PUBLISHED:June 15, 2010

Building efficiency, controlling costs through “legal project management”

As head of Morris Manning & Martin’s Atlanta-based Corporate Technology Group, John Yates’ practice includes a full range of legal services for technology businesses and technology-enabled companies, including many that are backed by venture capital and private equity and headquartered in the Southeast.

Yates notes that, given his firm’s focus on legal project management, they were able to benefit from the “tech wreck” of 2000.

“Our clients were concerned about controlling expenses so they could use cash to grow their businesses — and we knew this would be a long-term concern for general counsel,” recalls Yates ’81. “We observed that our tech-savvy clients tended to use efficiency tools, many of which were driven by the use of project management.

“About seven years ago, we noticed that our clients were using project management to fix-fee IT projects. One client asked me an enlightening question: ‘Why don’t you use project management in the law?’ That was our ‘aha’ moment.”

With that kernel of an idea, says Yates, the firm began to construct its “Legal Project Management” system, on which a patent is pending. The dynamic, technology-based system allows attorneys to construct project plans and budgets for client matters in practice-specific areas, and then monitor progress to ensure compliance.

“Up front you build the project plan with the specific tasks, so you know exactly what needs to be done, how much time is to be allocated to each task, and the hourly rates for performing them,” Yates explains. “You can tell the client, before billing the first minute of time, what’s involved in that project. If it’s an M&A matter, for example, you have a good idea of what’s involved — from the term sheet or letter of intent through the due-diligence process, negotiations, document preparation, government filings, clearance, and closing.

“The system allows you to set expectations with your client up front — you provide a road map indicating what you’re going to do and what the expected costs are. You align their expectations with yours.” Variable fee arrangements for all or any portion of a project can be built into the model and, should facts change or a transaction be discontinued, they can be incorporated quickly so that all parties sign off contemporaneously, “rather than after the deal, when memories fade,” Yates notes.

Training of early-stage associates is built into the model, he adds, again using a transactional matter by way of example. “You can point an associate to two or three templates that illustrate the whole process for certain types of M&A transactions. They can see the timing, budget, costs, and how the deal transpired. So they can see, in an efficient manner, how a deal is done.” If the associate takes more time on a specific task than the model calls for, the firm can adjust the client-cost to conform with the fixed-fee model, he says. “There’s an appreciation and advance discussion of how much additional time is required, rather than the associate guessing about the amount of time needed to complete the task.”

Yates’ firm has hired a professional project manager to oversee use of the project-management system and educate attorneys on the new system of delivering legal services — not one that depends on a certain number of billable hours available, he notes. “The new model is based on the idea that clients want services performed efficiently based on a predetermined and mutually agreed upon project plan.”