How one firm is honing a process and proprietary technology to deliver accurate estimates
Carter Arey is a senior counsel at McGuireWoods who co-leads the firm’s ClientSync team. Her focus is on legal project management (LPM), which is designed to help the lawyers deliver what their corporate clients want: quality legal services, pricing and predictability that they can understand and plan around. The interview has been edited for length and style.
What role do you play in managing McGuireWoods’ billing and project management and budget tracking processes?
Carter Arey: I support all of our corporate attorneys with training on LPM principles and best practices. Because ClientSync is attorney-driven, I think that differentiates us from other firms. The ClientSync team doesn’t directly manage projects. However, we empower our attorneys with LPM principles and skills to run their own matters more efficiently and cost-effectively. Rather than having consultants or other project managers come in, we equip our lawyers to do it themselves, which I think, based on our culture, is more successful.
Can you talk a little bit about what LPM is for any readers who may not be familiar with it?
Arey: Legal project management is really about bringing project management skills to the execution of legal work. It’s not rocket science, but it is a way to instill transparency, discipline and predictability for our clients. To give a real-world example, when you have your house renovated, and my husband and I renovated our house not too long ago, you sit down with your contractor and you outline the scope of work. You come up with a budget and a timeline. As your rehab progresses, if things outside of the scope come up – in our example, we needed a new HVAC unit, which was not in the budget – our contractor came to us and said, “Hey, we really need to address this. Are you willing to spend more money on it?”
In lawyer-land, sometimes people just do the work and expect that their clients are going to pay for it. With ClientSync, we’re applying a framework for that kind of communication and transparency in the legal field. I think that as clients have less money to spend or want to make sure they are on target for their internal legal operations budget, using LPM principles can help us meet those expectations.
In your experience, how do clients or prospective clients respond to working with your ClientSync program?
Arey: We’ve had a lot of positive reaction from our clients. It’s well-received when they see that we have a commitment to communicating and collaborating with them, to helping them build their budgets, to helping identify and address inefficiencies, and using the ClientSync program to help gather data to continuously improve our delivery of high level client service in a more cost-effective and efficient manner. Again, it helps ensure predictability and transparency, and that makes them happy. Clients want to know that we’re going to communicate along the way. As legal operations departments become more prevalent and they see that we have leaders focusing on similar concerns internally at the firm and with our clients’ interests in mind, it will continue to be well-received by them. ClientSync and LPM principles promote collaboration with a client, and I believe that increases the value of the relationship on a number of levels.
Are there certain types of matters that benefit more from the ClientSync team efforts?
Arey: I think all matters could benefit from ClientSync, but there are some that probably benefit more than others. One type is AFAs – alternative fee arrangements. Quite often that comes in the form of a fixed fee. If we are trying to deliver work at a particular price, then using LPM principles and Compass – the internal budget tracking tool McGuireWoods developed – can really help our client teams and the attorneys working on the matter know how the matter is progressing in real-time to ensure that we can deliver the work at that price. In addition, Compass helps our attorneys more quickly identify scope creep, which is important to monitor. We help educate our attorneys that with AFAs it’s crucial to outline what the particular scope is, what’s included in the work and what’s excluded from the work. The use of Compass and task codes help attorneys keep an eye on that scope.
I’ll mention that task codes are now universally required for all matters that have been opened since September of last year. That’s not only on the litigation side, but also on the corporate side. In addition to AFAs, highly complex matters can also benefit from utilizing ClientSync resources. These are matters that involve large teams in different departments and offices. In those instances, the matter-supervising attorney and the lead folks on a transaction or litigation matter can go into Compass and see in real-time who is doing what work. They can keep an eye on how the matter is progressing and be prepared to convey that to our clients.
You launched ClientSync in 2014, so it’s about three years old. What are some of the challenges and opportunities that you’ve realized since launching?
Arey: Attorneys don’t like to be told what to do. That’s probably the biggest challenge. But we get over the hump. I think it helps that we have two practicing attorneys – I was a debt finance lawyer and Angela Zimmern, ClientSync’s other co-leader, was a financial services litigation attorney – delivering the message. The fact that we have real experience and understand our firm’s culture really helps us tailor the message. As a result, our folks are more receptive to it than they might be if an outside vendor came in and delivered the same or a similar message.
Another challenge is ensuring consistency. We have many different client teams in a number of offices across the U.S. and Europe. LPM helps bring consistency to the delivery of services across our departments and offices. LPM is like a toolbox. It’s not one size fits all. Different tools may be better suited for different types of practices. So we try to let folks choose which ones are best for them in each circumstance.
