Legal Management

How to Monitor Budgets in Legal Project Management?

If you wish to properly manage projects, you need to break down the project into tasks and sub-tasks, and assign a time volume and a budget to each of them. You then have to monitor the project by checking, in real time, that tasks are performed by the planned deadline, within the time volume and budget. If these limits are exceeded, the project manager must take action, by talking with the lawyer in charge (has she been wasting time? What happens?) or with the client (time to negotiate a change of project scope?).

But how do you actually know how much time has been allocated to which task or subtask? Many project managers in law firms find this hard to do. They have access to the timesheets of those working on the project, but how do they figure out whether "tel con with client re: project X" must be allocated to task a, b or c?

There is actually a very easy way to solve that problem. The entries in the timesheet must simply refer to the task. For example, if the project plan has defined certain tasks as task A.1.1.a, A.1.1.b, etc., the lawyer, when filling in her timesheet, should write "A.1.1.a_Tel con with client re:..." Even with simple software, this can be automated and the project manager can immediately see how much time has been billed on each task. It is really that simple: using the same task definitions in the project plan and in the timesheets.

This requires, of course, to make a real project plan, to identify tasks and subtasks, to allocate time and budget to them, to inform the lawyers about it, and enforce the discipline of using appropriate terminology in the timesheets. A small step for project management, but a big step for attorneys...

Antoine Henry de Frahan

Legal Writing Wrap up

Here is a list of all the posts on legal writing I have published so far in this blog:

Distinguishing Production and Communication

Writing Skills: a Table of Content

Don't Write. Talk!

Body Build Your Writing

How to Write in a Client-Centric Way

Antoine Henry de Frahan

Written Legal Advice: Distinguishing Production and Communication

A main reason why clients can't get from their lawyers the type of written advice they cherish (a concise one-pager) is that law firms produce memos to please the partners, not the clients. But there is a way to make both happy.

99% of clients value simple, concise, to-the-point, practical legal advice. They have little interest, or in most cases no interest at all, in the supporting legal analysis. When you ask lawyers what their clients want, they all seem to know this perfectly well: the client want a clear, concise and practical answer to his question. They know it, but they don't do it. Clients keep receiving long, legalistically-charged memos with detailed discussions of case law and endless footnotes. How come that law firms fail to produce what they know their clients are expecting?

Look at the production process in law firms. Legal advice is written by associates, then turned to a partner for review and signature. The partner wants to make a quality check, and rightly so. So, he needs to know how the associate has reached a particular conclusion, he wants to ensure that the associate has checked all relevant case law and legal articles, and has applied logic in the reasoning. He does not want to check the file, so all relevant facts must be presented at length in the memo. The associate must therefore spell out the entire background, analysis and reasoning in the memo. This is not useful for the client (the client is only interested in the practical conclusion), but associates feel they have to set out all the supporting sources and reasoning to pass the partners' quality check. And so, they keep producing memos that will make clients angry and resentful about legal fees.

The way to solve this is to distinguish the production process and the delivery process. Lawyers should not communicate the legal advice as they have produced it. The process of producing a memo requires legal analysis and reasoning, and a quality check of such analysis and reasoning is a must. So, lawyers must indeed put in writing their analysis and reasoning. But this has to do with the production side of the legal advice. The delivery side is a completely different issue. The question is: "Knowing that we have produced a legal advice based on a reliable analysis, what is the best way to present it to the client?" Most lawyers ignore this question, and simply forward the exhaustive  "production-stage memo" to the client. What the client receives is actually an internal memo that the law firm uses for its own purposes of quality check, and it makes clients turn red.

In practice, in addition to and on the basis of the memo that reflects the production of the legal advice, lawyers should prepare a separate "communication memo" that provides to the client exactly what he wants to know, in a manner as concise and to-the-point as possible. 

