Guide to ACC Value Challenge Project Management.

Transcription

1 Guide to ACC Value Challenge Project Management

2 THE BUSINESS CASE The shifting realities of the corporate environment are creating a number of new challenges and pressures and forcing legal departments to change the way they conduct business. The overarching challenge is the need to define and articulate the department s value in business terms, to the CEO, CFO, and other executive management. Being able to define value requires putting legal work in context of the business. Demonstrating value also means establishing appropriate metrics and measurements both to drive the desired behavior and evidence successes. In short, legal departments are now being compelled to operate in a more structured, predictable manner, i.e., more like their internal business clients. The evolution of clients expectations of in-house counsel is driving the need for project management. Many years ago, clients expected only substantive legal knowledge from their inside counsel they wanted their counsel to be able to provide the answer to a legal question on request. Over time, counsel were expected to have business acumen as well, so that they were providing legal advice in the context of the business strategic goals and direction. Now, with these changes, clients also expect efficiency and predictability and consistent delivery of services. These two factors the expanding role of in-house counsel and the expectation of efficiency and predictability drive the need for project management. Figure 1 illustrates this concept. Consistent Delivery Efficiency & Predictability Business Acumen Substantive Legal Knowledge 2011 Huron Consulting Group. All rights reserved. Proprietary & Confidential. Fig. 1 Evolving Expectations for Legal Department Success Drives Need for Project Management Maturing expectations of clients + Cost Reduction Pressures + Internalizing work + Unbundling legal services + Multiple players involved +Outside Counsel no longer the General Contractor = Legal Departments must take on Project Management to provide direction, continuity and coordination. Legal departments have responded to these expanding expectations by working to improve departmental efficiency and predictability. Some departments are internalizing work where appropriate, unbundling legal services (for example, reallocating certain discovery tasks to non-law-firm vendors or taking them inhouse), and increasingly using value-based (a/k/a alternative) fee arrangements to achieve cost predictability. All of these changes mean that for any given legal matter, there are now frequently multiple players involved: at a minimum, in-house counsel, outside counsel, and outside vendors. While in the past the outside counsel was the general contractor coordinating the roles of any external vendors such as court reporters and experts, that is no longer necessarily the case. The legal department has, in essence, taken on that role. In order to provide the necessary direction, continuity, and coordination to these matters, the legal department must embrace project management. While many legal departments may have in place some of the components of project management matter budgeting, for example typically they haven t integrated these components into comprehensive project management, or are just beginning to do so in limited areas. The need for project management first became apparent to law departments with two 2 ACC thanks Nancy Jessen and Bret Baccus of Huron Legal for their work on this ACC Value Challenge Resource.

3 developments: the desire for value-based fee (VBF) arrangements and the proliferation of e-discovery projects. Project management techniques can help law departments determine which matters are appropriate for VBFs and whether the proposed fee arrangements are cost-effective for those matters and manage the more and different types of players and timelines involved in e-discovery. Benefits of Project Management Project management has a number of benefits. By creating a disciplined approach to legal work, project management results in improved use of resources and improved performance against budgets. Because tasks are clearly assigned, it reduces duplication of effort. The existence of a defined, detailed plan provides the context for team members to understand expectations and outcomes. Ultimately, project management results in more effective planning, cost control, resource allocation and appropriate risk management throughout the duration of a case/project, giving project team members the structured tools to make deliberate, fact-based decisions. ACC Resources: The Business Case Perfecting Project Management (ACC Docket Vo. 28, No. 10, p. 64, Dec. 2010) THE BASICS Definitions Project As defined by the Project Management Institute, a project is a temporary endeavor undertaken to create a unique product, service, or result. 1 In this context, the word temporary does not apply to the resulting product or service itself, but rather means that every project has a definite beginning and end, reached when the project s objectives have been achieved, or it becomes clear that the objectives cannot or won t be met, or the project is terminated because it is no longer needed. 2 In the legal department context, projects would likely involve the execution of a specific piece of legal work (for example, a litigation case, an acquisition, an SEC filing, or an investigation), or could involve a departmental improvement. This Guide focuses on projects involving the practice of law the execution of specific legal work. Project Management Project management is the application of knowledge, skills, tools and techniques to project activities to meet project requirements. 3 It is accomplished by applying and integrating the following project management processes: initiation, planning, execution, monitoring and control, and closure. 4 In the legal department, merely having in place matter management software is not enough for project management. Project/case management requires formal and deliberate integration of planning, budgeting, and communication. 1 A Guide to the Project Management Body of Knowledge (PMBOK Guide) 5 (3d Ed., Project Management Institute 2004). 2 Id. 3 Id. at 8. 4 Id. ACC thanks Nancy Jessen and Bret Baccus of Huron Legal for their work on this ACC Value Challenge Resource. 3

