Editor’s note: This is part of an occasional series examining how individual firms implement project/process management techniques.
When Pepper Hamilton hired a businessman to serve as its CEO, it set the tone for how the firm would approach the delivery of legal services.
Since Scott Green took over as CEO in February 2012, he has drawn from his days running business operations for WilmerHale in creating two new positions for Pepper Hamilton.
Jason Lichter joined Pepper Hamilton in September from Seyfarth Shaw to serve as the firm’s director of discovery services and litigation support. A month later, Peter Lane Secor left his role as manager of complex client services for WilmerHale to join Pepper Hamilton as the first director of strategic pricing and project management.
About six months into their roles, Lichter and Secor are working together to implement project management and profit analysis on a growing percentage of the firm’s matters. According to Secor, matters accounting for about 50 percent of the firm’s revenue are currently run through his office, which includes himself and a part-time employee.
For Secor, project management and pricing analysis often go hand in hand. A firm can’t staff a matter without knowing how much aspects of it cost and can’t price a matter without knowing how best to staff it. Luckily for Secor, Pepper Hamilton had been tracking pricing data for the past two years, giving him plenty to work with in analyzing Pepper Hamilton’s pricing models and creating budgets and forecasts for firm clients.
Rolling out project management in the firm isn’t like flipping a switch. Secor has met with various practice groups and visited the firm’s offices to explain his role. Both Secor and Lichter noted their roles really only work in a team environment that gives the merits attorneys, relationship partners, project managers and clients a seat at the table.
A lot of what Secor’s group does is helping the firm explain its value to clients and helping clients explain the value to their business units, Secor said. Pepper Hamilton sends some clients monthly reports on where an engagement stands and how it is being managed.
Secor’s role on the pricing analysis side joins him with a new but rapidly growing group of Am Law 200 firms that are hiring strategic pricing analysts to craft pricing strategies at law firms, according to a September 2012 report by Legal affiliate Corporate Counsel.
Secor said it is one of the most sought after positions when it comes to back-office operations at law firms.
When looking at the cost of different Pepper Hamilton services, Secor said he will determine whether the cost and pricing model fit within the firm’s current portfolio. For example, Pepper Hamilton may have too many ongoing matters at one time that are done on a capped-fee basis, so a new matter should be priced in a different way. And sometimes firms will take on work at a loss in order to get future, more lucrative business. Secor’s group will be tasked with tracking all of that to ensure the firm’s overall portfolio is profitable. He said it isn’t always about the amount of revenue a matter brings in, but the quality of that matter.
Tracking such matters will also build Pepper Hamilton’s library of project management templates. While each matter is different, the more that alternative fee arrangements are adopted and tracked, the more quickly they can be tweaked to fit a new matter, he said.
While Pepper Hamilton has tracked its data for a few years, it always needs to be adjusted according to current trends. Secor noted, for example, that e-discovery has created a huge change in how matters are priced.
On every matter intake form filled out at Pepper Hamilton, partners can note whether the matter might be handled on a non-hourly-fee basis. If the “non-discount” or “non-standard” boxes are checked, the matter goes to Secor’s office and he talks it over with a designated partner group to discuss possible pricing and staffing options.
While Secor is working on the firm’s overall portfolio, a piece of Lichter’s role is overseeing the project management aspect of a matter’s e-discovery component.
Lichter recently hired a discovery services coordinator to track the firm’s e-discovery metrics and renegotiate with staffing agencies that provide contract attorneys. His group also includes three senior e-discovery attorneys who oversee the large-scale document review. Additionally, the firm has three project lawyers who perform the more sophisticated document review and head the firm’s quality control efforts on reviews handled by contract attorneys.
Lichter said he and Secor have been talking about designing different pricing models for the document review work the firm does. Vendors have been able to offer a price-per-document-reviewed model in lieu of the hourly rate, Lichter said. Such a model hasn’t hit firms in a big way yet, however.
But as Pepper Hamilton tracks the specific e-discovery metrics, it can get a better sense of what each piece of the discovery and review will cost and can break that out even further by typical linear review on one end, or full-blown technology-assisted review with predictive coding on the other, he said.
As that data is tracked, the firm can offer more creative pricing strategies that give clients more cost certainty, Lichter said.
“You need a lot of historical data to figure out what that appropriate number is to be enticing for clients but wouldn’t result in either side taking a bath so to speak,” Lichter said.
It isn’t a matter of time for Pepper Hamilton, but more a matter of having enough of a variety of matters come in the door to provide that historical data. Lichter said he wants to know price points across litigation type as well as by the number of documents a matter requires be reviewed.
When a new matter gets going at the firm, Lichter’s team has a discussion with a member of the case team, who is typically the senior associate. They run down a checklist of items to ensure best practices are being used on preservation and what the next steps will look like in terms of collection, processing and review and how those pieces will be staffed.
“Today through outreach and sort of evangelizing, case teams know to call us,” Lichter said.
But that process will soon become more institutionalized when Lichter starts getting notification when litigation matters are opened. His team will then reach out to the lead attorney on the matter to map out an e-discovery game plan.
With Secor and Lichter six months into their roles, it’s clear project management takes time to implement on a firmwide basis. Secor noted that, while partners use project management components in their daily practice without realizing it, not everyone adopts full-on training. He said attorneys and clients alike each approach project management from a unique perspective.
“This needs to be a scalable approach,” Secor said. “People have different stomachs for it.”