Antoine Henry de Frahan

Writing Skills: a Table of Contents

I am playing with the idea of writing a book about writing skills for lawyers. This is the table of contents I could use. If anyone as suggestions to improve it, be my guest!

1. ABOUT WRITTEN COMMUNICATION

• Why is writing very important?
• Why is writing no so important?
• What is the definition of excellence in writing?
• What do 99% of clients expect from written advice?
• When to use writing vs. other communication channels?
• How to integrate writing in a global communication to client?

2. CREATING VALUE THROUGH WRITING

• What is the #1 condition to create client value in documents?
• What is the biggest mistake of lawyers about the value of their documents? 
• What differentiates excellence criteria from basic requirements?
• Why do lawyers focus on the wrong excellence indicators? 
• What is the top criteria to assess whether a document is creating value?
• How to discover what sort of documents your client really want? 
• What does "solution-oriented" mean? 
• How to make documents more useful in practice? 

3. STRUCTURE

• Why must lawyers turn structure upside down?
• How to structure documents?
• How to structure paragraphs?
• Ho to create powerful headings and sub-headings?
• How to structure long documents?
• When and how to use executive summaries?

4. STYLE

4.1 Concision

• Why is concise writing essential?
• How to write in a short, concise way?
• How long should documents be?
• How long should paragraphs be?
• How long should sentences be?
• How to get rid of useless stuff?

4.2 Clarity

• How to increase clarity of ideas?
• How to increase clarity of language?
• How to increase clarity of layout?
• When and how to use tables, flow charts and graphs? 
• Why and how to avoid vague, ambiguous language?

4.3 Plain language

• Is writing in "plain language" a good idea?
• What is the story beyond "plain English"?
• How sophisticated should be your writing?

4.4 House style

• What should house style be about?
• How to move house style from wishful thinking to consistent performance?
• How to balance house style and personal style?

5. THE WRITING PROCESS

• How to get prepared for writing?
• How to produce a draft?
• How to do effective editing?
• How to check spelling and grammar?
• How to use readibility statistics?  

  

6. SPECIFIC WRITING 

• What are the top tips for writing emails?
• What are the the top tips for writing legal briefs?
• What are the top tips for writing newsletters?
• What are the top tips for writing articles?

  

7. META-WRITING

• Why does it take more than writing skills to produce outstanding documents?
• How to reconcile effective writing and protection of professional liability?
• How to combine shorter documents and higher fees?
• Why is effective writing a team performance?
• Why does it take change management to implement excellence in writing?
• How to use writing to create a distinctive, innovative and attractive identity for the firm?  

Antoine Henry de Frahan

The Ultimate Legal Writing Tip: Don't Write. Talk!

I am amazed by the number of legal memos and service proposals that could have been much shorter and far more effective if the writer had had a bit more of a preliminary conversation with the client.

Take the typical memo, where the attorney sets out all the options, all possible scenarios (if you are in situation A, then... and if you are in situation B, then...).  Question to the attorney: instead of spending hours investigating and writing about all possible legal consequences of client being in situation A, B, C or D, why didn’t you call the client and discuss with him in which of these situations he actually was? That would  have made your writing far more relevant, to-the-point, and shorter, and that’s exactly what clients are longing for.

I get many answers to that, from “From a professional liability viewpoint, you need to be extremely careful” (If you think that being to-the-point is too dangerous for you, maybe you should consider another career) to “I don’t want to trouble the client with an unsollicited phone call” (The truth is that clients are begging for their attorneys to be more proactive) to “I had a conversation but the client did not tell me his exact situation” (Did you ask?).

An answer I haven’t heard explicitly, and I sincerely hope that, indeed, it isn't playing a role, is that not asking about the specifics situation gives a justification to the attorney for writing a much longer memo and accordingly, invoicing a much higher fee.

Another answer I often get from associates, and that makes me despair of the legal profession, is “I agree with you, but I am not entitled to call the client. I have received this writing assignment from the partner, and he is the one with the client contact. I can only write the memo on the basis of the succinct info – and that is an overstatement - I have received from the partner.” I hear the voices saying, "Cut the middle man!"

