Innovations in practice: Training lawyers on pricing, project management and law firm economics

There is a clear correlation between the level of initial and ongoing training a lawyer receives and the level of client satisfaction that the firm ultimately enjoys.

Client expectations of outside counsel continue to evolve towards more than just obtaining excellent legal advice. Today’s clients probably expect efficiency, cost predictability, and regular communication from their outside attorneys. And just like developing a strong sense of entitlement, learning to meet these demands requires constant training and practice.

Law firms that develop a well-defined training program around these legal business topics will position their lawyers to be successful in developing and maintaining successful relationships with their clients. This training should be viewed as a journey with defined stages that begins the moment a new associate walks through the door and runs alongside and in concert with other training and development programs offered by the company.

Step 1: Junior Associates

Lawyers starting out in their careers are sponges ready to soak up all the information that comes their way. There are few preconceptions to overcome and this is a rare opportunity to shape mindsets from the start. This is the stage of lawyer development where the ground is most fertile, but many law firms choose to focus their junior training program almost exclusively on imparting substantive legal skills.

As new lawyers begin their careers, firms should provide a solid foundation through a law firm economics course that covers basic business and financial concepts and begins to introduce the client’s perspective on value. This should be followed by a Legal Pricing & Project Management 101 course that teaches basic concepts around scope, budgeting, pricing models (including alternative fee arrangements) and communication.

Additionally, exposing junior associates to some basic project management tasks in the field will help crystallize some of the concepts covered in the basic training sessions. An easy way to provide this experience is to have junior associates provide basic assistance in developing budgets and project plans. This exercise forces them to wrestle with the interconnectedness of staffing, scope, and budgeting. This first exposure often leads to an “Aha!” when a junior associate realizes that pricing and budgeting for legal work involves more than just picking a number.

2nd step : Mid-Level Associates

For mid-level associates, continued development requires moving from introductory courses to more on-the-job training. It’s important for companies to create a culture where associates are encouraged to play a meaningful role in key pricing and project management tasks, such as developing and managing budgets.

Although the focus shifts to more Make for mid-level associates, formal education and training doesn’t have to stop. This is a great time to introduce more advanced courses on project management and pricing models. One of the best ways to bring these concepts to life is through a half-day budgeting and pricing workshop where associates work as a team and are given scenarios from which to develop a project scope, plan staffing and a budget.

Such workshops not only provide the opportunity to apply the concepts learned, but they help to build confidence, which greatly reduces the anxiety that often strikes when an associate is first asked by a partner to handle these tasks. .

Step 3: Senior employees

As Associates progress to the next level, they are expected to take on a more holistic role in pricing and project management, including some customer-facing responsibilities. This requires being able to understand client goals and expectations, while working collaboratively with clients to define scope, assumptions and staffing.

Customer panels are a great way to drive home the importance of collaboration throughout the pricing and project management lifecycle. Not only do these sessions allow associates to learn directly from customers in a safer and more relaxed setting, but these sessions also reinforce the importance customers place on budget management, efficiency and value. In short, they help dispel any last doubts a skeptical associate might have about whether “this stuff really matters.” As a bonus, clients generally welcome the opportunity to participate in these sessions and consider the firm’s investment in this type of training as an added value for their company.

In addition, people management — including delegation and staffing — takes on increasing importance at this stage of a lawyer’s development. A training session covering how to effectively delegate work, supervise associates and more junior paralegals, and spot inefficiencies early in a project is a good first step.

Equally important, management becomes an essential skill when taking on more advanced project management tasks. Associates should feel empowered to share their insights with partners in several key areas, including anticipating the effort required to complete tasks, the expected duration of a project, and basic assumptions and exclusions.

Step 4: New partners

The transition to associate brings a host of new responsibilities and expectations related to managing clients. For many lawyers, this is their first exposure to billing and collection processes. These topics alone deserve a dedicated training session that covers both the workings of the trade (invoicing deadlines, how to access and modify pre-invoices, end-of-year forecasts, collections, etc.) and the finer arts of managing time write-downs and discussing invoices with customers. The faculty for this training should include both the company’s billing team leader as well as one or more senior associates who can add examples and experiences around customer communication.

Additionally, new partners must learn more advanced profitability concepts in order to build a successful business portfolio. If the business is tracking profitability metrics, now is the perfect time for an in-depth training session covering the key drivers of business profitability. For most new partners, certain profitability factors, such as pricing and usage, will likely be familiar concepts; however, concepts such as leverage and realization may be less familiar and are important to cover in greater depth.

Finally, new partners need guidance on how to take a leadership role in pricing and service delivery. This includes learning how to interpret customer demands, create and sell value, negotiate pricing as needed, articulate and defend the value of company services, and manage change in scope and client refusals on fees. Many of these skills will develop over time with practice and experience, but giving new partners a solid foundation will shorten the learning curve. An advanced course on these topics that includes role play and small group exercises is an ideal way to both teach key concepts and give new partners the opportunity to try out these new skills and techniques.