4 Role of the Project Manager The project manager can serve as both a facilitator and a decision-maker during the course of the project. The legal project manager s role includes the following: Upfront planning to define and gain consensus on the scope and required effort Coordinating resources human, financial, and other Establishing communication mechanisms Identifying interdependencies between tasks and resources Managing the work plan and updates Connecting people with questions to appropriate people with answers Balancing project scope, time, people, and cost to manage quality delivery and hedge risk Who should perform this role in legal project management will vary depending on the organization. Whether the project manager should be a lawyer is an open question. It can be argued that a lawyer s understanding of the matter s substantive requirements and issues can be beneficial when making judgment calls and balancing priorities. On the other hand, most lawyers are not trained in project management and arguably many are predisposed to focus more on exhaustively undertaking the scope of the project rather than being attuned to related effects on budget, timing, or staffing. Law departments sometimes ask their outside counsel to undertake project management. There may be questions about how that service is integrated into the billing arrangement, particularly if the project manager is not a lawyer. As an option, the law department s operations group can provide project management capabilities and resources. If the law department doesn t have a dedicated operations group, it can look outside the department or tap an existing department member. Regardless of who undertakes project management, however, it is best to define the project manager role on each case and project instead of simply assuming that someone will take it on. Practice Tip Other Corporate Resources There s no need to reinvent the wheel. If the law department doesn t have trained project managers, consider looking to other corporate groups for project management resources and tools. Other departments may have the following resources: IT resources Quality Control systems Six Sigma programs Process Improvement programs When to Initiate a Project Once legal departments have an understanding of project management techniques, ideally they should follow general project management principles when conducting all their work. A defined, formal project, however, is particularly appropriate for work efforts that have greater scope, longer term, higher cost, involve a number of stakeholders both inside and outside the department, or involve considerable tracking of information. Depending on how the department defines a matter, it may be appropriate to initiate a project whenever a matter is initiated that is expected to involve a certain level of spend. 4 ACC thanks Nancy Jessen and Bret Baccus of Huron Legal for their work on this ACC Value Challenge Resource.

5 Overview of the Project Management Process People Project management encompasses working within the bounds of several major constraints on the project, a change in any of which is likely to affect at least one of the others. Traditional project management theory defines three constraints: scope, time, and cost. 5 For Scope legal projects, an additional constraint must be considered: people. The figure below Time Cost illustrates the interrelated constraints on legal projects. For example, if the scope of a legal project remains the same but the time schedule is foreshortened, it is likely that more people will 2011 Huron Consulting Group. All rights reserved. Proprietary & Confidential. Fig. 2 Constraints on Legal Projects be required, also involving more cost. Similarly, a reduction in available funding might mean that either fewer people could work on the project or people at lower rates would need to do the work. The project management process requires clearly defining these factors - including identifying the various components of the project that contribute to each factor - then executing the project in accordance with the plan while continuously monitoring, controlling, and adjusting as necessary. As a best practice, the project management process also includes a review at the project s completion in order to measure the project s results against expectations and to capture lessons learned. This ACC Guide will outline step-by-step the project management process. The Guide includes illustrations, tables, and case studies to assist users in the process. The Guide discusses legal project management within the framework of the following phases, each of which will be discussed in the sections that follow: Scope Determining the goals and deliverables for the project Schedule/People/Budget Establishing the parameters within which the project will be accomplished Conduct of Legal Matter Carrying out the project within the established parameters, making adjustments as required Review Assessing the project results and lessons learned after its completion SCOPE SCHEDULE PEOPLE BUDGET CONDUCT OF LEGAL MATTER REVIEW 5 Id. ACC thanks Nancy Jessen and Bret Baccus of Huron Legal for their work on this ACC Value Challenge Resource. 5

