A recent survey of managing partners identified two trends that stand to make a significant and lasting impact on the legal profession. Firms are beginning to focus more on improved practice efficiency, as well as price competition.
Price estimation prior to engaging in a matter is critical for firms competing for work today; however, it is often difficult for a firm to accurately estimate the cost of a matter because of their unpredictable nature. The rise of alternative fee arrangements and pressure from clients to cut costs is leading to firms tracking their costs more efficiently and effectively than in the past.
Many firms are now tracking spending with UTBMS (the Uniform Task-Based Management System).
Fenwick & West has created a task force to develop a “rational process” for the use of new business models such as alternative fee arrangements, according to partner Mark Stevens, an executive committee member and chair of the firm’s pricing and business initiatives committee.
The Firm started with UTBMS codes, and then created an overlay of additional task codes where they found the UTBMS codes were not specific enough.
“We realized that we as a firm and as an industry will be pushed by clients to be much more sophisticated,” Stevens says. “Breaking up our work into discrete units and into functional descriptions is the only way we can do that. So now we know that a complaint is, historically, X number of dollars, and a Markman hearing is Y number of dollars. We have developed a very large data set of hundreds of matters, including but not limited to different types of litigation, initial public offerings and other securities offerings, venture financings, merger transactions, and transactional IP such as patent, trademark, and licensing.”
Stevens says this work “is never done” because “it’s not a project, but a shift in how we do business. This is integral to legal project management, integral to process improvement, and it drives efficiency at the firm.”
However, Stevens adds, although the process started with the UTBMS codes, “we began to see blank spots” that were not covered adequately by the codes. “So we added our own set of proprietary task-based codes that are standard within the firm.”
One example is the UTBMS category for “document review.” This can cover many types of work, from very basic paralegal work to highly sophisticated determinations about documents. The process, Stevens says, is so specific that each practice group at Fenwick & West uses its own proprietary task-based codes when needed.