Antoine Henry de Frahan

Linking Compliance and Legal Risk Management

Does compliance has anything to do with risk management?Do these two "à la mode" concepts interact in real-life legal practice? Here are some thoughts on the subject.

From a strategic viewpoint, compliance is about deciding in which areas your company has a vital interest in complying with applicable laws and regulations. This will of course be different for various business sectors, because areas of vital importance are not necessarily the same for companies in banking, pharma, food or air traffic. In itself, this is already a risk management exercise: "What would be the potential consequences of not complying" is a typical risk management question.

By the way, the idea of focusing compliance efforts on selected areas may seem dangerous, as if it suggested that in the non-vital areas, complying with laws and regulations does not matter. That's of course not the point. The point is that when you operate in a particular market, there are some areas where complying with existing rules is not just important, but of strategic, vital importance. These are the areas where failure to comply could have devastating consequences for the company. Of course, defining compliance priorities should not be understood as a "licence to kill" in all other areas. It just means that in a world where resources are limited, companies must choose priorities, and that works also for compliance.

So, assuming you have defined your compliance priority areas, what's the next step? Here comes risk management again. You need to engage in a risk management analysis, to figure out where are your main risks of non-compliance in this area. Of course, it is important to limit this exercise to the selected priority areas (engaging into a risk analysis of non-compliance with any and all applicable laws and regulations whatsoever would of course pure madness).

The purpose of the risk analysis is to identify the weak spots: the situations that are not too unlikely to happen and that would have a dramatic impact if fthey do. Once you have identified those weak spots, those "risks", you then have to find and carry out ways to mitigate them by reducing their likelihood or their impact if they materialise, or both.

There is of course much more to investigate about compliance and risk management, but that's it for this post: the only purpose was to highlight how compliance and risk management go hand in hand.

Antoine Henry de Frahan

Making Risk Management-Based Decisions

Although risk management sometimes sounds like a complex and fuzzy concept, in practice it comes down to a thinking and communicating in a structured, simple, and powerful way. Here is an interesting illustration of how to use practical tools - in this case, a very simple grid - chart - to make risk-management decisions. The video is about climate change, not about legal matters, but the same thinking process can be used to legal matters. Or not? What is your idea about such tools in legal matters?

Antoine Henry de Frahan

Kissing "Legal Risks" Goodbye

I promised in my earlier blog on risk management in the legal practice to explain why I believe that the concept of "legal risk" is meaningless and useless.

Important risks - who is interested in the petty ones? - are multidimensional. Major risks are not either legal, or financial, or strategic, or reputation, or whatever else. There are legal and financial and strategic and reputation. Isn't it arbitrary and futile to define them as "legal", "technical", "reputation", "strategic", or whatever else, when they are all of these simultaneously? It just depends from where you look at them. A lawyer will see a legal risk where the CFO will see a financial risk where the engineer will see a technical one. Risks are just risks. What is legal, financial, or strategic is the way you look at them. A risk is not per se legal (or anything else). Important risks are those that support a variety of perspectives.

For example, a EU antitrust investigation may look as a perfect illustration of a true "legal risk". Indeed, it is about legal rules, it involves lawyers, and it costs legal fees: it is definitely a legal thing. But it is also a strategic risk: it may delay or block a merger or force to sale of a business unit. And there is also a financial risk at stake: the penalty may amount to dozens of millions. See? What looks like a legal risk is actually a multidimensional one. On the contrary, what looks like the opposite of a legal risk may actually have a significant legal dimension: an engineering company builds a bridge. The collapse of the bridge is, a first sight, a technical risk: something that engineers should prevent and deal with if it happens. But lawyers will also be involved: to draft the contractual liability and force majeure provisions in the contract, to negotiate an insurance coverage and, as the case may be, to manage claims by the victims and against the subcontractors. So, the collapse of a bridge, however technical it may look, is pretty much of a legal risk as well.