6 ACC Resources: The Basics Project Management How to Plan a Business Process Review Project Legal Project Management Prudential Financial Inc.: Project Management as a Disciplined Approach to Successfully Integrating Major Projects SCOPE SCOPE SCHEDULE PEOPLE BUDGET CONDUCT OF LEGAL MATTER REVIEW Define the Scope Definition of the project s scope is the starting point for effective project management. The scope identifies what the project is to encompass and what it is to accomplish. The scope should be specific and realistic, and should be divisible into discrete tasks. It serves as the basis for all further planning and execution. As a best practice, the scope of the project should reflect alignment of business needs and objectives with the company s and the department s program objectives. Determining the scope requires analyzing the business needs for the project, looking at current operations, analyzing the project s costs and benefits, considering the stakeholders including potential team members and clients, and assessing the desired deliverables and timetable. Issues to address include why the project is important, what success will look like, what is needed, and what will ultimately be provided. A clearly defined scope will make it easier to determine the project s phases and timeline, staffing, and budget. A project charter is a key document within project management and includes the issues addressed when defining the scope. The charter identifies the team members and leadership and lays out the overall project description, the goals and scope of the project, key assumptions and risks, and timeline and dates for key deliverables. A sample project charter is attached in the Appendix. Define the Plan for Communication How, to whom, and how often will you communicate the progress of the project? It is important to define and develop a plan for communication at the time the project is begun, to make sure that all stakeholders are sufficiently informed and aware of developments. A good communication plan 6 ACC thanks Nancy Jessen and Bret Baccus of Huron Legal for their work on this ACC Value Challenge Resource.

7 identifies the goal of each communication; the target audience for that communication; and how the communication will be made, whether by meeting, , report, or other. The plan should also identify the parties responsible for initiating and tracking each type of communication and should state the desired frequency of each communication. Finally, the communication plan should identify the expected outcomes of the communication and specify responsibility for following up on any action items. A sample communication plan is attached in the Appendix. Practice Tip Stakeholder Communications In building the communication plan each stakeholder group should be analyzed to determine their support or opposition to the project. From that analysis, a specialized communication approach can be incorporated into the overall plan. Case Study: M&A Example For example, clarifying the scope of a merger or acquisition project involves consideration of several major issues such as: What is the overall goal to be accomplished by the deal? What are the key constraints that will impact the deal? What are the key outputs? Who are the key players? What is the schedule? Component factors of these issues might include the following: What will be the structure of the deal Asset purchase? Stock purchase? Merger? What are the requirements specific to that structure? What are the laws governing the transaction? (Jurisdictional rules, antitrust, securities regulations, employment laws, industry regulations, etc.) What agencies are implicated? What are the tax implications? What needs to be included in the letter of intent? What are the contingencies for completing the deal? What is the appropriate due diligence? What should it encompass and how extensive should it be? What are the financing issues? What disclosures are required and when? (Board, investors) What ancillary agreements will be required in addition to the purchase agreement? What is our deadline for closing the deal? Who needs to be involved inside the department, inside the company, at law firms, banks, or elsewhere? ACC thanks Nancy Jessen and Bret Baccus of Huron Legal for their work on this ACC Value Challenge Resource. 7

8 All of these factors play into determination of the scope of the project and the subsequent steps of developing the schedule and budget for the project and assigning roles and responsibilities. As with all projects, communication plans are important for M&A projects. There are a number of disparate groups involved. M&A projects typically involve most corporate business groups including finance, tax, HR, IT, compliance, audit, and legal. Depending on the nature of the transaction, they also typically involve a number of outside parties such as the buyer s and seller s outside counsel, the buyer s lender and lender s counsel, investment banker or broker, independent accounting and tax advisors, and also may involve other service providers. The communication plan for an M&A project would need to take into consideration all these groups and specify which players should receive which communications and when. Because of the sensitive nature of the project, the plan would also need to specify who has access to what level of information. ACC Resources: Scope Sample Project Definition Template Prudential Financial Sample DONE Statement Prudential Financial Sample DONE Statement Challenge Prudential Financial 8 ACC thanks Nancy Jessen and Bret Baccus of Huron Legal for their work on this ACC Value Challenge Resource.

