Client-Matter Level Budgeting Douglas M. Graham, Director of Administration, Fay Sharpe Jill Milkovich, Regional Systems Trainer, Squire Sanders Dave Moravcik, Finance Manager, Squire Sanders

Session Objectives  Gain appreciation of Why Important  Understand elements of Project Management  Gain ideas on how to support attorneys in process  Gain ideas on how to implement

Why?

Our Clients are Asking for PM “Does the firm have a formal process that enables it to forecast, track, communicate and manage a budget effectively? If yes, please describe.”

Our Clients are Asking for PM “Please describe how your firm would handle the project management of M&A transactions, especially in a highly matrixed organization.”

Our Clients are Asking for PM “Include in your description examples of any reports, work summaries, or other tracking mechanisms your firm would use to communicate with us and how the attorneys working on the matter will be coordinated within your firm.”

What is Project Management? A project is "a temporary endeavor undertaken to create a unique product, service, or result." Project management is "the application of knowledge, skills, tools, and techniques to project activities to meet the project requirements." Project Management Institute, A Guide to the Project Management Body of Knowledge (4th ed. 2008)

Project Management Life Cycle Phase 2: PLAN Develop Proposed Solution Design Phase 1: DEFINE Identify Need Visualize End Result Initiate Processes Phase 3: IMPLEMENT Perform the Project Execute and Control Processes Phase 4: CLOSE Complete the Project Close & Evaluate Time Activity Level

Phase I: DEFINE  Clearly visualize end result  Identify stakeholders  Determine how success will be measured

Project Vision Statement  Purpose  Description  Desired Results

All work performed shall be pursuant to a Work Plan and Budget … …shall reflect realistic projections of fees and expenses… It is the expectation…that actual fees and costs will not exceed these projections. Revisions…to reflect changed assumptions, unanticipated tasks, etc. must be discussed with and agreed to…before they are made. …must review…at least on a quarterly basis and revise it… Example: Billing Guidelines

Project Management Life Cycle Phase 2: PLAN Develop Proposed Solution Design Phase 1: DEFINE Identify Need Visualize End Result Initiate Processes Phase 3: IMPLEMENT Perform the Project Execute and Control Processes Phase 4: CLOSE Complete the Project Close & Evaluate Time Activity Level

Phase II: PLAN  Work plan  UTBMS  Work elements, definition, “deliverables”, timelines

Phase II: PLAN  Staffing plan – the right people for the right job “To promote effective use of time and skills, we request that Counsel….assign the appropriate minimum number of staff and appropriate level of legal talent to each matter. For instance, we expect that tasks that do not require the skills of a lawyer will be done by paralegals and tasks that do not require the skills of a partner will be done by associates or paralegals. When more complex matters may be handled more cost effectively by a partner with expertise in the subject matter, rather than by an associate, we expect the partner to be used.”

Apply Prior Experience  We’ve all done this before  Find similar cases/projects  Use UTBMS codes to assess past projects  Outside/Local counsel  Measure the need  Budget in disbursements

How to Turn it into a Budget  Concepts behind building budget models  It takes two to tango  Measure Statistics  UTBMS codes – costs per phase  Time spent per case  Will we be profitable?  Open v. Closed Timekeeper Choices  Do we choose timekeepers for case We have more leeway  Are we told who to use

External Resource Plan – Outside Vendors  Monitor vendors/projects  Large projects – weekly review  Smaller projects – monthly review  Central authority for review/approval process  Consistency  Eliminates duplication  Outside/Local counsel

Planning for the Unexpected  Phasing  Decision trees/value analysis (risks & rewards)  Go/No Go factors

Phase III: EXECUTE  Managing the Project  Communication  It’s all about the deliverables  Managing the Client  Communication  Change orders  Gaining buy-in – decision sign off, planning participation

Accounting for Progress & Changes  Attorney who understand the case/project  Are we where we need to be?  Dollar-wise  Project-wise  Adjustments for change in scope

Billing  Bill regularly  Use progress bills  Quarterly bills – bill promptly  Keep and eye on A/R  Monthly retainer?

Phase IV: Close & Evaluate  How did we do?  What did we learn?  What can we do differently next time?

Links  ACC Value Challenge ACC Value Challenge  Legal Project Management Legal Project Management

Questions?