This is why I don't find it very useful in practice to base a risk management policy on risk categories (legal, financial, strategic, etc.). Even if it satisfies the logical mind, it does not match real life. Everything is in everything, and "legal" cannot be isolated. Nothing of importance is all and only legal. A marriage (isn't that a risky venture?) is of course a legal thing (there is a contract), but it is also psychological, economic, social, just to name a few. It may be appropriate to talk about the legal aspects of marriage and the legal dimension of managing the risks inherent to a marriage, but calling marriage, or divorce, a "legal risk" simply does not mean anything.

The question that really matters is not whether a risk is legal or not, assuming you can produce a satisfying definition of "legal risk", which is a challenge in its own right. The real question is, in the presence of a major risk for the company, whatever its nature, "What can lawyers do about it"? Legal risk management should be understood as a shortcut for "lawyers' contribution to risk management". For sure, lawyers' contribution to managing risks will be more central in certain areas than in others. But again, what matters is not to define what is a legal risk, but to see what lawyers, with their specific skills and knowledge, can do to help managing the major risks of their organisation.

Working with categories (legal risk, financial risk) also induces the idea that lawyers should deal with legal risk, finance people with financial risk, etc. This is a dangerous idea. Assume a contract for a cross-Atlantic transaction, with a provision dealing with USD/Euro exchange rate risk. The contract is submitted to the lawyer. What should he do about the provision? He could say "Exchange rate is a financial risk, not a legal risk, so I am not reviewing this provision". Or "I am only going to check whether this provision is legally valid and enforceable under applicable law." Both approaches would be perfectly in line with the idea that there is such a thing as "legal risks" and "other risks", and that the lawyers’ responsibility is limited to the former. But is that enough? Wouldn't the client - and rightly so - prefer a lawyer able and willing to look carefully at the provision, check if it is not only legally valid but also properly designed and drafted, economically balanced, and technically sound? If the provision is legally OK (no law is violated) but nevertheless catastrophic for the company, should the lawyer just say, "this is a financial risk, not a legal one", and go on to the next page? Of course not. A good lawyer should be able not only to assess the legal dimension of an issue, but also to understand and be relevant in the other dimensions.

In a sales contract, force majeure can be seen as a meteorological risk. Does it mean that the lawyer should not deal with it? And if late payment is a financial risk, does it mean that the lawyer should abstain from commenting on the provisions dealing with it? Non-compliance with technical specifications will often be described as a technical or operational risk. Should therefore the lawyer be absent from discussions on this subject? What is 100% legal, actually? Choice of applicable law, details of the arbitration procedure, and the so-called final provisions stating strategically important matters - I am kidding - like annexes forming an integral part of the agreement? If a lawyer limits his focus to the strictly legal, he condemns himself to working on issues that are of not much significance, relevance or importance for anyone else in the company. Eventually, he will pale into insignificance within his organisation. Not exactly what you would expect from a modern in-house counsel determined to deal with strategically meaningful priorities!

So, the better lawyers are, the more they become familiar with and involved in dealing with risks that are not primarily branded as legal. Good lawyers have a deep understanding of financial tools, strategic options, business process, operations of the company, and the evolution of the business environment. So, what's the interest of categorising risks? The idea that lawyers should be dealing with legal risks, and that in a separate room the financial people should be dealing with financial risks, is nothing but an accurate definition of a highly dysfunctional, bureaucratic, and ineffective organisation.