9 SCHEDULE, PEOPLE AND BUDGET SCOPE SCHEDULE PEOPLE BUDGET CONDUCT OF LEGAL MATTER REVIEW After defining the scope of the project, it s time to identify the tasks and activities required to achieve the specified outcome. Begin with the major divisions project phases and milestones. Don t forget to include planning and administration as a specific phase. Planning and administration involve resources and cost, but many novice project planners fail to account for them when developing the plan and budget. The project should also have identifiable milestones specific events demonstrating progress or completion of a phase. For example, some milestones in a government investigation might include initial case assessment, document review, case and document preparation, interviews, court appearances, discovery, negotiation, and settlement. Once the major phases are determined, drill down to itemize specific tasks and activities within that phase, and the sequence in which those tasks must be done. For example, tasks in the document review phase of a legal case might include defining and developing a protocol for reviewers, training reviewers, and the reviewers conducting the actual review of the documents. Defining these phases, milestones, and tasks is the first step in developing the project plan. Key questions must then be answered with respect to these activities. What is the required timing for completion? Who will perform these tasks? How much will the various components and the entire project cost? Answering these questions leads to the development of a project plan the master document that integrates the project scope, milestones, schedule, responsibilities, and estimated cost. The project plan becomes the primary tool for managing the project. A sample project plan is attached in the Appendix. Schedule: Estimated Time Once activities have been identified and sequenced, it s time to develop the schedule. A variety of factors will affect the schedule. To begin developing the schedule, estimate the number and level of people required for each activity and the amount of time it will take them to complete each task. Use past experiences, estimates, and a contingency to estimate time. If the project is tied to a fixed due date such as a trial date, discovery deadline, deal closing date, or other target event, you must also use the due date as an end-point from which to work back to develop a schedule. Fixed, hard due dates may also affect project staffing and budget if extra personnel or rush costs are required in order to meet the deadline. The schedule developed from these estimates should include begin and end dates for each task and also for completion of the project as a whole. The resulting schedule becomes part of the project plan. ACC thanks Nancy Jessen and Bret Baccus of Huron Legal for their work on this ACC Value Challenge Resource. 9

10 Remember, time is one of the primary constraints of project management if it changes, it can have a significant impact on the project scope or the other factors of people and budget. People: Roles and Responsibilities Developing the project plan also includes determining who will be responsible for completing the specific tasks and activities. Take into consideration all of the people who could contribute to the project: lawyers, paralegals, support staff, other resources within the company, outside counsel, and vendors. Practice Tip Using RACI Diagrams When assigning roles and responsibilities, many project managers find it helpful to use a RACI diagram. A RACI diagram describes the roles of various teams or people involved in delivering a project. The RACI diagram provides structure and clarity to cross-functional roles on a project. The RACI diagram splits tasks into four key responsibilities, which are then assigned to different roles in the project or process. These responsibility types make up the acronym RACI: 1 Responsible - Those who do work to achieve the task. There can be multiple responsible persons or groups. Accountable - The resource ultimately answerable for the correct and thorough completion of the task. There should be exactly one A (accountable person) specified for each task. Consulted - Those whose opinions are sought. Consulting implies a two-way communication. Informed - Those who are kept up-to-date on progress of the progress. These are recipients of one-way communication. A sample RACI diagram is attached in the Appendix. 1 Some project managers prefer a RASCI diagram adding a category for those who support the project. ACC Resources: People ACC Guide to Value-Based Staffing The In-House Attorney as Project Manager 10 ACC thanks Nancy Jessen and Bret Baccus of Huron Legal for their work on this ACC Value Challenge Resource.

11 Budget: Estimated Costs Develop the budget based on estimates for the individual tasks. The level of budget detail will depend on the scope of the project; for major projects, the budget may be detailed down to the individual time-keeper level. Budget information should be an integral part of the project plan. Budget drivers include hours, rates, and expenses. If outside counsel are involved in the project, it is critical to work with them to develop the project budget. It is also important to consult with any outside vendors. As to internal costs, think of the law department team members time as currency: what is the best way to spend their time, and what is the opportunity cost for other things they could be doing? Other company personnel may have actual dollars associated with their time, e.g., IT personnel or a trained project manager. Both the law department and outside counsel and should be comfortable with the final budget and confident in their ability to work within the budget s parameters. Practice Tip Value-Based Fees Good project management facilitates the negotiation and development of VBFs such as flat fees and retainers (whether or not combined with success fees or collars). Scoping a project carefully as part of the planning stage including who will do what, how much effort they will put into it, and what they will deliver and carefully developing the budget aid the negotiation process because they help both the legal department and outside counsel clarify the cost and the value of the work. ACC Resources: Budget Sample Case Budget Template How to Improve Collaborative Budgeting How to Prepare a Litigation Plan and Budget ACC Resources: Project Plan Outside Counsel Management: Project Management for Successful Value-Based Relationships ACC Resources: Value-Based Fees ACC Guide to Value-Based Fees ACC thanks Nancy Jessen and Bret Baccus of Huron Legal for their work on this ACC Value Challenge Resource. 11

