Clients are demanding more for their money now than ever before. And they're getting it, either by hiring firms that use outside attorneys who charge as little as $75 an hour or by sending work overseas. Technology and a surplus of attorneys are putting heavy demands on boutique law firms to be more efficient.

In response, smaller firms are adopting techniques proven successful in professions such as engineering, health care and information technology. Companies in those fields use formal project management to make the greatest use of people, time and budgets. They also apply it to client communications, risk management, goal setting, scheduling and management of expectations.

Large national law firms have used project management for years; boutique firms are just now starting to recognize the benefits and to incorporate project management systems into their practices.

Getting started often seems overwhelming because there are so many concepts, tools and methodologies to choose from. Search the Web for "project management budget" and you'll find an endless stream of images of tables, flow charts and graphics.

Don't give up. Similar to discovering a favorite flavor of ice cream, finding the best project management for your law firm is the first challenge. Instead of trying to implement a perfect program from the outset, make incremental changes that shift the firm to one capable of responding to complex requests for proposals.

Where do you start? With the areas that most benefit the client—goal-setting, budgeting and communications.

Goal-Setting

The first step, no matter what flavor of project management you use, is to define the scope of work. Once a client contacts an attorney to resolve an issue, the traditional flow of events involves an intake process and the creation of an engagement letter.

Legal project management promotes a collaborative approach with the client to define objectives and set the scope. The best practices involve:

• Gathering initial information from the potential client

• Conducting regular meetings with firm members to evaluate the matter and develop proposed deliverables

• Holding follow-up discussions with the client

• Documenting project scope agreements, which may be incorporated into the engagement letter, after the first three steps have been completed.

Keep in mind that some client-defined goals may not be legal goals. For example, a client may be more interested in reduced risk than prevailing at trial. Only proper information gathering at the outset can align the legal work with the client-defined goals.

Budgeting

In the current economy, clients are refusing to pay some expenses, questioning others and even hiring auditors who are rewarded for slashing bills. The centuries-old practice of billing for time rather than deliverables is giving way to a system that measures results.

A skilled project manager can assist with budget development and offer clients deliverable-based pricing for simple matters, and phased and contingent pricing for more complicated matters.

Skilled budgeting requires anticipation of tasks most likely to occur, relatively accurate estimates of work effort and identification of areas of risk that would increase the tasks or the effort.

The best budgets are developed with a keen eye toward goals developed during discussions with clients. Every planned task should be evaluated by asking three simple questions:

• Will the task move the matter closer to the client-defined goal?

• Is there another way to achieve the goal more efficiently and as effectively?

• If a risk materializes, how will that impact the price?

When sorting through the numbers, remember to highlight the value to the client. If the budget is a deliverable-based or some other alternative fee arrangement, the firm must ferret out wasteful activities and complete tasks with maximum quality and efficiency.

Communication

Good communication leads to high client satisfaction. During initial discussions, establish project-reporting protocols. Present status reports orally or in writing based on the client's preference.

Communicate early. Communicate often. If things start to go off plan or risks start to materialize, do not delay in contacting the client!

Delivering these client-centric benefits will enable your firm to meet market demands for predictable pricing while developing a project management system that best fits its culture. Focus first on client-defined goals, a deliverable-based budget, and a reliable communication schedule. From those essentials, the rest will follow.