We also have institutionalized certain ideas and practices here at McGuireWoods. In addition to LPM, we’re working on our knowledge management initiative. We share best practices. We connect people with others who can help with existing matters and we connect them with relevant work product or resources to leverage the intellectual capital we have in-house. Again, this is all with the underlying idea of being more efficient and cost-effective with our client service, but also making sure that it is the highest level that we can provide.
How does the use of technology help bring more transparency to client billing?
Arey: Compass has really helped us with that. Compass gives real-time information. It pulls directly from our timekeeping system and is updated every 15 minutes, so you know where your matter stands at any given point. Your client can call you and say, “Hey, it’s the 18th of the month. Where are we this month on our legal spend?” Compass gives you information to respond in the moment, rather than waiting until the beginning of the next month, when the pro forma is in your inbox, to figure out where you are. We give our folks as much information as possible so they can better communicate with their client and avoid surprises.
The universal task code implementation allows us to break time entries down by task, so you can see what work is actually being done and by whom. It does away with block billing and hiding the ball. It shows what is actually going on with a particular matter – both on the litigation and corporate sides. We worked hard to develop useful and informative task codes for all of our departments, particularly on the corporate side.
What new priorities, including requests for alternative fee arrangements, are you seeing through the RFP process?
Arey: AFAs have been requested for a while – or the predictability in pricing, which often results in an AFA. You see questions like, “What’s your firm doing about delivering cost-effective service?” They may not mention LPM specifically, but they are asking about what our firm is doing from an LPM perspective. Knowledge management has also come to the forefront, which is, again, harnessing your intellectual capital. Knowledge management may mean something different to different firms, but ultimately it gets at how you’re connecting people with people, and people with information. We recently added Meredith Green to our team to help lead the firm’s knowledge management initiative. I think that shows our firm’s commitment to being responsive to our clients’ needs.
Another overarching theme is that clients are asking how we as a firm can add value to the relationship. Not just about executing the work or addressing the case or transaction they have, but how we can really bring value to them. That may include things like possibly training their in-house folks on LPM principles, providing CLEs for them internally on other topics, providing secondees and generally being more collaborative.
Clients want to know what we’re doing at the firm to innovate. One way I think we’re being innovative is with data analytics. We have a data analytics manager who is part of the ClientSync team and works with us not only to look at our data internally but also to help with predictive modeling and other types of machine learning for our clients. This could help our clients understand, for example, to anticipate what legal spend might be or to figure out where they might be sued in the future, that sort of thing. Recognizing the firm’s use of data analytics plus a number of other innovative initiatives, McGuireWoods was named among the top 10 law firms in the Financial Times’ North America Innovative Lawyers report last year. I think that recognition demonstrates we are focused on innovation.
We speak to a lot of the legal ops folks and have been following them. They are all “teched up” with dashboards. They look like day traders.
Arey: And that’s influenced us. For example, we’ve got Compass. It’s something that we created in-house and continue to enhance. We have a meeting every two weeks to talk about how we could change it, and we solicit feedback from our attorneys to guide our discussions. That feedback helps us determine how we change the software. An attorney dashboard or performance dashboard is certainly one of the things that we’re working on right now, because they need to have that information front of mind. And it will be one of the first things they see. That information and knowledge can change the way attorneys think and, hopefully, perform.
What new best practices have emerged regarding legal pricing?
Arey: Some of the trends have continued, like AFAs. They’re not new, but they’re certainly an expectation now from our clients. In a 2016 BTI Consulting survey, McGuireWoods was named one of the go-to firms for AFAs, based on a number of factors, including our ability to enter into them quickly and our willingness to take some risk, put some skin in the game. I think that shows our commitment there. So that trend has continued. Clients expect to be involved with structuring their budgets. They expect discourse throughout the billing cycle. They want invoices that are clear and transparent, which I think we’ve accomplished through our use of task codes.
We are also using data analytics to more accurately calculate the projected costs to execute a matter, and this helps clients with pricing. Rather than structuring AFAs anecdotally on what an attorney remembers of their past experience, we are formalizing a model where we can go in and harness real data from similar matters handled by lawyers within the same department to get a more accurate sense of what a representation will cost. For example, our lawyer can see data that shows what the cost is of representing a lead lender in a syndicated credit facility for an investment-grade borrower within a particular industry. That level of data and knowledge-sharing makes AFAs truly successful.