Page 47 - 2019 - Leaders in Legal Business (q)
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should be pleased to build a relationship with you. If the problem resolves itself in these
conversations, fine. Undoubtedly you will show your gratitude and call that same consultant again
when the next topic comes around for which external input may be valuable.
Defining a scope: If these informal soundings are not sufficient, it is most effective to
develop a short brief and get input from your consulting firm of choice. If that consulting firm is
an expert in the subject matter, it will be able to assist you in shaping project parameters that help
you overcome your challenge or achieve your goal. As is true for any type of project, you then
agree on a scope and a fee basis for the work to be done if it’s a project (see above), or the terms
of a retainer or indeed a combination of the two along with a success fee, as appropriate.
Defining objectives and scope is critical, no matter how the consulting firm wishes to price
the work to ensure the law firm in the end gets the value it wants.
Consulting fees: Consulting firms often charge by the hour or the day. This is appropriate
for work where the scope cannot be defined easily or if there are too many “known unknowns” in
the work to be done. In most cases, any efforts-based pricing will put the interests of the consulting
firm squarely against the interests of the law firm; the consulting firm will want to maximize days
spent, and the law firm will want to minimize the time spent to save costs.
We posit that in many cases, a clearly defined scope and a fixed fee or retainer, sometimes
coupled with a success element as appropriate, often is fairest to both sides. This is because this
approach focuses on the challenge to be overcome or the goal to be achieved, not the inputs to get
there. This approach helps establish clarity at the outset, allows both sides to plan their cash flows,
and can avoid often tedious discussions about why our team needs to involve two or three team
members.
This approach does require for both sides to be willing to have early and candid discussions
about scope changes.
Competitive bids: It may be helpful to get input from several consulting firms and to select
the firm that provides the best approach combined with the best price. This approach works so
long as the challenge and goals are well defined. In our experience, we can achieve the best results
when the client remains open to changing its approach, both on how it wants to work with the
external firm and on its selection process. Rigidity often provides a result that falls short of what
the firm hopes to achieve. I remember vividly receiving a request for proposal (RFP) to advise a
firm on changing how partners are paid; I had to go as far as advising the managing partner that
his partners would likely depose him if he insisted on the methodology provided in the RFP. We
then could suggest an alternative approach that ended up not only saving the firm money but also
achieved a high-quality result.
Approach, methodology, technology: We distinguish between approach and
methodology that the consulting firm intends to apply to the work at hand; both are very important.
There is a big difference in approach and result among consulting firms that labor through
structured workshops, rely on a lot of data mining, or rely solely on the “grey hair” and experience
of its consultants. Each approach is appropriate sometimes, and likely a combination will help
achieve the desired outcomes.
The methodology that a consulting firm applies is equally important. This is because the
field of consulting does not have an easy reference point similar to codified law or generally
32
conversations, fine. Undoubtedly you will show your gratitude and call that same consultant again
when the next topic comes around for which external input may be valuable.
Defining a scope: If these informal soundings are not sufficient, it is most effective to
develop a short brief and get input from your consulting firm of choice. If that consulting firm is
an expert in the subject matter, it will be able to assist you in shaping project parameters that help
you overcome your challenge or achieve your goal. As is true for any type of project, you then
agree on a scope and a fee basis for the work to be done if it’s a project (see above), or the terms
of a retainer or indeed a combination of the two along with a success fee, as appropriate.
Defining objectives and scope is critical, no matter how the consulting firm wishes to price
the work to ensure the law firm in the end gets the value it wants.
Consulting fees: Consulting firms often charge by the hour or the day. This is appropriate
for work where the scope cannot be defined easily or if there are too many “known unknowns” in
the work to be done. In most cases, any efforts-based pricing will put the interests of the consulting
firm squarely against the interests of the law firm; the consulting firm will want to maximize days
spent, and the law firm will want to minimize the time spent to save costs.
We posit that in many cases, a clearly defined scope and a fixed fee or retainer, sometimes
coupled with a success element as appropriate, often is fairest to both sides. This is because this
approach focuses on the challenge to be overcome or the goal to be achieved, not the inputs to get
there. This approach helps establish clarity at the outset, allows both sides to plan their cash flows,
and can avoid often tedious discussions about why our team needs to involve two or three team
members.
This approach does require for both sides to be willing to have early and candid discussions
about scope changes.
Competitive bids: It may be helpful to get input from several consulting firms and to select
the firm that provides the best approach combined with the best price. This approach works so
long as the challenge and goals are well defined. In our experience, we can achieve the best results
when the client remains open to changing its approach, both on how it wants to work with the
external firm and on its selection process. Rigidity often provides a result that falls short of what
the firm hopes to achieve. I remember vividly receiving a request for proposal (RFP) to advise a
firm on changing how partners are paid; I had to go as far as advising the managing partner that
his partners would likely depose him if he insisted on the methodology provided in the RFP. We
then could suggest an alternative approach that ended up not only saving the firm money but also
achieved a high-quality result.
Approach, methodology, technology: We distinguish between approach and
methodology that the consulting firm intends to apply to the work at hand; both are very important.
There is a big difference in approach and result among consulting firms that labor through
structured workshops, rely on a lot of data mining, or rely solely on the “grey hair” and experience
of its consultants. Each approach is appropriate sometimes, and likely a combination will help
achieve the desired outcomes.
The methodology that a consulting firm applies is equally important. This is because the
field of consulting does not have an easy reference point similar to codified law or generally
32