12 Practice Tip Tools/Applications for Project Management Project management requires specific tools, but often existing law department tools can be utilized. The table below lists some of the necessary project management tools along with existing law department systems that can be used to develop them. Component Scope Task and Activities Resources Time Cost Communications PM Tools Project Charter Work Plan RACI Work Plan Work Plan Communication Plan Existing Law Department Systems Excel MS Project Excel MS Project Matter Mgmt/eBilling Law Firm Billing System Matter Mgmt/eBilling Law Firm Billing System ACC Resources: Tools Project Management Tools and Templates Avoid Litigation Surprises with Legal Project Management Software (ACC Docket, Vol. 25, No. 9, p. 36, Nov. 2007) 12 ACC thanks Nancy Jessen and Bret Baccus of Huron Legal for their work on this ACC Value Challenge Resource.

13 CONDUCT OF THE LEGAL MATTER SCOPE SCHEDULE PEOPLE BUDGET CONDUCT OF LEGAL MATTER REVIEW Now that the plan is in place it is time to conduct and manage the legal matter. Project Initiation: Setting Expectations Opening a matter in the matter management system, opening a project file, or filling out the requisite forms are not sufficient to truly initiate the project. There needs to be a formal project initiation so that all affected parties know that the project is off and running. It is a good idea to conduct a kick-off meeting at the project outset in order to clarify the expectations of all team members. The project charter should be reviewed and discussed with all team members so that they are fully aware of the project s goals and objectives. The team members should have a clear understanding of what is within and what is outside the project s scope. The meeting should be attended by each member of the team who is expected to have a role in the project. The meeting may also be attended by other stakeholders who may not be actively involved in executing the project but have an interest in its outcome. Lastly, the kick-off meeting should clearly articulate each member s role and responsibilities so that all parties understand what is to be done, by whom, and when, as well as the applicable budget. Manage the Team As the project proceeds, additional team meetings should be held on a periodic basis. The frequency of these meetings will depend on the length of the project and how fast it progresses. For projects with a relatively short deadline, these meetings may need to be daily. Other projects may call for weekly or monthly meetings. During these regular meetings, the project manager should assess, address, and communicate to the team the progress of the project in terms of task completion and variances in any of the relevant parameters. Practice Tip Project Management Review vs. Substantive Review Project management review of a matter should be conducted independent of substantive review, so that the project management issues do not become overshadowed. In a litigation matter, for example, substantive review might include reports on facts developed in discovery and the resulting updated evaluations of potential liability, potential damages, affirmative defenses, or other issues. Project management review, on the other hand, is a function of monitoring progress of the project against the plan. Project management review of the same litigation would include matters such as budget-to-actual reports; reports on timing progress toward each phase or task, such as reporting on successful uploads of various databases and the percent of data review that is complete. ACC thanks Nancy Jessen and Bret Baccus of Huron Legal for their work on this ACC Value Challenge Resource. 13

14 Reporting and Management The project plan and budget are the primary tools/reports that the project manager can use to manage the project. The project plan is the key to effective management of the project. The project plan identifies the scope of the project, broken into phases and tasks; the timing for each task; and the lead responsible party. It may also include the budget, although the budget may be a separate document. The project plan is a living document it is updated regularly to show the percent of the project that is complete. While the project plan illustrates progress of the tasks in terms of timing and percent complete, budget reports demonstrate the use of financial resources. Periodic budget-to-variance reports will allow the project manager to make sure that spending is on track. It is important to use accrual accounting methods for these reports to avoid any unnecessary surprises down the road. Project status reports are an excellent tool to provide a snapshot of progress on the project as reflected in the project plan and budget. A good status report is no more than a page in length and provides information such as tasks completed since last update; upcoming meetings and tasks; questions/ issues/risks; and timeline and budget updates. A sample status report is attached in the Appendix. Assess Risks and Take Action Every project has risks. It is important at the outset of the project and on an ongoing basis to project the potential risks. First, identify each risk and evaluate its probability of occurring and its impact on the project development if the risk were to occur, such as impacts on scheduling, costs, or people. What could go wrong with the project? What are the most significant dependencies? For example, key people could become unavailable, necessary data could be unavailable, or the other party could back out of part of the deal. For high probability and high impact risks, a preliminary mitigation plan should be developed to protect against those risks. Routinely monitor those risks and control them by taking the appropriate remedial action when necessary. Evaluating risks periodically throughout the project and taking action where necessary will keep the project on track and minimize extreme variances in the project s scope, cost, or schedule. Manage Quality Quality assurance must be built into the work plan, including internal review and QA review. The nature of quality review will depend on the nature of the project. For example, QA for a major transaction might include pricing review of the margin, finance review of the revenue recognition, and operations review of the delivery terms. A sometimes overlooked aspect of quality management is a post-project assessment, discussed more fully below in the section of this Guide discussing the final Review phase of project management. Manage Communications As discussed above, developing a communications plan is a key part of the planning process for the project. Part of administering the project includes making sure that communications are made according to the plan so that all stakeholder stay in the loop. As the project unfolds, it may be appropriate to amend the communications plan, for example to add to the audience, change the frequency of communications, or make other appropriate changes. 14 ACC thanks Nancy Jessen and Bret Baccus of Huron Legal for their work on this ACC Value Challenge Resource.

