Creating an LPM Function Is the Start — Implementing It Is the Goal

James Palmer’s column on Oct. 17, 2024 in Corporate Counsel, noted that “GCs Struggle to Grasp Scattershot Nature of Law Firm Rate Hikes.” Jason Winmill of the Argopoint consultancy described this as “utterly bewildering.” But industry analysts will tell you it’s the root cause of these rate hikes that’s really bewildering. It’s structural, it’s within law firms and it can be changed.
On the one hand, Big Law is locked in this endless struggle to compete on metrics: revenue per lawyer; billable hours; realization rates, and of course profit per equity partner. The fact that these are all the wrong metrics to define success is a separate discussion. On the other hand, many of these firms don’t have profitability models. And even those who do, struggle to implement them. This is super-important, so let’s break this down.
Growing numbers of firms are rolling out profitability models. At the heart of any good profitability model is Legal Process Management (LPM). LPM covers many attributes, but it usually sits within the pricing teams, which are part of the finance function. But then comes the bigger challenge — implementation. Without implementation, all of this goes nowhere.
Be it business or baseball, it always comes down to execution. It’s the front-line lawyers who fail to scope assignments properly, misunderstand instructions, research irrelevant issues, duplicate effort and fall into all the other error states. If you want to address unbillable time and invoice adjustments, look at the lawyers.
Our industry suffers from an epidemic of wasted attorney effort. This erodes productivity, revenue per lawyer, matter profitability and overall enterprise profitability. In this way, law firms lose incalculable sums of money every year through lawyer methods. So, what law firms do to try to counterbalance? They de-equitize partners. But you can only do that so many times. In the end, they’re left with just one tool — raising rates. 
The clients, meanwhile, are commercially operated businesses. They understand efficiency and effectiveness at all levels of the workforce. No wonder they’re bewildered.
Profitability may be planned in leadership meetings, but the execution is at the working attorney level. The real challenge then, is implementation. Equipping the pricing team with LPM skills is only the start; firms also need to equip their attorneys with LPM skills. But how? How do you upskill the attorneys? Here’s our 3-step change plan to boost profitability by implementing LPM.

1. Start at the top: Law firm leaders need to be aligned, intentional and committed to this. Then comes the messaging. As with selling any change, leaders need to identify a goal, make a case, and convince the community. That means they need to be very clear on both the “why” and the “how.” The “why” is easy, but it still needs to be stated clearly: we’re losing money, we’re losing market position and we’re losing pitches (since many RFPs now require LPM competence). The “how” is less well-understood, and it takes us to next 2;
2. Identify champions: Big improvements start in small teams, led by champions. These champions will need to be partners, to have local authority, and they will need to be incentivized, equipped and supported. Which leads us to step 3;
3. Equip the troops in the trenches: We can’t overstate the importance of this last component. You are asking a bunch of busy, change-averse attorneys to change their methods. It’s not a radical change, just a sprinkling of secret sauce, to augment their natural talent. But it’s not something they’ve been trained in, so you’ll need to equip them.

*****

Alex Geisler is a London-based litigation partner with Duane Morris. His Lean Law Program, www.lean.law, goes back to his early representations of auto manufacturers, a clientele known for its embrace of lean manufacturing principles. Lean Law can be used to acquire the untaught skills and learn how to practice law the way clients want: Efficiently; Effectively; Transparently. He can be reached at [email protected].