Because important risks are multidimensional, managing them requires a multidisciplinary approach. Effective risk management demands a blend of competences. Important risks should not be managed by one specialist only, lawyer or other. People of different departments must talk to each other. Cross-teams must be formed. Lawyers who want to play a signifciant role in risk management must be able to understand the non-legal dimensions of the risks they are contributing to manage. How could a lawyer efficiently advise on the risks involved in the acquisition of a company if he has no idea about the strategy behind this acquisition, about the financing arrangements, and about the business of the target? Risk management requires a cross-functional approach, and as a lawyer you cannot stand out in a cross-team if you don't get what the financiers or the engineers are talking about. No need to be an expert in finance, strategy, marketing, operations and all the rest, but a solid culture générale in business is a must for effective risk management by lawyers.

Antoine Henry de Frahan

Six Questions on Risk Management in the Legal Practice

Legal risk management is THE big issue these days among in-house legal counsel. There is actually a lot of exciting questions on the subject. Here are some of them, with a short answer. (I will later present the detailed reasoning behind my answers) :

- What is a "legal risk"? Defining a "legal" risk is far trickier than it seems. After having spent hours on it, I realised that having a formal definition of legal risk is actually useless. I know this may be intriguing, and don't misunderstand me: I am convinced that the concept of risk management is of a huge value for legal practice, but I think that limiting lawyers to managing onlt "legal" risks - whatever that may mean, if anything at all - is a big mistake.

- Is the concept of risk management really adding some value to legal practice, or is it just a trendy name to call what lawyers have done for years ? Is there anything new to be learned here? My experience is that the methodology and tools of risk management really open new perspectives for the legal practitioner.

- Is risk management an important topic only for in-house lawyers? No! Lawyers in law firms should definitey be aware of what risk management is about. Clients increasingly expect their external advisors to assist them in managing (legal) risks. If, as an outside counsel, you have no clue as to what that really means, how can you be in the loop?

- As a methodology, how does risk management work? What are the models and tools? What do lawyers do differently when they adopt the risk management methodology? No time to get into the details here. But there is indeed a methodology, there are concepts, models, and tools, and they can (should) be learned.

- Is risk management the same as compliance? When once concept is heard, the other usually is not far behind. Although there may be related, these two concepts are well different.

- Is risk management all about reporting? Again, two different issues. Some reporting may be needed in the risk management process, but the risk management method and tools go far beyond reporting.

Antoine Henry de Frahan

Compliance (I): Where to Start?

Compliance as such does not mean much. To make the concept meaningful, it is critical t specify the context. What are we exactly talking about when we refer to compliance? Who should be complying with what?

If your compliance ambition is to set up a process to ensure that, at all levels in the company, people will comply with all applicable laws, regulations, strategic guidelines, codes of conduct, internal rules, corporate policies, management instructions (the list could go on for ever), I wish you the best of luck…

You’ve got to start somewhere. You’ve got to be very specific about it. You’ve got to define specific areas where you will focus your compliance efforts. An auditor cares about compliance of financial statements with generally accepted accounting principles. A security and safety officer cares about compliance of the premises with the directives of the fire department. As the head of compliance, what will you care about? This is where defining priorities comes into play. Compliance is all about priorities. The first task of any compliance program is to identify the areas where compliance is an absolute must. In what areas would a failure to comply have the worst consequences for the company? That’s the starting point of your compliance programs.

Assuming you know your compliance priorities, the next question is what do you want to do about them? I don’t think you can seriously respond “ensure compliance”. As an in-house lawyer, or chief legal officer, or compliance officer, your ability to ensure anything in the area of compliance is pretty limited. “I want everyone in the company to comply in all circumstances with every applicable internal or external rule” may sound like a very inspiring leadership stance, but not as a credible management goal. Of course, if compliance means filling a report, and you are in charge of the report, and you possess all the information needed, things are pretty much under control and you can indeed ensure compliance. But when compliance requires the cooperation of thousands of people who do not report to you and whom you sometimes not even know, your power to “ensure” anything is pretty limited… and your goal should be accordingly defined. Defining compliance priority areas, is important. But defining realistic goals for you to achieve in these areas is essential. Your compliance objectives should be within your power.

Antoine Henry de Frahan