15 Refine Scope, Schedule, People, and Budget as Needed As the project develops, new information will become available. The new information may necessitate adjustments to the project plan. In some circumstances it may be appropriate to refine the scope, schedule, staffing, or budget. The project manager must evaluate the new information, the scale of the issue, and the pros and cons of adjusting the plan or budget, recognizing the interrelated impact of changing any of the major plan constraints (scope, schedule, people, and budget). When Are Adjustments Required? Adjustments to the plan are required when there is a significant change in the scope, schedule, or resources, or a significant budget variance. What counts as significant will vary depending on the project. Since a change in one of these basic components will likely necessitate a change in at least one of the others in order to maintain a balance, one way to address this issue is to try first to make adjustments within the individual component so that the net effect on that parameter will remain the same. For example, if the budget runs over on one task, perhaps that run-over can be compensated for with cost cuts in another. If one task takes too long to accomplish, the time to complete another may need to be shortened. If it appears unlikely that the project can be pulled back on track, the project manager must determine which adjustments are acceptable and which are not. In most projects, one or more of these basic constraints has a higher priority. When there s a hard deadline that must be met, such as a deal closing date, scheduling is of the highest priority. For projects that are less mission-critical, budget is likely to have a greater priority. Careful attention to the regular project plan progress reports and budget variance reports and regular communication with project team members will eliminate surprises and hopefully limit the need for significant changes. Adjustments should always be made with the agreement of key stakeholders. Adjustments to Scope The project scope may be adjusted for a variety of reasons. Occasionally, it may be broadened because of new requirements from the courts (for example, an order expanding the scope of discovery) or clients (evolving terms of a deal). It may be broadened because the initial evaluation of the true scope was incorrect. Depending on the nature of the project, the scope may be narrowed if the budget or timing is running significantly over plan. Changing the scope will require assessing the other aspects of the project timing, staffing, and cost. Adjustments to Schedule Schedule adjustments may be necessary for a variety of reasons. Adjustments to schedule may be required if preceding tasks or activities run over their expected time. If there is a hard deadline for the project completion, these adjustments may result in a compression of the allowed time for later tasks rather than an extension of the final project completion date. The schedule might need to be shortened if the situation changed, for example, if a party to a deal threatened to withdraw if the deal wasn t closed by an earlier date than that originally projected. This would require adjusting the schedule for the component tasks, and could require adjustments to staffing. The schedule might need to be adjusted if the project scope changed, or if staffing changed significantly. ACC thanks Nancy Jessen and Bret Baccus of Huron Legal for their work on this ACC Value Challenge Resource. 15

