What every lawyer needs to know about project management, Part 2 of 5

What every lawyer needs to know about project management, Part 2 of 5

Is it possible to control the costs of legal matters?

While some lawyers have been working on a fixed price basis for years, others still believe that fixed fees simply cannot be applied to complex legal matters.  The cost of defending a suit may be very low if your opponent is willing to settle early in the process.  But if they engage in scorched earth tactics, the cost of defending the same matter will be much much higher.

While it is certainly true that total costs are impossible to predict, it is also true that some law firms are offering fixed fees for one phase of a case at a time.  This requires a "win some, lose some" mentality which many large firms now accept.  As the managing partner of a firm with over 1,300 lawyers put it:

Everybody in business plays the odds.  We've had situations in corporate deals where we've really gotten burned on something.  But if it's a good client, they don't say, "gotcha" and laugh about the fact that you made a bad deal. They say, "We're going to do more deals," and life goes on.  And you assume that you'll make it up in volume with better situations.

These days, many clients want predictable legal costs, and they will do business only with law firms that offer them. 

One of the most interesting observations in my research was made by a senior executive at a 1,000-lawyer firm who had previously worked at a publicly-traded real estate company:

The two most important people we had in the company were the estimator and the project manager. Law firms historically have had no one play either of those roles. It's very dangerous to move into a world of fixed fees if you don't have somebody who's capable of estimating and you don't have somebody who's capable of project managing.

To read more, visit the Legal Business Development Blog.