A tale of two surveys: why project management maturity matters to law firms

I am sure most regular readers will have seen the legal press reports of this year’s survey of the top 100 law firms in the UK, by Price Waterhouse Cooper (PWC).  The survey results act as another alarm bell, sounding the need for change in the legal services industry.  I suspect that fewer readers will be familiar with another PWC survey report which can help law firms (and organisations in other sectors) implement change of all kinds more successfully.

The purpose of this post is to introduce readers to this other survey (which is focused on project management) and place it in context of key issues facing the legal services industry at the moment.

PWC Law Firms’ Survey 2013

The key findings of the survey are by now well-known, but to re-cap:

  • The top ten law firms in the UK, are continuing to pull away from firms lower down the top 100 table.
  • Generally, firms in all segments outside the top ten ‘have recorded another year of declining margins’ (my emphasis) and that ‘approximately one third of all firms outside the top ten reported UK profit margins of less than 20%’.
  • The situation facing many firms in the 11 – 25 bracket is of particular concern.  Their profit margins and overall financial performance mean that some of those firms are at real risk.  In comparison with other segments from the top 100, firms in the 11 – 25 segment they have performed poorly.

The survey report goes on to point out that:

The biggest global firms will no doubt continue to deliver high value, complex legal services at premium rates, with the significant remainder of the market competing to deliver legal services more efficiently and effectively than their rivals.

Law Firms’ Ability To Implement Change Successfully

The survey also notes that 60% of the top 10 firms and 33% of firms in the 11 – 100 bracket have invested in business process improvement projects of various kinds but ‘they do not achieve the scale of benefits that would be expected’.

So even those firms which realise they need to change and are taking steps to implement change, struggle to extract measurable business benefits from their change programme activities.  How can this situation be improved?

Project Management – A Means Of Implementing Change

The preface to the Association for Project Management’s (APM) Body of Knowledge, 6th edition, notes that project management provides ‘a professional approach to managing change, the universal challenge of the modern age.’

Few would disagree with this.  Whether change is required at a macro (organisational) or micro (individual legal matter) level, applying project management knowledge, techniques and experience greatly increases the chances of achieving successful outcomes.  But don’t just take my word for it.  PWC publish another annual survey which supports this argument.

PWC’s Third Global Survey on the State of Project Management

Key findings from this survey (which actually appeared in 2012, the current year’s survey is being complied) can be summarised as:

  • There is a direct correlation between greater project management maturity of organisations and successful project outcomes
  • Organisational project maturity, as reported from a very wide range of industry sectors (but with little data from law firms), is on the rise.
  • Adopting and applying established project management methodologies increases the likelihood of project success
  • Project management training among employees is increasing and more employees have formal project management qualifications when compared to previous surveys
  • Deploying key project staff who are engaged and experienced leads to project success
  • Organisations of all kinds still face challenges delivering projects on-time and within scope
  • Poor estimation in the planning phase continues to be the largest contributor towards project failure.

The PWC project maturity levels (1 -5) bear some resemblance to the levels of project delivery capability (PDC) I have discussed before. For ease of reference, PWC’s project maturity levels are summarised in the chart below.

PWC Survey Graphic

Summary of PWC’s Project Management Maturity (PMM) model.

 

The assessment factors used to determine the success or otherwise of projects were whether they were delivered: on-time, within budget, to scope, to quality standards and, most importantly of all, whether the projects achieved their intended business benefits.

The Legal Services Industry is Not Unique

The survey data from the state of project management survey is culled from respondents in 34 industries in 38 different countries.  The legal industry was represented as part of the catch-all ‘other’ industries, as there were too few respondents from the legal industry for this to be classed as a category of its own.

What struck me reading the project management report was that other industries (ranging from Consulting to Retail) are faced with similar fundamental issues affecting the legal services industry.  Indeed, the survey report’s executive summary says that:

Now, with increased scrutiny over budgets and ‘doing more with less,’ efficiency and effectiveness are key factors of successful organisations.

This sounds all too familiar to those of us involved in legal services.  Clearly, at a fairly high level of abstraction, the legal services industry faces challenges similar to those of other industries.  Essentially these can be boiled down to needing to implement change of various kinds to keep pace with market demand or, perhaps, wanting to change – to innovate – in order to anticipate market demand.

What Should Law Firms do to Implement Change Successfully?

Acknowledging the need for change is the easy part.  Implementing change successfully is much harder.  Whichever way it is looked at, some upfront investment is required.  There is no way around this.   To improve their chances of implementing change successfully law firms need to develop their overall project maturity / project delivery capability levels.

Hence law firms need to be investing in:

  • Formal project management training for staff
  • Continued coaching in project management for staff
  • Processes and procedures supporting project management including suitable IT support systems.

Perhaps the most important single driver behind improved project management maturity is the support of senior management.  Some law firms understand this.  I know of some firms where some very senior partners take an active interest in developing their organisation’s project delivery capability.  I suspect that at many other firms similar interest and commitment is lacking.

Personally I think it would be fascinating if the project delivery capability / project maturity of every firm in the top 100 list were assessed and tracked.  Thereafter one could look for any correlation between the firm’s success in the market-place and its ability to deliver all kinds of projects effectively (including legal services to clients).  If I were a betting man I’d put my money on those firms which treat the concept of project management maturity seriously, and take action to improve their maturity, to be the more successful.

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