16 Adjustments to Staffing A variety of circumstances might necessitate project staffing adjustments. Some common reasons include change in the project scope, increase or compression of the project schedule, or incorrect assumptions about the level of effort required to do the necessary work. Budget Variances and Adjustments A budget is, by definition, living documents and likely wrong at the outset of any project because it is based on assumptions and predictions. As the project progresses, more information will become available enabling a more precise and accurate project plan. Often the most impacted component of the plan will be the budget. More accurate information about the scope, required tasks and available people may necessitate adjustments to the budget. Any noted budget variances should be discussed with the responsible team members with attention to the reasons for the variance, the likelihood of it continuing, and alternatives for getting back on track or, if appropriate, a budget adjustment. Budget variances should be analyzed in concert with progress on the project plan, as they may be symptomatic of an incomplete or overly optimistic plan. Communicating Adjustments to Project Team and Clients The key point about adjustments is that new information should be regularly examined to assess whether a change is within the scope of the project or whether it will affect the schedule, budget, or staffing. Adjusting the project plan or budget is only part of the story. It is important to communicate the adjustments and their ramifications to the project team and the clients. The team members must understand how any adjustments will affect their continued work on the project, and the client must understand how any adjustments will affect their business objectives. Depending on the nature of the adjustments, the client s approval may need to be sought in advance. Be sure to include communications regarding adjustments in the communication plan so that when adjustments happen, the entire team will be on board. Case Study: Discovery Example In a hypothetical e-discovery project, a budget to variance report might show the following when the project had reached the document review phase. In this hypothetical, the plan is essentially on target. The planning & administration, collections, and data intake phases are complete. While the collections phase came in a little over budget, the other two completed phases were under budget and the near complete phases are on target to come in at or under budget. If there were a significant variance relative to the percent complete, there might be cause for concern requiring either an adjustment to the budget for another phase or an adjustment to the overall budget. 16 ACC thanks Nancy Jessen and Bret Baccus of Huron Legal for their work on this ACC Value Challenge Resource.

17 Project Stage % Complete Budget Actual Variance Planning & Administration 100% $500 $450 $50 Collections 100% $800 $825 ($25) Data Intake 100% $600 $595 $5 Processing 96% $2,000 $1880 $200 Early Case Assessment 97% $5,000 $4,250 $750 Document Review 30% $10,000 $3,000 $7,000 Production 0% $15,000 $0 $15,000 Total $33,900 $11,000 $23,030 If, however, the status of the project changed for reasons such as identification of a new key custodian or new repository of potentially responsive documents with a higher than anticipated volume of data, or if the court ordered broader discovery, the scope would have changed. There might be cause for modification of the schedule and people aspects of the project plan and perhaps the budget as well. ACC thanks Nancy Jessen and Bret Baccus of Huron Legal for their work on this ACC Value Challenge Resource. 17

18 Practice Tip Change Management A new project management program may face resistance or pushback from the team. Consider using change management best practices as you roll out the new program to ensure it is accepted and integrated into your team s practices. A suggested change management framework and some tips for success follow. CHANGE MANAGEMENT FRAMEWORK Setting the Stage Establish a sense of urgency Form a powerful guiding coalition Deciding What to Do Develop the change vision and strategy Making it Happen Communicate the vision for understanding and buy-in Empower others to act on the vision Plan for and create shortterm wins Consolidate improvements and keep the momentum Making it Stick Institutionalize the new approach TIPS FOR SUCCESS 1. Clearly define why the change is needed 2. Establish clear success metrics for the project and incorporate them into individual s performance goals 3. Establish a project steering committee with leadership from affected areas 4. Identify an internal project leader 5. Supplement with an empowered core team 6. Raise awareness of who is part of the project team 7. Make the vision for change clear, desirable, and feasible -- have an elevator speech 1. Identify an important business driver and keep that message consistent throughout the project 2. Evaluate your organization s readiness for change and organizational culture 3. Acknowledge that there will be change and there will be resistance 1. Communicate early and often using multiple methods 2. When working with consultants and vendors, make them enablers of your project, not the owners 3. Encourage consistency in senior leadership behaviors to support the vision 4. Provide a mechanism for feedback/suggestions and the freedom to challenge the status quo 5. Plan checkpoints to stop and recognize progress 6. Make the celebrations public and reward contributors 7. Don t declare victory too soon 1. Make sure that senior management continues to walk the talk 2. Conduct a structured lessons learned session and be willing to discuss the good, bad, and the ugly of the change effort 3. Recalibrate success metrics once improvements have been made 18 ACC thanks Nancy Jessen and Bret Baccus of Huron Legal for their work on this ACC Value Challenge Resource.

