <https://www.pmi.org/learning/library/ethics-considerations-manager-professional-services-7398>
  13. Mullan, 215.
  14. Liz Harris, ‘Future Firm: Why Masterchef Should be on the Menu for Lawyers’, 2012, July, ALMJ 26–28.
  15. Linton.
  16. Christine Parker, Talia Gordon and Steve Mark, ‘Regulating Law Firm Ethical Infrastructure: An Empirical Assessment of the Potential for Management Based Regulation of Legal Practices’ (2010) 37(3) Journal of Law and Society 466–500.
  17. Justine Rogers & Felicity Bell, ‘The Ethical AI Lawyer: What is Required of Lawyers When They Use Automated Systems?’ (2019) 1 Law, Technology and Humans, 80-99 <https://doi.org/10.5204/lthj.v1i0.1324>

Dr Justine Rogers is Deputy-Director, Law Society of NSW & UNSW Law & Justice flip research stream. Prof Peter Dombkins is Adjunct Associate, UNSW Law & Director, NewLaw at PwC.