19 REVIEW SCOPE SCHEDULE PEOPLE BUDGET CONDUCT OF LEGAL MATTER REVIEW The last phase of the project management process is the final review. Review Outcome with Client It is important to review the project outcome with the client. This review will (1) satisfy the client that you are aware of and addressing their needs; (2) allow the client the opportunity to provide feedback regarding the project; and (3) potentially educate the client regarding issues that will improve communication and expectations for future similar projects. Routinely reviewing project outcomes with clients is consistent with the expectations of in-house counsel discussed in the Business Case section of this Guide. Capture (and Communicate) Lessons Learned Every project yields information that will be useful for future project planning. The completed project provides information regarding the resources used and time required to complete the project, as well as its cost. There may be some activities or tasks that could be better done or performed in a different sequence. Conduct a wrap-up meeting of the team a post mortem on the project. At the wrap-up meeting, take a look at the following: What went well What was unexpected The accuracy of the original project plan (including estimates of schedule, people, and budget) Learnings for future projects Evaluation of outside counsel It can also be a good idea to take a look at the appropriateness of project management for the scope of the matter. If the timeframe or size of the project is not significant, it is possible to spend more time on planning than on the project itself; in this case, the lessons learned might result in a refinement of the law department guidelines regarding which matters should require formal project management. Record the lessons learned and submit these and key documents to a knowledge base. The summary of lessons learned should be communicated to the appropriate stakeholders the team members or others who will be managing and performing similar projects and, where appropriate, clients and management. ACC thanks Nancy Jessen and Bret Baccus of Huron Legal for their work on this ACC Value Challenge Resource. 19

20 Conclusion: Legal Project Management Best Practices Legal project management is a disciplined approach to legal work, resulting in improved use of resources and improved performance against budgets. Following are some suggested best practices to ensure that the law department s project management program is as effective as possible: Define criteria for when formal project management is expected to avoid just large ticket items being formally project managed Make project management an explicit process within the expected case management activities Conduct project management reviews independent from case strategy reviews Define the project management role instead of assuming someone will take it on Define project management as job expectation and include it in performance evaluations Tailor tools to specific practice/matter type needs, but make them flexible enough to be adapted and changed to meet the program s needs as requirements change or grow Provide training that encompasses initial guidance, hands-on work, as well as specific project and ongoing support. Use testing and refresher training to keep skills sharp Engaging in these practices will help the law department make project management an inherent part of the department culture. 20 ACC thanks Nancy Jessen and Bret Baccus of Huron Legal for their work on this ACC Value Challenge Resource.

21 APPENDIX ACC thanks Nancy Jessen and Bret Baccus of Huron Legal for their work on this ACC Value Challenge Resource. 21

22 Sample Project Charter Date: Overall Project Description: Executive Sponsor: Team Lead: Team Members: Goals: Benefits: Scope: Key Assumptions: Exclusions from Scope: Risks: Key Deliverables: Key Project Dates: 22 ACC thanks Nancy Jessen and Bret Baccus of Huron Legal for their work on this ACC Value Challenge Resource.

23 Frequency/Date Communication Communication Vehicle Recurring Weekly Bi-Weekly Monthly Quarterly Ad Hoc / As Needed Special Project Related TBD TBD Target Audience Sample Communication Plan Content Author Communicator Date Sent ACC thanks Nancy Jessen and Bret Baccus of Huron Legal for their work on this ACC Value Challenge Resource. 23

24 Sample Project Plan Task Name % Complete Start Date End Date Lead Resource Team Members [Phase] [Tasks] [Phase] [Tasks] [Phase] [Tasks] 24 ACC thanks Nancy Jessen and Bret Baccus of Huron Legal for their work on this ACC Value Challenge Resource.

25 T a s k s Sample RACI Diagram Roles and Responsibilities Task Description Person A Person B Person C Person D R A R A R R R A R R R A A C I I A I I R R A R R R A A I I I (R) Responsible (A) Accountable (C) Consulted ( I ) Informed ACC thanks Nancy Jessen and Bret Baccus of Huron Legal for their work on this ACC Value Challenge Resource. 25

26 Sample Budget Code [Phase] Internal Fees External Fees Expenses Total Assumptions [PHASE] SUBTOTAL Code [Phase] Internal Fees External Fees Expenses Total Assumptions [PHASE] SUBTOTAL [PHASE] SUBTOTAL PROJECT TOTAL 26 ACC thanks Nancy Jessen and Bret Baccus of Huron Legal for their work on this ACC Value Challenge Resource.

27 Sample Status Report [Name of Project] Status Report for Week Beginning [Date] Budget Summary Project Budget: $ Incurred through [date]:$ Estimated remaining: $ Tasks Completed Since Last Update Upcoming Tasks Questions / Issues / Risks Questions / Issues / Risks Resp. Mitigation / Update Project Timeline Update Status Activity Date Completed Target Date On Schedule Caution/Issue u Schedule Issue Completed 27